High Street Wealth

Where investment knowledge compounds.

[High Street Wealth @highstwealth]

People assume higher stakes demand more complexity. In investing, the opposite is true. The best portfolios are often the simplest ones.

[High Street Wealth @highstwealth]

The idea behind curiosity as an investing edge:

Most investors chase other investors. They see a position, copy it, and hope the thesis works out. When it doesn’t immediately, they panic and sell.

The problem: they didn’t earn the conviction. Someone else did.
Conviction built through your own curiosity — reading, thinking, asking why — sticks.

When the position moves against you, you know why you own it. You can separate noise from signal.

Copy a position from a newsletter and you own it for exactly as long as the newsletter author’s credibility holds. Your own curiosity-driven thesis? That survives volatility because you understand it.

Real investment results come from real conviction. Real conviction comes from curiosity, not imitation.

[High Street Wealth @highstwealth]

“financial firms are riddled with dysfunctional incentives”

[High Street Wealth @highstwealth]

From Sebastian Mallaby’s More Money Than God (2010) — on why the 2008 crisis wasn’t really about hedge funds:

The cataclysm has indeed shown that the financial system is broken, but it has not actually shown that hedge funds are the problem. It has demonstrated, to begin with, that central banks may have to steer economies in a new way: Rather than targeting consumer-price inflation and turning a blind eye to asset-price inflation, they must try to let the air out of bubbles—a lesson first suggested, incidentally, by the hedge-fund blowup of 1994. If the Fed had curbed leverage and raised interest rates in the mid 2000s, there would have been less craziness up and down the chain. American households would not have increased their borrowing from 66 percent of GDP in 1997 to 100 percent a decade later. Housing finance companies would not have sold so many mortgages regardless of borrowers’ ability to repay. Fannie Mae and Freddie Mac, the two government-chartered home lenders, would almost certainly not have collapsed into the arms of the government. Banks like Citigroup and broker-dealers like Merrill Lynch would not have gorged so greedily on mortgage-backed securities that ultimately went bad, squandering their capital. The Fed allowed this binge of borrowing because it was focused resolutely on consumer-price inflation, and because it believed it could ignore bubbles safely. The carnage of 2007–2009 demonstrated how wrong that was. Presented with an opportunity to borrow at near zero cost, people borrowed unsustainably.

[Boring_Business @BoringBiz_]

I think about this often

[High Street Wealth @highstwealth]

The idea behind reading like an investor:
News tells you what’s happening. Books tell you what it means.

Most people read only one. The investors who compound over decades read both — publications to stay current, books to stay wise.

Information ages in days. Frameworks age in decades.

Build a system that feeds you both, or accept that you’ll be permanently reactive.

[Finding Compounders @F_Compounders]

Charlie Munger on Focus

“I think people who multi- task pay a huge price”

[High Street Wealth @highstwealth]

The idea behind why concentration beats diversification for the few who can handle it:

Diversification protects you from your worst ideas. It also protects you from your best ones.

If you own forty positions, your top conviction can double and your portfolio barely notices. The trade-off is honest: concentration requires you to actually know what you own. Most investors don't, which is why diversification is the right answer for most of them.

But the great fortunes weren't built by spreading bets thin. They were built by people who studied one thing deeply, waited for the right price, and then refused to flinch when it moved.

Diversification is protection against ignorance.

Concentration is the reward for not being ignorant.

[High Street Wealth @highstwealth]

"In investing, what is comfortable is rarely profitable."

Robert Arnott

[Investment Wisdom @InvestingCanons]

Peter Lynch on the key skill for a "150-bagger":

[High Street Wealth @highstwealth]

The idea behind why most investors underperform the funds they own:

A fund returns 10% a year for a decade. The average investor in that same fund earns 4%.

The fund didn't change. The investors did.

They bought after good years and sold after bad ones.

They added when the story felt safe and pulled out
when it didn't.

The gap between a good investment and a good outcome isn't analysis. It's the willingness to do nothing while the position works.

[High Street Wealth @highstwealth]

"His edge wasn't forecasting. It was temperature reading."

Unknown

[High Street Wealth @highstwealth]

"The investor's chief enemy is likely to be the broker, the salesman, and his own emotions — usually in that order."

Philip Fisher

[High Street Wealth @highstwealth]

"An investor who has all the answers doesn't even understand the questions."

Sir John Templeton

[High Street Wealth @highstwealth]

The idea behind Klarman's obsession with the "absence of sellers":

Most investors look for reasons to buy. Klarman looks for reasons no one else can sell.

Forced selling — redemptions, margin calls, index rebalances, ratings downgrades, mandate restrictions — creates the best prices in markets.

Quality assets get dumped not because they're bad, but because the seller has to sell.

The opportunity isn't found in what's cheap. It's found in why it's cheap. When the reason is forced selling rather than broken fundamentals, that's the setup.

Margin of Safety — Seth Klarman (1991)

[High Street Wealth @highstwealth]

The idea behind Mauboussin's skill-luck continuum:

Every outcome sits somewhere between pure skill and pure luck.

Chess sits at the skill end. Roulette sits at the luck end. Investing sits closer to luck than most professionals admit.

Mauboussin's test for where an activity falls: can you lose on purpose?

In a skill game, yes. In a luck game, no.

The implication for investors: in a luck-heavy domain, short-term results don't reveal skill.

A bad process can win for a long time.

A good process can lose for a long time.

Which is why he argues you should judge an investor by their process, not their last twelve months

Source: The Success Equation — Michael Mauboussin (2012)

[High Street Wealth @highstwealth]

"I'm only rich because I know when I'm wrong."

— George Soros

[High Street Wealth @highstwealth]

The idea behind Munger's inversion:

Most investors ask how to get rich. Munger asked the opposite — how do people destroy wealth?

Overpaying.
Overtrading.
Using leverage you don't understand.
Chasing what just ran.
Selling what just dropped.
Sizing in positions you can't explain.

Avoid above and you've already beaten most investors.

The right answer is often just the absence of the wrong ones.

📖 Poor Charlie's Almanack (2005)

[High Street Wealth @highstwealth]

"The investor's chief problem — and even his worst enemy — is likely to be himself."

— Benjamin Graham