Investment Models

Do you have any heroes?

Dante’s final volume is filled with heroes of his faith. Because the Paradise is an allegory of the soul’s pilgrimage towards God, he describes heaven as filled with all kinds of good examples: theologians, jurists, rulers, philosophers, and so on. They advise Dante along the way.

Similarly, investors can gain wisdom from examining the lives and approaches of investors who have taken various approaches to their art: value investors, growth investors, quantitative managers, shareholder activists—there are many ways to approach your goal.

Investors are fortunate to have such well-documented models. Investing is a semi-public act. Large shareholders have to disclose their positions in public companies. And many institutional investors are looking for new business, so they aren’t shy about discussing their methods. Whether it’s Warren Buffett’s folksy wisdom, John Templeton’s commitment to international diversification, or Peter Lynch’s common-sense rules, it can be both entertaining and instructive to listen to what they have to say.

Whatever the approach, some common themes arise: passionate commitment, disciplined mathematical rigor, a cold-eyed view of individual holdings, and a realistic understanding of incentives—both their own, and of company management.

Dante’s final volume closes with a vision of heaven. Investors profit if they keep an eye on where they’re going, and take the advice of those who have gone before.

Douglas R. Tengdin, CFA

Chief Investment Officer

Leave a Reply

Your email address will not be published. Required fields are marked *