'The Wise-Man Problem' – Low-Hanging Fruit Individual Investors Overlook

Episode #317 | July 5, 2023

Episode #317 | July 5, 2023

'The Wise-Man Problem' – Low-Hanging Fruit Individual Investors Overlook

In This Episode

On this week's Stansberry Investor Hour, Dan and Corey are joined by equity analyst John Zolidis. He's the president and founder of Quo Vadis Capital, which provides research for both professional money managers and individual investors, specifically in the retail and restaurant sectors.

Dan and Corey kick off the podcast by discussing what they're bullish on – what they like, what they want to buy, and what they're buying. Corey explains that he's bullish on U.S. stocks, citing their recovery since last year's market bottom and the country's continued financial leadership in the global market. He believes that despite challenges, the U.S. remains the best investment option. He says, "We're still the best house in a bad neighborhood."

Meanwhile, Dan shares his optimism for the housing sector. He highlights the historically low inventory levels we're seeing right now, which he believes will continue to outweigh other market factors...

The all-time-low inventory could, has, and will keep overwhelming any other fundamentals... The homebuilders are a good bet.

Then, John joins the conversation to share his perspective on the possibility of beating the market and overcoming cognitive biases in investing. He brings up "the wise-man problem," referring to the cognitive bias that arises from an individual's belief that they have seen and understood all market situations based on past experiences.

John cautions against relying solely on historical patterns to predict future market trends. To overcome the biases created by our pattern-seeking brains, he advises investors to adopt a more objective approach... and to focus on the fundamentals of a business rather than being swayed by short-term stock-price movements.

Next, John challenges the notion that it's impossible to outperform the market. He explains that it can be done if you understand the companies you're investing in, focus on long-term prospects, and look for businesses that are relatively easy to comprehend. John uses his investment in Google's parent company, tech giant Alphabet, as an example of this approach...

Google is actually so entrenched in our daily lives that if Google were to stop operating... the whole place would have rigor mortis.

Finally, John shifts the conversation from beating the market in the short term to owning exceptional companies for an extended period. He emphasizes the importance of aligning investments with financial goals and avoiding short-term performance targets influenced by media hype. By adopting a patient and objective approach, investors can avoid pitfalls and achieve long-term objectives. John believes that a longer-term perspective is the key to gaining an edge as an individual investor. As he shares...

A longer-term perspective for an individual investor is the low-hanging fruit. That's the way to get an edge.