So, I’ve got to that time in any investors life where I have to make a fundamental decision. With ever increasing regularity, I get offered investment opportunities which compete with my existing portfolio. On the occasional times its happened before, I have declined the investment. However as time goes on, this causes my options to become more restricted.
For the first time, I find myself turning to the industry for advice. I normally enjoy the process of understanding and solving problems independently and without referring to existing doctrine. However, both options have serious advantages and disadvantages.
The general consensus, after some extensive research, is that most private investors avoid competing investments due to the conflict of interest. However many institutions will actively engage with competitors albeit through separate staff members to encourage internal and investment competition.
As I act as both an individual and institutional investor, my lines are blurred. If I stick with NOT investing in competing companies, I radically reduce the gene pool available to achieve success.
If I start investing in competing companies, then I could compromise either or both companies with a conflict of interest.
I haven’t made a decision yet, but until I work my way through the conundrum, I am going to avoid competing investments for now.