SEARCH STRATEGY by Bruce Greenblatt

Look intelligently for value opportunities. You must have search strategies. Every time you sell stock, someone else is buying that security. Vast majority—95%–is selling because the stock will go down versus buying because the stock is going up. You seek a seller that is motivated by psychological imperatives other than the underlying value. One person on one side of the trade is always wrong.

Trust me–that will be the case (with you) in big tech stocks that are covered by 100s of analysts. YOU have no advantage or edge. Where will I look for opportunities? Where I will be the smart one on the side of this trade? You
have to decide what type of investing you want to do in this realm. In every case, they pursue in concentrated fashion a particular niche strategy or specialty within the value area.

You have to know what you know and what you don’t know.

 Not all value is measurable
 Not all value is measurable by you.
 Where do I have the advantage?
 Where am I the smart money?

Great investors focus on specific opportunities in concentrated ways. They are very disciplined by staying within their circle of competence.
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