Learning as an investment method

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Learning as an investment method

Palmerston Group Advisors’ market niche is based on watching and learning from some of the world’s greatest investors–and then using that knowledge for our clients’ benefit. This is our specialty and few other firms do it. Please contact Palmerston for an in-depth discussion of our approach.Consistently excellent investing truly is extraordinary. Consequently, investors with excellent long-term records are very few in number. Yet they do exist and many of these managers favor Margin of Safety or value investing methods. Their speeches and articles, as well as the disclosure statements of the funds they manage, constitute a valuable and continual flow of investment possibilities.

These ideas and insights can represent meaningful opportunities for protecting and building client wealth. That is why they receive careful attention in the investment research, planning, and wealth management that Palmerston Group Advisors does on behalf of its clients. The premise is that clients are well served when their advisors take notice of (and hopefully learn from) the best in the business. Please contact Palmerston for further information.

So while Palmerston’s approach to Margin of Safety investing, Risk Management, and developing Financial Strategies is uniquely its own, we acknowledge the great lessons continually available from these formidable teachers.

Of course this could not be a market niche if everyone did it. As it happens, powerful incentives in the financial industry cause large numbers of professionals and firms to overlook it. What makes this a niche is that few other firms choose to follow this path–frequently because their incentive structures lead them elsewhere.

Stockbrokers and brokerage-based financial advisors often receive compensation from sales-loaded mutual funds and like products, or some “fee-based” combination of fees and commissions. Yet many of the best investment managers prefer no-load funds and refuse to pay commissions or so-called 12b1 fees because they believe they are unfair to their shareholders. Brokers find little incentive to market such offerings, preferring commissionable products. Hence many brokerage clients never hear about these exceptional managers and the funds they manage (let alone the individual stock positions).

Additionally, many financial planners also are adherents of asset allocation models based on efficient market theories (for more information, click on Risk Management). These planners believe market efficiency makes it virtually impossible for investors to outperform the market. Yet the great long-term investors who have outperformed the market over long stretches of time believe (and have demonstrated) that investment opportunities can arise from occasional market inefficiencies. Hence the ideological incentives of a belief system drive many planners away from evidence and opportunities that contradict their underlying system.

Where these embedded incentives cause many to ignore significant opportunities in this niche, Palmerston Group Advisors finds a sustainable, solid foundation on which to provide trusted long-term wealth management services to its clients. For more information, please contact Palmerston Group.