Excess Returns: Process Mistakes [Part I]

“Using a stop loss is like buying a house for $1 million and telling your broker to sell when he/she gets a bid for $800,000.” — Warren Buffett [buffett] In my book Excess Returns: A Comparative Study of the Methods of the World’s Greatest Investors, I describe in detail how dozens of very successful investors managed to beat the market by impressive margins over the past decades. The book explains the surprising similarities in the approach of these top stock pickers in all the steps of the investment process. In this and a second article, I briefly describe two common…