Snow and us have a mixed past. We loved it growing up, but our liking for it soured when we moved back here from grad school in the South—just in time for the 1991 Halloween blizzard. Lucky us. Overall we like winter, but the first storm irritates us because it is shock to our system. What else irritates us? Near the top of our list is when people ask us “do you have an edge on the stock?” when discussing a new idea.
We dislike that question since people in the investment community usually talk to the same analysts, read the same regulatory filings, go to the same conferences and often know each other in the financial community by name at least locally—how does one get an informational edge when there is that much intimacy with the companies we follow, especially with mid and large cap stocks? We think a better question is how does your investment thesis different than conventional wisdom and why?
Having said that, we think that the “edge” question is an occupational hazard we must live with daily. Therefore over the course of the next couple of weeks we’ll explore the topic if can one get an edge from both a large cap and small cap perspective and if is it relevant. What do you think? Can one get an edge on a particular stock/security?