Why Fructivore

May 30, 2009

Why fructivore? Fructivore means fruit-eater,and when investing the wisest approach is to pick the low-hanging fruit. In other words, go for the easy money, the instruments that are on sale, and leave the rest on the table. Of course, that is the goal of any risk-averse investor, but a goal does not equate to a method. The method is to make sure that you get your money’s worth in an investment, which necessarily means getting more than your money’s worth because you are exposed to an uncertain future.

The future vexes and gives hope to all investors; many investors, properly called speculators, attempt to see into the future and get in on the ground floor of the next big thing, forgetting how small the last big thing usually wound up being. Quite simply, it is impossible to see into the future. It is less difficult, and at least possible, to see into all possible futures and have a plan for each one. Accordingly, it is wisest to insulate oneself from the future by the margin of safety that a value investor insists on. Many investors understand and embrace this view, and so many others say “No thanks, I’ll stick with the crystal ball approach.” At any rate, a mismatch between quoted price and underlying value is the goal.

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