In the book Good to Great, the author introduces the “Hedgehog Concept” He tells a story of a hedgehog and a fox. The fox is always looking for ways to attack the hedgehog. However, he fails everytime. Why? Because hedgehog is good at one thing, SELF DEFENSE. Everytime the fox attacks him, the hedgehog curls up into a ball of spikes.
But how is this related to Stable Investor’s purpose? This site is our attempt to put a principle into practice. But before we explain the principle, let’s go back to the hedgehog story for one last time. Hedgehogs are not very exciting, but are very CONSISTENT. Hedgehogs’ success can be attributed to their consistent focus on their only method of success (i.e. curling up). At Stable Investor, we love companies which are stable, solid, proven, dull, boring and dividend paying. These companies are in perfect alignment with our risk appetites. And we love to buy these companies when they are available at cheap prices. And this is the principlewe are talking about. We know that fox (Market) is always ready to bite and finish us off. But we want to be like hedgehogs. We know what we are good at. And we would stick with that, unless proven otherwise in long run [disclaimer] 😉 And for that, we are ready to sacrifice the quest to find the next multibagger.
So stay tuned in our (boring) journey of stable investing, (which is based on the principle that return OF capital is more important than return ON capital).