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Should I Sell This Thing?

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January 8, 2013

Investors often obsess over the correct moments to purchase securities/assets, but discuss less frequently the circumstances and nuances of selling. A friend sent me this Wall Street Transcript interview with Christopher Mittleman awhile back. In the interview, Mittleman provides some very thoughtful insights, especially when to sell securities. A quick and worthwhile read. When To […]

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Buffett Partnership Letters: 1965 Part 1

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January 5, 2013

Continuation of our series on portfolio management and the Buffett Partnership Letters, please see our previous articles for more details. The 1965 letter is a treasure trove of insightful portfolio management commentary from Warren Buffett. This is the Buffett for purists – the bright, candid young investor, encountering intellectual dilemmas, thinking aloud about creative solutions, and putting […]

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Baupost Letters: 1996

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January 2, 2013

Continuation in our series on portfolio management and Seth Klarman, with ideas extracted from old Baupost Group letters. Our Readers know that we generally provide excerpts along with commentary for each topic. However, at the request of Baupost, we will not be providing any excerpts, only our interpretive summaries, for this series. Risk, Sizing, Diversification, […]

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Mauboussin on Portfolio Management

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December 27, 2012

Michael Mauboussin, author & former Chief Investment Strategist at Legg Mason, recently joined Consuelo Mack for an interview on WealthTrack (one of my favorite resources for interesting conversations with interesting people; the transcripts are economically priced at $4.99 per episode). Their conversation touched upon a number of relevant portfolio management topics. For those of you […]

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Howard Marks’ Book: Chapter 6 – Part 2

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December 24, 2012

Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 6 “The Most Important Thing Is…Recognizing Risk” Marks does a fantastic job illustrating the impact of the (low) risk free rate on portfolio expected risk & return, position selectivity, hurdle rate & opportunity cost. Expected Return, Hurdle […]

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Howard Marks’ Book: Chapter 6 – Part 1

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December 20, 2012

Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 6 “The Most Important Thing Is…Recognizing Risk” Risk, Intrinsic Value, Psychology “Risk means uncertainty about which outcome will occur and about the possibility of loss when the unfavorable ones do.” “It’s also ephemeral and unmeasurable. […]

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Stanley Druckenmiller Wisdom – Part 3

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December 19, 2012

Here is Part 3 of portfolio management highlights extracted from an interview with Stanley Druckenmmiller in Jack D. Schwager’s book The New Market Wizards. Be sure to check out the juicy bits from Part 1 and Part 2. Druckenmiller is a legendary investor, and protégé of George Soros, who compounded capital ~30% annualized since 1986 before announcing in 2010 […]

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Buffett Partnership Letters: 1964 Part 3

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December 17, 2012

Continuation of our series on portfolio management and the Buffett Partnership Letters, please see our previous articles for more details. Historical Performance Analysis, Process Over Outcome, Psychology “…the workouts (along with controls) saved the day in 1962, and if we had been light in this category that year, our final results would have been much poorer, although […]

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Stanley Druckenmiller Widsom – Part 2

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December 14, 2012

Here is Part 2 of portfolio management highlights extracted from an interview with Stanley Druckenmmiller in Jack D. Schwager’s book The New Market Wizards. Be sure to check out the juicy bits from Part 1. Druckenmiller is a legendary investor, and protégé of George Soros, who compounded capital ~30% annualized since 1986 before announcing in 2010 that […]

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Planting Seeds of Expected Return

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December 11, 2012

We have been reading (and thoroughly enjoying) the humorously insightful letters of Daruma Capital’s Mariko Gordon (who manages ~$2Bn in a small-cap concentrated strategy). In her Feb 2010 letter, Gordon muses upon the source of portfolio returns (and consequently future portfolio expected return). As we have written in the past, future portfolio returns do not […]

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Stanley Druckenmiller Wisdom – Part 1

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December 8, 2012

Druckenmiller is a legendary investor, and protégé of George Soros, who compounded capital ~30% annualized since 1986 before announcing in 2010 that his Duquesne fund would return all outside investor capital, and morph into a family office. Many of our Readers reside in the House of Value, but I believe that value investors can learn […]

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Buffett Partnership Letters: 1964 Part 2

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December 4, 2012

Continuation of our series on portfolio management and the Buffett Partnership Letters, please see our previous articles for more details. Cash “If a 20% or 30% drop in the market value of your equity holding (such as BPL) is going to produce emotional or financial distress, you should simply avoid common stock type investments. In the words […]

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Buffett Partnership Letters: 1964 Part 1

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December 1, 2012

Continuation of our series on portfolio management and the Buffett Partnership Letters, please see our previous articles for more details. Given the recent discussions/debates around taxes and potentially shifting tax rates, we thought it appropriate to share some historical Buffett wisdom on the topic. Tax “We do not play any games to either accelerated or […]

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Lisa Rapuano Interview Highlights – Part 3

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November 27, 2012

Part 3 of highlights from an insightful interview with Lisa Rapuano, who worked with Bill Miller for many years, and currently runs Lane Five Capital Management. Selectivity, Hurdle Rate, Opportunity Cost, Sizing “We do not own many stocks, and anything we buy has to improve the overall portfolio and/or be better than something else we already own…I’ll […]

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Howard Marks’ Book: Chapter 5 – Part 4

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November 24, 2012

I’m finally back from vacation. In light of recent market volatility and “risk,” let’s kick off with a continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 5 “The Most Important Thing Is…Understanding Risk” Risk, Intrinsic Value “…risk of loss does not necessarily stem […]

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More Baupost Wisdom

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November 2, 2012

Before my November vacation, I will leave you with a juicy Baupost piece compiled through various sources that shall remain confidential. Instead of the usual excerpts or quotes, below are summaries of ideas and concepts. Creativity, Making Mistakes False precision is dangerous. Klarman doesn’t believe that a computer can be programmed to invest the way […]

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Decluttering the Portfolio

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October 29, 2012

Many thanks to Lisa Rapuano for telling me about Daruma Capital’s Mariko Gordon, and her humorously insightful letters! This article will undoubtedly be the first of many based on interesting topics extracted from Gordon’s letters. In the August 2012 letter, Gordon discusses portfolio review and its parallels to a massive home cleaning project. For those of […]

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Don’t Try This At Home

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October 24, 2012

Last week, a friend and I were musing over whether we would ever put 100% of portfolio NAV into one security. While pondering this question, my mind recalled the following passage that Jeremy Grantham wrote in his 2010 2Q letter on global warming: “Skeptics argue that this wide range of uncertainty lowers the need to […]

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Lisa Rapuano Interview Highlights – Part 2

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October 18, 2012

Part 2 of highlights from an insightful interview with Lisa Rapuano, who worked with Bill Miller for many years, and currently runs Lane Five Capital Management. The interview touches upon a number of relevant portfolio management topics. Rapuano has obviously spent hours reflecting and contemplating these topics. A worthwhile read! Fee Structure “…I launched my fund [November […]

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Howard Marks’ Book: Chapter 5 – Part 3

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October 14, 2012

Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 5 “The Most Important Thing Is…Understanding Risk” No commentary necessary – self explanatory and eloquently written. Definition of Investing, Risk “Investing consists of exactly one thing: dealing with the future. And because none of us […]

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