Chris Mayer: "investors are better off focusing on knowable things"

[As investors,] I believe we’re better off focusing on “knowable things.” About 25 years ago, I read a thin book titled The Craft of Investing by John Train. There is a passage he wrote that I still remember. The pages of my copy are yellowing around the edges with age, but I found the passage that sticks in my mind and I want to share it with you here:

Investment, as distinct from speculation, is the craft of the specific. It is extraordinary how much time the public spends on the unknowable. Is the market going up or down? Is the economy recovering? What is the government going to do?

You should forget about the short term and not worry about the economy or the direction of the market. Instead, buy a share of a company the way you would buy a house: because you know all about it and want to own it for a long time at that price.

Train uses an analogy from military history. He says amateurs talk about grand strategy, but generals talk about supply lines and communication. In investing, the parallel is clear: wise investors focus on specifics – people, control, assets, how businesses are financed, priced, etc. Knowable things.

~ Chris Mayer, "Woodlock House Q4 Letter," January 7, 2020