Three Sources of “Edge”

 Analytical edge
o Investment framework; smarts/IQ; experience; technical expertise (in a

 Psychological edge
o Willingness to bear pain and delay gratification; avoidance of (or ability to exploit) fear and greed; lack of interest in one’s popular perception; willingness and ability to go against the crowd when appropriate.

 Institutional edge
o Properly aligned incentives; optimal size and structure; ability to withstand pain; searching in the optimal places; having the right clients.

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