Since updating the Experience section of my LinkedIn profile I have received several requests along the lines of “can we work on investment ideas together?“, “can we share investment ideas?” and “would you like to be paid money for your investment ideas?” and each of these requests have been met with a polite (hopefully) but firm (necessary) “no thank you“.  Since I would like to discourage such requests in the future, I will share several reasons why I have the following policy:

With the exception of sharing educational papers written in connection with classes, I do not discuss or share information about the companies I research or invest in with anyone not directly involved in the private investment operations.

Reasons why I have the above policy…

1) I work best independently.  This means thinking about my own investment ideas and doing my own research, which has the added benefit of avoiding arguments, compromises and group think stemming from working with others.  I also believe investment by committee is likely to detract from investment performance for a number of reasons associated with human behavior and decision making.

There was a great rare interview with Anthony Deden last year that resonated with me…

I think part of looking at the press constantly and seeking what other people do, because people’s decisions are largely based on other people’s opinions, other people’s temperament, other people’s world view, and they seek to create an investment framework of their own based on ideas that come from others. And the way to find them is reading the press or watching CNBC, or whatever people do in the English-speaking world. If you stand back and say: “I’m really not interested in what anyone else does. I inherited this small fortune, and I want to deploy it in a manner that makes a great deal of sense. I’m going to sit down and figure out for myself what is the right thing to do“, then you are uninterested in what other people do because you don’t know their motivation.

Anthony Deden

A rare interview with Lou Simpson in 2017 also suggests this is the right thing to do…

If somebody’s going to invest using hot tips, or listening to CNBC, or investing with so-called wealth managers at brokerage firms, I think it’s a loser’s game for them.

Lou Simpson

2) Kenneth Jeffrey Marshall taught me about many behavioral aspects of investing including human cognitive biases that lead to misjudgment and misaction.  Not sharing ideas with others helps me avoid both “consensus” and “consistency” hazards. He devoted a chapter to misjudgment and misaction in his book Good Stock Cheap, which he was writing while I was his student.

3) Guy Spier’s book Education of a Value Investor taught me an extremely important lesson about influence and persuasion.  If you read my profile you will see I also have the following policy:

🚫 NOTE: As a rule, I do not buy (or analyze) anything that is being pitched or sold to me. 

The problem is that my brain (and most likely your brain too) is awful at making rational decisions when confronted with a well-argued, detailed pitch from a gifted salesperson. So I adopted a simple rule that has proved extraordinarily beneficial. When people call to pitch me anything at all, I reply in as pleasant a manner as possible, “I’m sorry. But I have a rule that I don’t allow myself to buy anything that’s being sold to me.”

Guy Spier

4) In performing equity analysis work for private investment operations, I have been entrusted with proprietary information and have a moral, ethical and legal obligation to keep certain information private and confidential.

The idea of keeping secrets in important endeavors is nothing new…

All that remains for me to add is, that you keep the whole matter as secret as possible. For upon secrecy, success depends in most enterprises of the kind…

General George Washington

5) Lastly, Warren Buffett’s Buffett Partnership Letters provides what I think should be the final word for any private investment professional who is doing independent investment work for themselves or others. 

Necessarily, the above little melodrama is a very abbreviated description of this investment operation. However, it does point up the necessity for secrecy regarding our portfolio operations

Warren Buffett

Alice Schroeder indicated Buffett operated with “obsessive secrecy” during the Buffett Partnership years in her book Snowball (Chapter 34 note 10).

Buffett… had insisted on total secrecy in his stock dealings when he ran his partnership, and was never once profiled in an interview.

Snowball (Chapter 33)