Minority Report For Investors

Dear fellow investors,

“Investing is the only sphere of life where victory, security and success goes to the minority and never to the majority.” —John Maynard Keynes

[timeless]

In the movie, Minority Report, Tom Cruise plays a policeman in a world where crimes are predicted ahead of time. Cruise’s character gets accused of a future murder and he is forced to work incredibly hard to acquit himself of the anticipated crime.

Those of us who practice long-duration value investing disciplines must constantly examine securities pricing to determine where potential future investment “crimes” are being committed. There is a long history of momentum taking over in sectors or industries, and over-confidence often becomes attached to the momentum. In his book, John Neff On...