It was Einstein who said "Everything should be made as simple as possible, though not simpler" and it was Buffett who said "Investing is simple, but not easy"
I kind of feel that in the last few months I have come to better understand these comments, helped in part by some recent reading from Howard Marks who has set out that;
There are only 3 valid reasons to buy a share.
1) You believe that the price is low relative to current fundemantals and will correct.
2) You believe that the price is correct relative to current fundementals but that future opportunities have yet to be properly priced in and when these are realised the shares will be worth more.
3) You believe there is a bigger fool out there who will at some stage pay more.
(The counter to these also explains why you should sell).
I also recently heard a podcast in which Jeff Rummell explained that you only have 3 genuine advantages
1) Informational advantage. You know something that others do not and this lets you price a share better than the market in general
2) Analysis advantage. You have no better information than others but you can analyse it in a better way than others that enables you to see a mispricing opportunity
3) Behavioural advantage. You have the same information and analysis as others but can react to it in a differenct way that enables you to attain a price advantage.
This I have coupled mentally with some research done by, I think it was, Fidelity Investments, that also relates to some of the work of Daniel Kahneman (The author of Thinking Fast and Slow. A brilliant book, but v hard to read);
In this they provided analysts with 5 or 20 or 40 pieces of information on a company and asked for a prediction on the future share price movement and the confidence level of the analyst. The information was relevant facts, such as ROCE, PNAV, PE etc. With the additional level of information the confidence level of the analysts increased markedly but the accuracy improved only very slightly. I take this as applying to the idea that if you can validate the key principals for your investing strategy the important thing is to make sure any investment passes these and not get to absorbed by the multitude of other metrics that you might look at. They can inform the decision but the core should decide.
So where do I think this leaves me;
Hopefully a little more focused on what actually matters rather than all the information available.
Hopefully a little more prepared to wait and do nothing when there is a lot of noise.
Hopefully a little happier with my portfolio and the decisions I am making.