You Can't Research the Future
Past data tells you nothing about which company's share price wins next.
Toby's central mental model: no amount of fundamental analysis on a company's past tells you what its share price will do next, because everything knowable about that company is already baked into the price by an army of analysts. The edge most retail stock-pickers think they have is an illusion — they are competing with teams of full-time professionals on Apple, Amazon, and the rest of the mega-caps.
The practical conclusion is humility: assume you cannot predict, and let the market itself decide weights via a low-cost passive index fund. This reframes the question from 'which stock will win?' to 'how do I own all of them cheaply?'
He applies it as a tattooed phrase that he returns to whenever a tempting individual stock thesis appears — including his own.
- Everything knowable about a public company is already in the price.
- Past performance reveals the company, not the future of the share price.
- If you can't out-research the analyst teams covering Apple, you don't have an edge.
- Humility is a portfolio strategy: own everything because you can't predict anything.
- The contrarian opportunities you spot are usually rationality, not insight.
- Name the assumption out loudBefore buying any individual stock, state the prediction you are implicitly making about the future. If you can't articulate what edge you have over the analyst teams covering it, that's your answer.Pro tipWrite the thesis in one sentence with a falsifiable price target and timeline.
- Default to a global index fundMake a low-cost, market-cap-weighted global index fund the base of the portfolio. This lets the market decide weights instead of you, and removes the need to predict country, sector, or company winners.Pro tipGlobal is the humility default; pick S&P 500 only if you have a strong reason to bet on US dominance for decades.
- Cap the speculative potIf you must scratch the stock-picking itch, ring-fence it. Toby keeps roughly 10% in individual stocks bought at the 2022 bottoms and refuses to add more — the rest of all new money goes to the index.Pro tipStop adding to your speculative bucket so it shrinks as a percentage over time as your index pot grows.WarningDon't rebalance into individual stocks during euphoria — that's exactly when the asymmetry is worst.
- Replace 'do the research' with 'own all of them'When tempted by a hot thesis (AI, EVs, crypto winner), recall that the internet was the 'future' in the dot-com era and most of those winners didn't survive. The way to bet on the future winner is to own the whole basket cheaply.
- Re-read the thesis on every dip and ripWhen markets feel racy, an individual stock will look attractive; when they crash, fear will tempt selling. Re-stating 'I can't research the future' is the circuit-breaker that keeps the index plan intact.Pro tipBookmark a one-page note with this principle and your asset-allocation targets, and re-read before any trade.
An experiment Toby read about pitted ordinary people picking stocks based on products they used (e.g. The Gap) against professional hedge fund managers running deep analysis over 5–10 years.
Until recently, the best-ever performing stock from IPO was Monster Energy — not Apple, Amazon, or any obvious tech name. Nvidia has just overtaken it.
Toby arrived at this after reading 40+ investing books and noticing that even classics like The Intelligent Investor would have steered you away from most of the last decade's biggest winners. The pattern across A Random Walk Down Wall Street, 100 Baggers, and the data on hedge funds versus monkey-with-darts experiments convinced him that publicly available research cannot reliably predict future share prices.
He also reconciled this with his own behaviour — he still owns individual stocks — by labelling himself an 'investing hypocrite' and capping individual picks at a small share of the portfolio.