Portfolio

I think there are at least three viable paths to achieving above-average returns over a long period of time using what most would call "value investing" principles. I put "value investing" in quotation marks because, as Buffett pointed out in his 1992 letter to shareholders:

…we think the very term "value investing" is redundant. What is "investing" if it is not the act of seeking value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value - in the hope that it can soon be sold for a still-higher price - should be labeled speculation (which is neither illegal, immoral nor - in our view - financially fattening).

So, semantics aside, I see three viable yet distinct approaches to successful investing.

1. The Coffee Can approach
2. The Non-magic Formula approach
3. The Special Situations approach

I deploy all three. I think of this as an experiment. At the time of writing (January 2025), my objective is to manage three distinct portfolios and see which one over the next 3, 5, 10 year periods delivers above-average results.

Whether I can stick to this three-pronged approach will likely come down to my ability to keep things simple.

Time will tell.