Getting ahead isn't simply a matter of having a great idea, nor of being intelligent or improving your mastery in your chosen arena. The key is to focus on the edge that you can keep for the longer term. In this episode of Motley Fool Answers, Alison Southwick and Robert Brokamp are joined by former Fool Morgan Housel to talk about figuring out what your sustainable advantages are, both in investing and in life. He lays out five possible advantages that you and the businesses you invest in might already have, or want to cultivate, in service of acquiring an edge. The final tip: Think and act with your eye on the long term. Investment banks and high-speed trading computers are playing the short game, but individuals can still beat them on the deeper time horizon. Plus, the Fools talk about their own personal competitive edges.
A full transcript follows the video.
More From The Motley Fool
-
Why You're Smart to Buy Shopify Inc. (US) -- Despite Citron's Report
-
6 Years Later, 6 Charts That Show How Far Apple, Inc. Has Come Since Steve Jobs' Passing
This video was recorded on Aug. 22, 2017.
Alison Southwick: The last one is the willingness to wait longer than your competition.
Morgan Housel: I think this is especially true for individual investors, but it spans a lot of fields including business and just people's careers and whatnot. And to me it's the most tangible and the most realistic competitive edge that an individual investor can have. Because if you're an individual investor and you're trying to compete against the intelligence of Goldman Sachs or supercomputers, that's just not something I think you can realistically say. "I'm smarter than the analysts at Goldman Sachs are."
If you can say the analysts at Goldman Sachs are only willing to wait for six months and I'm willing to wait for five years, that's an edge. And I think it's really the only edge that exists for individual investors these days, where the parsing of information has been [so competitive] that it's hard for any individual investor, no matter who you are, to have an informational edge on anyone else.
But if you can have a time horizon edge and just be a little more patient than everyone, that is something that I think [will accrue] superior returns to you over time. Over a long period of time. Waiting longer might mean that you need to have a 10-year or a 20-year time horizon. If you can truly have that, then good things are almost certainly to come to you.