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Bill Ackman faced significant financial losses amounting to $1 billion from 2012 to 2018 due to his short position on a company he believed to be a pyramid scheme. Despite his belief, Ackman closed his short position just before the company's stock price significantly dropped in what was described as a 'death dive.' This situation highlights the market adage that 'the market can remain irrational longer than you can remain solvent.'
The main reason it's hard to be a long-term investor is because people get scared out of the market during the times they ought to be buying. The flip side of that is that too many folks tend to commit the biggest sums of money at the very worst times ➡️ https://t.co/Op8M96WSVk https://t.co/r3rpF5XP9a
Some investors believe “long time horizon” is an edge. A long time horizon investing does not guarantee you’ll outperform. In fact without a data/analytical or behavioural edge, one could lose a lot of money over that long time horizon. https://t.co/jGcrV8z0cZ
To outperform the market, you need an edge. What is in an edge? To me, there are only two main sources of edge: 1) analytical or data - how you use data, interpret/use differently than others 2) behavioural - managing emotions, working harder/smarter Know *your* edge.