Vision: A Key to Investing Success

Investing requires vision, a clear-eyed view from myriad perspectives and across the full spectrum of markets and industries. The best investors have it, and the company leaders they invest in have it too.

It’s a synergy of success — highly focused investment pros scanning the horizon for the next winning company, led by an emerging business pioneer.

There are plenty of examples of this, spread across the pages of Barron’s, The Wall Street Journal, The Financial Times and trade magazines, or broadcast on Wall Street Week, Squawk Box, Varney & Co., and more. But sometimes the quickest way to discover the latest major investment triumph is to check the news from the hedge fund sector.

Major hedge funds are typically led by creative thinkers, bold investors who made their billions by rarely playing it safe. Many of these top investors have an intuitive sense of markets, key players and industries. They are not simply numbers people, obsessed with metrics and buried in spreadsheets. Based on proven track records, and often through trial and error, they have developed a feel for trends and opportunities, companies and people.

Moez Kassam of Anson Funds is one example that quickly comes to mind. The Chief Investment Officer of the Canadian hedge fund is known for taking a panoramic view of markets, considering such disparate variables as social trends, fads, sentiments and global pressures. Kassam closely eyes conventional wisdoms, and is seldom surprised when they evaporate.

Kassam told Bloomberg: “People have to understand stocks don’t really move on fundamentals in the short term, rather they move on the sentiment. A whole new class of investors has emerged, empowered by new technology platforms such as Robinhood and becoming significant drivers of the excitement in the market.”

The Anson Funds co-founder makes a point of staying plugged in to what thought leaders are talking about. He knows key leaders in fields ranging from academia to politics, and he regularly takes their temperature. He also explores opportunities from the ground level, taking the time to analyze corporate prospects, measure business valuations and study the fundamentals of each company before investing.

As a hedge fund manager, his analysis may convince him that the wisest investment is to take a short position, rather than expect company revenues and returns to grow. Sometimes this judgment is based on the track record of a company’s leadership, which might not be the right team to rally the business and achieve long-term success.

Prudent investing often comes down to investing in people, especially company leaders. The vision, judgment and acumen of CEOs and founders can drive a company forward toward greater success and prosperity, or backwards into a rut. The best leaders often exhibit common traits, such as creativity, curiosity, determination, flexibility, passion and self-confidence — as well as aspects of emotional intelligence, such as intuition, street smarts, and courage.

Of course, there is a place in any portfolio for legacy companies managed by play-it-safe executives. Today, many corporate boards choose individuals with legal, regulatory or financial expertise to fill top leadership roles. Such leaders may be highly competent, but if the focus is on regulations, rules and restraints, the business is not apt to generate an exciting product or service, or chart a new path. It may pay a dividend, but is unlikely to have an industry-transforming breakout moment.

For top investment firms, finding companies and leaders that will set the pace for an industry — or create a new one — is not just richly rewarding: It’s also part of the fun.