The 400% Man

 Good case study.

Less Analyzing. More Investing - Createwealth8888

Read? The 400% Man

Rule-Breaker's Rules Money pros who know him say none of Allan Mecham's investing tactics are astonishingly difficult -- but for various reasons, most investors don't use them. Ignore the economy . Where is the economy going next quarter? Where is the S&P headed? Mecham says he ignores those issues; instead, he looks for stable, defensive businesses that can thrive whenever bad times come.  

Don't diversify . Most mutual funds own dozens or even hundreds of stocks (regulations usually require them to own at least 15). But to outperform with a big portfolio, a manager has to outsmart the market simultaneously on a raft of securities. Smaller funds and private-investment funds, which are not under the same requirements, can rely on just six or eight stocks.  

Don't sweat the spreadsheets . Many Wall Street analysts build elaborate financial analyses to calculate a company's earnings growth and other patterns. But some say it's more productive to use that time trying to understand a company and its industry -- the management, the competition, the customers and so on.  

Think decades, not quarters . Shareholders and managers tend to focus on companies' announcements of quarterly or annual earnings, and whether they beat or miss analysts' estimates. But some managers -- including one Warren Buffett -- say it's more useful to try to figure out where a company will be in a decade or more.  

Don't just do something. Stand there! One of the toughest things for investors to do is to sit still and do nothing -- especially when nervous clients demand that they respond to short-term fluctuations in the market. But most of the time, say a few contrarians, inactivity is the right longer-term move. It's about "keeping emotions from corroding the decision process," says Mecham.


Methods work. Mind doesn't - Createwealth8888