Best Investing: Turn Over Stones or Read Everything?

by: Larry MacDonald

Money manager Avner Mandelman says an investor needs to get out into the field and sleuth for physical facts (see April 26 blog post), but another money manager, Eric Sprott, is beating the market by voraciously reading mainstream and non-mainstream sources (as described in Boyd Erman’s excellent April 27 Globe and Mail article, ‘A bull in bear's clothing’). What to make of this?

Maybe one can outperform the market with just published information after all. Perhaps it’s like the students who get ‘A’ grades while the majority get lesser grades even though they all have access to the same material.

That is, people differ in their capacity and motivation to assimilate, analyze, and synthesize information. Not everyone was raised the same way. And not everyone is driven to start their days at 5 A.M. pouring over a wide array of written material, like Sprott does.

Some persons, likely those who enjoy the world of ideas more than the social, are more naturally inclined to such monkish work. Others, likely those who need more human contact and/or movement in their day, have to force themselves more. The latter might be better as sleuths. So either approach, sleuthing or voracious reading, could work depending on one’s natural propensities?