Ryan Batchelor over at Morningstar wrote an article yesterday titled, “Boost Your Investment Batting Average”. The article captured the essence of the “fat pitch” style of investing that I try to follow. I highly recommend you read it to get a better understanding of what fat pitch investing is all about.
Batchelor boils the “fat pitch” investment philosophy into 5 key parts, which I describe as follows:
- Seek companies with wide economic moats.
- Always maintain a margin of safety when investing.
- Cash is king. Holding cash is not a bad thing.
- Focused investing in a few stocks is not something to fear.
- Limit your trading costs and maintain a long term perspective.
Overall, I agree with Batchelor’s description of fat pitch investing. The only thing I was surprised about was that this article didn’t mention that the use of the phrase “fat pitch” to discuss investments came from a Warren Buffett quote