Buyers and Builders Annualized Returns of 35%, $115m AUM and 7 Investment Traits To Such Success By Mark Sellers
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May 6, 2024 A manager running $115M AUM and 35% annualized returns shares what makes rare, long-term winners. They discuss why elite returns are almost unheard of and why education or experience alone do not create durable edges. The conversation outlines four types of lasting corporate moats and seven hardwired psychological traits that enable investors to buy in panic, concentrate with conviction, and endure volatility.
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Only Four Durable Moats Protect Returns
- Durable competitive advantages (moats) are structural and rare, not temporary like technology or flashy marketing.
- Sellers lists four lasting moat types: scale, network effects, IP/customer goodwill, and high switching costs.
Education And Experience Are Necessary But Not Sufficient
- Common investor advantages like reading, degrees, and experience are admission tools, not true moats.
- Sellers argues these can be copied and mainly help you get into the game, not outperform for decades.
Buy In Panic And Sell In Euphoria
- Do cultivate the ability to buy during panic and sell during euphoria if you want exceptional returns.
- Sellers warns most managers couldn't buy in October 1987 or sell into the 1999 mania despite knowing valuations were extreme.