During this weekend’s long run, I was reminded of a few nuggets of wisdom for individual investors when listening to a few episodes of a podcast titled “Capital Allocators.” Host Ted Seides, CFA is an experienced institutional asset manager whose career has focused on investing in hedge funds as a “fund of funds” portfolio manager. Perhaps most famous for his unfortunate bet against Warren Buffett, Seides began the Capital Allocators podcast in 2017 to “introduce (listeners) to leaders in the money game and explore how these holders of the keys to the kingdom allocate their time and their capital.” Seides’ conversations with professional institutional managers offer access to valuable insight, and the podcast has a high priority in my rotation.
Episode 17 presented Seides’ discussion with Adam Blitz, CEO/CIO of Evanston Capital Management (a fund of funds manager), in which Blitz shared his firm’s investment process. Most interesting was Blitz’s description of how Evanston analyzes managers. When evaluating hedge funds for potential investment, Blitz prefers to focus on a prospect’s investment process, not its specific ideas.
Private investors should think like Blitz when managing their portfolio. Focus on your investment process and do not fixate on specific investments. By creating and refining a particular investing approach, an investor is more likely to find success by avoiding mistakes and overcoming cognitive biases. Think of the old fishing proverb: give someone a fish, and they eat today; teach someone to fish, and he/she will eat for a lifetime. Focus on developing and perfecting a sustainable investment process. Your process may or may not involve an investment advisor; your process may require fifteen hours per week or an hour each month. Develop and refine your approach to investing, and you will catch fish enough for your lifetime.
Follow this link to view more of my favorite podcasts and resources.