How To Gain an Analytical and Behavioral Edge in Investing

Stansberry Investor Hour

Stansberry Research

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4.4 • 677 Ratings

🗓️ 12 September 2022

⏱️ 78 minutes

🔗️ Recording | iTunes | RSS

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Summary

For this week's Investor Hour, we're proud to bring you Jim Osman, founder and chief vision officer of consulting group The Edge.

A 30-year veteran of the markets and portfolio management, Jim founded The Edge in 2005. Currently headquartered in New York City and his native country of England, the firm provides actionable (and market-beating) research to institutional and individual investors. In addition to overseeing The Edge, Jim regularly contributes to the hedge funds and private-equity division at Forbes. He has also written for other big names in financial publications like Barron's, the Wall Street Journal, and Bloomberg.

At The Edge, he helps his clients uncover profitable investing opportunities by helping them hone both an analytical and a behavioral edge in investing...

On the analytical side, he focuses on special situations, which he defines as "unusual or atypical" events that drive stock prices. These catalysts can be external or internal. Spinoffs, in particular, are a great source of value plays, and Jim shares how he invests in them on the show.

On the behavioral side, Jim highlights that emotional investing and fear of missing out can be costly. But he says that by understanding your risk, there's a way to manage your emotions...

[It's] not even [about] 'curb the emotion,' because we all are emotional creatures. It's whether you can recognize it... You can recognize your emotion and handle that. Then your actual thesis will play out.

In today's interview, Jim takes a deep dive into managing risk analytically and behaviorally... and why he considers it the ultimate solution to investment success.

Transcript

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0:00.0	Hello and welcome to the Stansberry Investor Hour. I'm your host, Dan Paris. I'm also the
0:13.2	editor of Extreme Value published by Stansberry Research. Today we'll talk with Jim Osmond. Jim
0:20.6	specializes in special situations investing. We'll talk all
0:24.4	about that and he's got some good ideas for you. In the mailbag today, actual questions about
0:30.3	financial statements. We hardly ever get those. It's awesome. And remember, you can call our listener
0:35.6	feedback line, 800-381-2357. Tell us what's on your mind and hear your voice on the show.
0:43.0	For my opening rant this week, it's impossible for some investors to avoid fraud and mega bubble valuations, but you are not one of them.
0:53.2	That and more right now on the Stansberry Investor Hour.
1:03.7	Yes, yes, it's impossible for some people to avoid frauds and megabubble valuations. Who are these people? Well, one group, I think,
1:14.6	is venture capital investors. And to say that it's impossible for them to avoid fraud is kind of,
1:22.3	it may be seen as controversial because they mostly have avoided it. They mostly do avoid fraud. It's unusual,
1:31.1	for example, that a Silicon Valley entrepreneur is convicted of fraud, but that happened this
1:36.4	year. It happened in January with Elizabeth Holmes. She was convicted on a few counts of fraud
1:42.0	and her ex-boyfriend partner, former C.O.
1:47.3	of her company, um, was convicted on 12 counts.
1:50.9	I think she was convicted on four and he was convicted on all 12 of his counts.
1:55.2	And she had 11 counts against her, but three of them, they couldn't make a decision and
1:59.7	they convicted her four of them,
2:01.3	and then she was found innocent of the rest. You may recall Elizabeth Holmes, she was the
2:07.8	somewhat attractive young woman with the sort of intense stare, unblinking stare, who wore black
2:15.8	turtlenecks like Steve Jobs and spoke in a very deep voice,
2:20.6	which turned out to be faked.
	...

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