If you don’t recognize the name Will Danoff right away, don’t worry, you’re not alone. While he’s not as notorious as Warren Buffett, Peter Lynch, or John Templeton, Will Danoff is a legend in his own right. While he’s content flying under the radar and letting his numbers do the talking, there’s a lot to learn from his impressive investing career. 

Danoff manages Fidelity’s Contrafund and has for over thirty years. Under his direction, the fund has averaged a whopping 14.13% return (about 2% greater than the benchmark S&P 500 index).

Beating the market isn’t easy. Consistently outperforming the market is very hard. Eclipsing the market over decades is astonishing. Even more awe-inspiring is the fact that Mr. Danoff is the fund’s sole manager, while most large funds have entire teams that share responsibilities. 

As I continue sharpening my investing skills, I find it valuable to observe successful investors and clone ideas compatible with my philosophy, behavior, and goals. 

Here are six lessons I’ve learned from Will Danoff:

1. Be Flexible — investors sometimes box themselves in with overly strict requirements when choosing investments, but Mr. Danoff has remained flexible and open-minded during his long tenure at Fidelity. The lack of constraints allowed him to invest wherever he saw an opportunity. For example, the Contrafund was able to capitalize on the growth of technology stocks when others avoided them because their models concluded they were “too expensive.” On the fund’s freedom, he said, “we’re flexible, and we’ll go anywhere, so I really think that helps the fund. There aren’t many constraints on what we can do.”

2. Stocks Can Be “Expensive” For a Long Time — metrics like P/E ratios are helpful when analyzing which companies to invest in, but a company can remain expensive for many years. Danoff frequently uses Starbucks to demonstrate this point: “At the time that Starbucks went public, the company had a mere 140 stores in Seattle and Portland. At the time, it cost $250,000 to open a new store, and each new store would do $130,000 in cash flow in its second year, representing a tremendous return on capital…Meanwhile, same-store sales were growing double digits. Even though Starbucks looked expensive trading at 35x forward earnings, it was clearly a tremendous opportunity.” He concluded, “the company continued to grow and grow. It stayed expensive for like 15 years, but it was a great stock.”

3. Invest in “Best of Breed” Companies — “best of breed” is a phrase you’ll become familiar with if you listen to Danoff or read Fidelity’s Contrafund information. The idea is simple but easily overlooked. Find the best companies and invest in them, even if you have to pay a premium. Mr. Danoff described the concept by saying, “the best companies have a knack for anticipating problems and making smart moves ahead of the pack. I might have to pay a little more for these stocks, but, as my mother says, ‘The price is forgotten, the quality remains.’”

4. Play to Your Strengths — We all have characteristics that can help us maximize our returns. It’s essential to be aware of those traits and lean into, not away from them. One challenge is the tendency to overcomplicate things. If you have special skills or knowledge, figure out how to incorporate them into your strategy. Danoff, for example, is an expert at reading between the lines when meeting with executives: “I’m not sure if I have any magic left. But it’s competitive, and you have to play to your strengths, and like as I said, one of the advantages of Fidelity is the management teams are willing to talk to us and share some of the insights that they have…I’m in the business of asking good questions.”

5. You Haven’t Missed It — once a stock goes on an impressive run, it’s easy to feel that you’ve missed the opportunity. Mr. Danoff s a master of recognizing when it could be the beginning. When you look at the best-performing stocks, their appreciation often occurs over years or decades, so missing an early double or tripling isn’t all that bad. He often compares this to athletic competitions, saying, “just because a stock is up doesn’t mean you missed it. It’s like sports matches. Who cares what happened on the last point scored? You’re playing this point now. Do the work; continue to turn over rocks.”

6. Partner with the best — imagine having the chance to partner with the best leaders and brightest minds in the world. That’s the opportunity investing in public markets provides. “As investors, we have this great opportunity to partner with Elon Musk, Jeff Bezos, Mark Zuckerberg, Marc Benioff. I mean, these are truly exceptional people. And here we are, John Q. Public can be a partner by a share.” We’re fortunate to live when buying shares in great companies is easier than ever; in fact, we can do it with the push of a few buttons on our cell phones. But too few investors look at it this way, opting to over-complicate things and invest in companies they don’t understand, with sub-par leadership.

Will Danoff is an excellent example to investors of all experience levels. Incorporating the lessons, he’s demonstrated throughout his wildly successful tenure at Fidelity Contrafund can help anyone invest better. I do not doubt that Danoff’s legend will grow over time as his example becomes more recognized as a common-sense filled strategy to solid returns.

Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from James Vermillion, and all rights are reserved.