How to outperform the market by François Rochon

Over the last 30 years, he returned more than 6.000% to shareholders (15.7% per year).

Have you heard of him? No, I thought not.

Here is his investment philosophy.

François Rochon is a quality investor. His investment philosophy is built on the following pillars:

• In the long run, stocks are the best asset class to put your money in
• Time in the market beats timing the market
• Only buy companies with a competitive advantage
• A lot of opportunities can be found in monopolistic and oligopolistic markets
• Focus on companies with high margins and high returns on capital
• Good long term prospects and a dedicated management team are crucial
• The stock market isn’t always efficient in the short term. Take advantage of it
• If you are right on the business, you’ll eventually be right about the stock

How can Rochon help you?

After many years of evidence, Rochon has performed well.  Most investors would be delighted. But sadly that’s rearview mirror investing.  As an investor, you need to identify the next Rochon or you need to decide if Rochon can keep doing what he has been doing for your investment term. That’s a hard question to answer.

If you look at his philosophy, anyone should be able to apply his ‘pillars’ of success, but why doesn’t every fund manager apply the same and get the same outcomes?

Could Rochon teach his skills to his replacement?  At some point, he will retire, so it makes sense to employ someone who can follow the process and learn directly under the wing of Rochon. That would be great for future investors.  Yet it’s strange that top managers have struggled to teach their craft to others. What does that tell you?

How do you spot the next Rochon?  In fact, with all the thousands of fund managers selling their services, the chances are you’ll never pick someone with the same potential.  And even if you did, you probably also picked other fund managers as well within your portfolio.  And if they are not the next Rochon, inevitably they will drag your portfolio return down.

There are other successful managers.

Ever heard of Bill Miller

“Bill Miller is one of the greatest investors of our generation.  He beat the S&P 500 for 15 straight years. And he returned 119% in 2019.  He’s the brain-child of Buffett, Graham, John B. Williams, and Munger.

Here are three of Miller’s most important investing lessons …click here

Can you spot another Rochon and Miller?  Can your wealth manager spot the next Rochon and Miller?

There will always be people who can outperform.   Yet spotting them in advance is almost impossilbe.

Perhaps its time to re-think how you invest and learn more about how to make better decisions.

Don’t give yourself bad luck by making the wrong choices based on marketing.

To find out more about Rochon and his views and tips, here’s a link to Compounding Quality.

To re-think your investments, call us.