VALUE: After Hours (S07 E20): Understanding Competitive Edge: Informational, Analytical, Behavioral

During their recent episode, Taylor, Carlisle, and John Huber discussed Understanding Competitive Edge: Informational, Analytical, Behavioral. Here’s an excerpt from the episode:

John: Yeah, the behavioral edge?

Tobias: Yeah. Just the different types of edges.

John: Yeah. Well, I think you can gain an edge in the stock market through knowing a piece of information that nobody else knows. That’s not inside information, obviously. We’re talking about just information on a small company that you uncover through your own research that no one else knows about. You know, Buffett used to live on that type of edge in the 1950s and 1960s, like a lot of other investors, not just him. But Walter Schloss and all these other guys, they could flip the pages of the Moody’s manual and uncover all these great deals.

I think a lot of that has gone away. But I have lately been trafficking in some of these smaller companies, and I actually have changed my mind that there are still a fair amount of informational edges. They’re not gaping holes. They’re not massive edges. But every once in a while, you just get to know a business better than most of the market participants. I’ve just noticed it through, just you can connect with people at the company. You can talk to employees. It’s just easier to really do, I guess, scuttlebutt type research that does give you an edge. So, I do believe that is still available.

Jake: Sometimes, have you been to annual meeting where they’re saying things that are pretty important and you know that there’s nobody really there listening for these smaller companies.

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