The key to successful investing. Plus, why Fairfax Financial is poised for an extraordinary run

Famed Wall Street quantitative strategist Richard Bernstein has long believed that successful investing depends on gauging the supply and demand for capital. Investing where capital is scarce, where few others are allocating funds, allows an investor to demand better terms - attractive valuations or a higher dividend yield - which makes gains more likely. In his most recent research report for the asset management firm he founded, Mr. Bernstein argues that investment in the Magnificent Seven stocks is a recipe for capital destruction – allocating funds to where capital is abundant and unnecessary due to popularity. He finds it analogous…