It is difficult to be different — especially when it comes to investments — but that is often the key to high performance.
The Big Short (starring Brad Pitt) looks like it will be a fun, entertaining film about the intricate role our investments – MBS – played in the housing bubble and financial crisis.
The story is told from the perspective of the investors who were willing to follow the facts, even when they went against conventional wisdom.
As institutional investors have become more educated about these investments, returns have fallen back towards normal. But MBS amortize, and thus get smaller every month. When they have become too small many institutions will sell them (often on the cheap), rather than carry thousands of ‘tiny’ investments.
Of course, a ‘tiny’ institutional investment may be perfectly sized for an individual. But only if you are willing to be different.