Competitive Advantage and Annual Letter

The stock market is a zero-sum game and any potential investor will ask a fund manager, what’s your competitive advantage?  I have thought a lot about this, most of my thinking has been occupied with the thought that I don’t think I have one.  (My VP of marketing is on vacation, otherwise, that statement would have been worded differently).*

If I did have one, it would be that I thoroughly enjoy investing.  I find it intellectually challenging, competitive, often humorous, and it creates a generally enjoyable lifestyle.  This article about Buffett’s eating habits shows his competitive advantage is alive and well.  You can sense his enjoyment just by reading the article.  The last line is just classic Buffett:

Asked to explain the high-sugar, high-salt diet that has somehow enabled him to remain seemingly healthy, Buffett replies: “I checked the actuarial tables, and the lowest death rate is among six-year-olds. So I decided to eat like a six-year-old.” The octogenarian adds, “It’s the safest course I can take.”

Below is a link to the redacted version of my annual investment letter (publishing results on a public website creates headaches I would rather avoid).  I need to get it out before Buffett and Munger steal all the spotlight this weekend with their letters.


If you would like the complete version, please feel free to email me at







*For those of you who don’t know me as well, I do not have a VP of marketing.

More to Explore

Returns for Great vs. Bad Businesses

Munger and The Cattle Rancher

Munger’s ability to find great businesses is directly related to his ability to consistently discard bad businesses. He is excellent at inverting, and discarding the bad businesses as quickly as possible.

The Abominable No-Man and Bad Management

Some investors think a business is good, but know that management is bad.  These investors justify the investment based on the idea that the great price of the business is worth the bad management. This is akin to marrying a supermodel who is going to yell at you all day.  Whatever pleasure your eyes may derive from the marriage, your ears will endure a greater amount of pain in the long run. The pocketbooks of those partnering with bad management are likely to see a similar 50%+ decline in their net worth.

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