I’ve asked a lot of successful MF, PE & VC managers if they would be able to resist the temptation to time the market and hold on to profitable investments if they could easily exit & enter investments like retail investors. The answer is almost always “hmm… probably, not”.

The inability to time the market due to size constraints & illiquidity—especially in private markets forces fund managers to follow the fundamental investing rule—letting your winners run. This is one reason they outperform retail investors who always try to time the markets.

Like George Soros has said, “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”

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