You Lack the Focus to Be a “Great” Investor

Redefining what it means to be a great investor.

Ben Le Fort
4 min readJan 11, 2024

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Photo by Alexandre Boucher on Unsplash

Here’s a reality check that every investor needs to hear:

You’re not a ‘great’ investor and probably never will be.

That is if your definition of being a great investor is outperforming the stock market.

In this post, I explain how our limited attention causes investors who try to be great to lose time and money. I’ll explain a rational definition of what makes a ‘great investor.’

It’s simply not possible to stay on top of every stock

At the time I write this, there are about 58,000 companies listed on the various stock markets around the world.

Question: How can any individual investor possibly know enough about these companies to have any clue which ones are about to go to the moon and which will go bankrupt?

Answer: They can’t.

Question: So, how does an investor who picks individual stocks decide which companies to buy, which companies to sell, and when?

Answer: Whatever companies are grabbing headlines at the moment.

Research has shown that individual investors tend to trade stocks that are making headlines or are trending on social media. It doesn’t really matter if the stock is being hyped up or if it’s plummeting in price — as long as it’s being talked about, people will invest.

Trading “popular stocks” is an easy way to lose money

I will share a blurb from my book The Rational Investor that explains why trading attention-grabbing stocks results in terrible investment returns.

A 2021 research paper titled “Internet Search, Fund Flows, and Fund Performance” used Google search volume to measure investor attention to explore the connection between investment funds that were grabbing headlines and the future performance of those investments.

If an investment fund saw a spike in Google searches, the researchers wanted to know how much money poured into the funds after that spike in traffic and how the fund

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Ben Le Fort

I write about behavioral finance & evidence based investing. Want to work with me? e: info@benlefort.com Here's my Substack: https://benlefort.substack.com/