The Book ‘The Art of Execution’ is written by Lee Freeman-Shor who is a Manager running a fund which allocates capital to different investors with instructions to invest only in their best ideas.
As such, the author had the opportunity to examine 1,866 investments made by 45 of the leading investors of UK and the book is the outcome of this study.
Two interesting observations of this study:
1.Only 49% of the very best investment ideas made money
2. Some of these legendary investors were successful only 30% of the time
So how can a top investor make money if he is wrong most of the time?The answer lies in “execution, execution, execution”
As George Soros famously said “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much money you lose when you’re wrong.”
The key finding of the Book is that making lots of money or not losing pots of money comes down to the actions you take after you have invested in an idea and find yourself winning/losing.
The First Part of the Book deals with losing and the Second Part deals with winning.
One of my biggest grouses about investment literature is that not enough is written on selling. This Book does a great job of filling that gap.
The author does a fantastic job of walking through various thought processes when a stock price is going down and why people get “frozen” into their positions leading to permanent loss of capital.
The are lots of case studies from the UK stock market and that add lots of colour and practicality.
I would strongly recommend this Book to all investors.