How Your Investment Universe Might Be Shrinking
Why the more you know, the less you're willing to own...
"I miss being naïve about markets," a friend told me over coffee last week.
At first, I thought he was joking. Who misses knowing less?
But then I realised he was touching on something profound. Something that fundamentally changes how every serious investor evolves.
Here's the truth that nobody tells you when you start investing: The more you learn, the less you buy.
Think about that for a moment.
While most people are expanding their universe of investments, the best investors are constantly narrowing theirs. It sounds counterintuitive, doesn't it?
A Journey of Rising Standards
When you start investing, everything looks like an opportunity. A decent balance sheet here, a growing market there. Every business seems to have potential.
But knowledge has a funny way of changing your perspective.
You study great businesses and suddenly realise how rare they truly are. It happens gradually, then suddenly:
You learn how accounting can mask reality
You watch "unbreakable" market positions crumble
You see how industry structures determine long-term returns
You witness brilliant strategies fail in execution
Each lesson becomes a new filter, automatically screening out businesses that once seemed promising.
"The difference between a good investor and a great one lies less in what they know and more in what they're willing to pass on." - Howard Marks
This isn't about being perfectionist. It's about understanding what drives long-term value creation.
What remains is a much smaller universe. But it's a better one.
The Real Edge
This shrinking universe isn't a limitation. It's an advantage.
Why?
Because it keeps you from the cardinal sin of investing: putting capital into mediocre businesses just because they seem "good enough."
"The greatest challenge for investors is having the courage to walk away from opportunities that don't meet their standards." - Seth Klarman
The Path Forward
The solution isn't complicated, but it requires something rare: patience.
Keep learning, but use that knowledge to become more selective, not less.
Develop strong filters, and have the courage to use them.
The market rewards patience more than activity.
Bottom Line
If your circle of "investable" businesses is expanding rather than contracting, you might be learning the wrong lessons.
The goal isn't to find more opportunities.
It's to find better ones.
And sometimes, that means watching a hundred pitches go by while waiting for the perfect one.
Because in investing, unlike baseball, you don't have to swing.
As Warren Buffett observed: "The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot."
Until next week,
Dom
Founder & Chief Investment Officer
Schwar Capital
P.S. If these ideas resonated with you, share them with another thoughtful investor. The best ideas, like the best investments, compound when shared.
Disclaimer: The content provided in this newsletter is for informational purposes only and does not constitute financial, investment, or other professional advice. The opinions expressed here are those of the author and do not necessarily reflect the views of Schwar Capital. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. The author may or may not hold positions in the stocks or other financial instruments mentioned. Always do your own research or consult with a qualified financial advisor before making any investment decisions.
Great work - very insightful!