How does Chris Mayer beat the market?
From a recent email from James Altucher that was titled "How Does He Make So Much Money?":
Want to act like an insider?
Look at family-owned businesses.
Here’s why: A 2015 study by financial services group UBS showed that the stocks of companies with significant family ownership and influence performed much better than their peers.
There are many reasons why this is.
One is that family-owned businesses tend to be more profitable...
They are more watchful about expenses...
They also are more careful about the risks they take...
Chris told me that such out-performance applies not just to stocks owned by families but also to stocks where CEOs have “skin in the game.”
Most CEOs own small fractions of the companies they run. But there is a minority who voluntarily hold 5% or more of their firm’s shares.
The stakes of these “owner-CEOs” usually make up most of their personal wealth. Thus, they provide a strong incentive to increase value. No surprise that many studies show that CEO ownership has a strong impact on performance.
One such study showed out-performance ran from 4% to 10% annually.
So a simple strategy of only owning stocks that insiders themselves own is enough to beat the market by a large margin.