ELITISM PRINCIPLE

ELITISM PRINCIPLE

Few stocks or other investments live up to these principles rigorously applied.

Value investors treat companies as applicants to an exclusive club they run and wish to keep exclusive.

It is far safer to make the error of omission than to make the error of inclusion.

Those invited to join a value investor’s portfolio after applying this elitist exclusionary policy can be invited often, more of their stock bought as circumstances warrant.

It is far more important to diversify across asset classes – having a savings account, some bonds, real property, and stocks – than it is to diversify across stocks.

Also read: 10 TENETS OF VALUE INVESTING

1. MR. MARKET PRINCIPLE
2. BUSINESS ANALYST PRINCIPLE
3. REASONABLE PRICE PRINCIPLE
4. PATSY PRINCIPLE
5. CIRCLE OF COMPETENCE PRINCIPLE ****
6. MOAT PRINCIPLE
7. MARGIN OF SAFETY PRINCIPLE ****
8. IN-LAW PRINCIPLE
9. ELITISM PRINCIPLE
10. OWNER PRINCIPLE