How being different beats being smart

Check out the graph below. My portfolio (green line) is outperforming the OMX30* by 45 to 22 percent in the last year.  That is not a surprise.  This is the pattern I expect, based on my Analysis of thirty listed Corporations over ten years.

My portfolio (green) vs the OMX30 (yellow)

My portfolio (green) vs the OMX30 (yellow)

My strategy is the simplest one imaginable. I buy stock in Corporations where people are getting what they need to do a great job.  When that improves, the value of the stock improves as the result of people doing great stuff. It’s as if I sat in a bar every friday listening to the Groups of people coming in for an after work beer. Where people feel their Company is better than ever I buy. That would probably work, but I look at the data from engagement surveys instead. Wherever my “What I need to do a great job” index is growing, the stock will outperform stock in companies where this index is shrinking by 2,5 times.  Not the first year, but the second, when this higher level of “macro flow” at work has resulted in better Products, higher sales and other conventional numbers that analysts appreciate.Escalators

Now, I’m not looking at those conventional numbers. I find it useless because there are hundreds of thousands of very intelligent people out there buying stock based on them. These people have degrees from places like Harvard, Stanford and Yale and they have access to this information before I have it.  In the conventional game I would be a looser. Less intelligent, less knowledgable and slower to access this information my chances are those of an overweight, middle age man trying to win New York Marathon.   My opportunity is this: They have all read the same books at the same universities and they are making their calls based on the same traditional information from places like Bloombergs. The price of any stock is likely to reflect the value based on this information. That’s why I don’t need to look at any of that information. I buy stock ONLY on the basis of the engagement survey results.

Sometimes being different beats being smart:-)

Me and the financial analysts



*the OMX30 is the index based of the 30 main shares in the Nasdaq OMX Stockholm stock market.

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