More Thoughts on Investing from David E
Hultstrom
• Your clients cannot eat relative performance.• Aside from tax management, the wisdom of a trade has nothing to do with the cost basis.
• Don’t mistake a bull market for investment skill.
• As Keynes is reputed to have said, “The market can remain irrational longer than you can remain solvent.”
• People don’t have money problems, money has people problems
• Clients have no idea if you are competent. Thus they will extrapolate from things they can judge into areas where they can’t. For this reason (among others) it is important to do all the other little things right like returning calls, being punctual, having a respectable office, having communications be without grammar and spelling errors, etc.
• The investor’s return is the company’s cost of capital. If you expect a high return, you should ask why a company has to pay that much for capital.
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