Warren Buffett has often said that investors should only buy stocks that fall inside their circle of competence. That's easy enough to say, but many investors may find it hard to define their sphere of competence concretely.
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At its core, the circle of competence is all about investing in what you know. Peter Lynch proposed a similar strategy. Lynch believed that our greatest research tools were our eyes, ears and common sense. He found many of his great investment ideas while walking through the grocery store, or chatting with friends and family. He would buy...
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