Dec 1998
A similar [medley race] analysis applies to investing, where one’s long-term success depends on how well he or she navigates a number of different investment environments. For example, sometimes higher p/e ratio stocks do relatively better and sometimes lower p/e stocks outperform. Also, sometimes big company stocks perform better, and sometimes small company stocks have the advantage. While it would be nice to perform the best in all market environments, it’s essentially impossible to do so. Just as for Olympic athletes, the secret to success for investors is to build up a large lead in environments that are favorable to one’s (investment) style and to give up as little of that lead as possible in adverse environments.