The fourteenth century philosopher and Franciscan monk, William of Occam, created what today is referred to as the principle of simplicity. The principle is used in a broad spectrum of disciplines from theology to physics to economics. But nowhere is it so appropriate then when it is applied to the discipline of investing.

Two cultures exist in the world of investing, one of complexity and one of simplicity. The one of complexity is the one, which is embraced by Wall Street and pandered unabashedly to the public. It offers layers of computer generated charts and graphs, beautifully fabricated, but mostly unintelligible and completely useless for constructing an investment plan. It offers sales tools disguised as research and designed to generate revenues. It benefits the stockbroker, the investment banker, and the portfolio “consultant”. It enriches everyone except the investor.

We don’t forget the sound advice you may have heard from your parents, a teacher, or even a drill sergeant: keep it simple. That is the substance of “Occam’s Razor”, the common sense approach reasoned out 600 years ago by a monk, without a computer.

The real plan is protection and growth of your assets though management of risk. Recognition of risk is fundamental. Management of risk is essential. It does not require flip-flopping, trading velocity, or whiz-bang charts and graphs. It does require discipline and common sense. At VSM we believe markets are efficient, but not always rational. Sometimes to be bold, we don’t follow the crowd. Like Occam’s razor, we use Modern Portfolio Theory to cut through the incessant babble on Wall Street to arrive at the substance which will best benefit our clients.

Simply Stated:

Which philosophy should  an investor  choose?

Simplicity vs. Complexity?

Common Sense vs. Nonsense?