Friday, March 12, 2010

Robert Hagstrom: How to Beat the Market

I don't have much faith in market prognosticators. Years ago I did buy Hagstrom's book The Warren Buffett Way, and was quite taken with Hagstrom's analysis of each of Bufett's major investing decision.  The argument was compelling that a rational investor in control of their emotions could substantially beat the market by selecting a small number of companies with superior long-term business that possessed wide motes or barriers to entry.  However, this was much easier said than done.  I invested a nominal amount in the Legg Mason Focus Fund run by Hagstrom.  Don't try to track down this fund, because it doesn't exist anymore.  Beating the market is much more difficult in practice than theory.  Unless you are a budding Warren Buffett, you're probably better off practicing an asset allocation strategy across multiple asset classes than trying to pick a handful of winning stocks.

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