Fund managers are like zebras. Those in the middle (owning popular stocks) are safe from predators (getting fired), even if performance is mediocre. Those on the outside (owning unfamiliar stocks) find better grass (higher returns) but risk being the first ones eaten if an idea fails. This creates an institutional imperative to stay with the consensus.

Analysis of Keynes's portfolio reveals a subtle skill: his true value-add came from ensuring his lowest-conviction ideas received minimal capital. Over his career, his bottom five positions shrank from 11.7% to just 6% of his portfolio, demonstrating a disciplined approach to managing risk on less-certain bets.

Acknowledging he was susceptible to self-sabotage by trying to be overly clever, Keynes evolved a systematic process. By investing in fewer positions, holding them longer, and focusing on clear criteria, he deliberately reduced opportunities to act on his worst impulses, mirroring Buffett's "one-foot hurdle" approach.

The dominance of low-cost index funds means active managers cannot compete in liquid, efficient markets. Survival depends on creating strategies in areas Vanguard can't easily replicate, such as illiquid micro-caps, niche geographies, or complex sectors that require specialized data and analysis.

Capital Group values managers who maintain a consistent investment style (e.g., value or growth) and avoid "style creep," especially during skewed markets. Since the firm manages risk by combining managers with different styles, an individual changing their approach midstream creates an unintended, problematic portfolio imbalance.

Great investment ideas are often idiosyncratic and contrary to conventional wisdom. A committee structure, which inherently seeks consensus and avoids career risk, is structurally incapable of approving such unconventional bets. To achieve superior results, talented investors must be freed from bureaucratic constraints that favor conformity.

Due to their monopolistic and conservative nature, pension funds punish deviation from the peer group. Innovating is a career risk, as it requires justification for being different. Consequently, significant change rarely happens proactively; instead, it is forced upon these institutions by external market crises.

Professional fund managers are often constrained by the need to hug their benchmark index to avoid short-term underperformance and retain clients. Individuals, free from this 'career risk,' can make truly long-term, contrarian bets, which is a significant structural advantage for outperformance.

While limited partners in venture funds often claim to seek differentiated strategies, in reality, they prefer minor deviations from established models. They want the comfort of the familiar with a slight "alpha" twist, making it difficult for managers with genuinely unconventional approaches to raise institutional capital.