In Steve Drobny’s book The Invisible Hands, there’s a wonderfully insightful interview with Jim Leitner, who heads up Falcon Investment Management, and was previously a member of Yale Endowment’s Investment Committee. Leitner is an investor who has spent considerable time contemplating the science and art of investing, making money opportunistically across all asset classes, unconstrained, focused […]
A recent discussion led me to remember a WSJ article I read a few months ago on Bill Miller’s incredible trackrecord of beating the S&P 500 for 15 consecutive years. The author of the article pointed out the following: “Mr. Miller’s long spell of winning years was to some degree a quirk of calendars. Over […]
Many thanks to Jim Barksdale, the thoughtful Founder of Equity Investment Corporation in Atlanta, for sharing this Robert Frost poem with PM Jar. That’s right, Jim has effectively applied poetry to investing – bravo! A Drumlin Woodchuck – Robert Frost My own strategic retreat Is where two rocks almost meet, And still more secure and snug, […]
This post is a continuation in a series on portfolio management and the Buffett Partnership Letters. Please refer to the initial post in this series for more details. Selectivity, Hurdle Rate, Risk “The higher level of the market, the fewer the undervalued securities and I am finding some difficulty in securing an adequate number of attractive investments. I […]
This post is a continuation in a series on portfolio management and the Buffett Partnership Letters. Please refer to the initial post in this series for more details. Volatility “…widespread public belief in the inevitability of profits from invest in stocks will led to eventual trouble…prices, not intrinsic value in my opinion, of even undervalued securities can be […]
In his book The Big Short, Michael Lewis chronicles how Cornwall correctly predicted and benefited from the subprime housing crisis, via a “Fat Tail.” While reading the book, I remember thinking that the approach was different from many other funds that I’ve encountered. Some tidbits that particularly resonated were the following: Fat Tail ≠ Probability of […]
A few weeks ago, the WSJ featured an article titled “A Class Move for an Office” about Bank of America donating an office building in Wilmington, Delaware to a local charter school. “Wilmington’s central business district’s fourth-quarter office vacancy rate stood at 20%…The four-quarter national average was 17.3%. Bank of America weighted a number of […]
This post is a continuation in a series on portfolio management and the Buffett Partnership Letters. Please refer to the initial post in this series for more details. Cash, Special Situations “…if the market should go considerably higher our policy will be to reduce our general issues as profits present themselves and increase the work-out portfolio.” […]
I have often told people that the Buffett Partnership Letters is my favorite investment book. As a young investor (26 years old when he started in 1956), Buffett was nimble, opportunistic, and far more candid in his discussion of ideas and portfolio management techniques. The Partnership Letters and the early Berkshire letters are a treasure […]
Tail risk hedging (and hedging in general) has been a hot topic of discussion in recent years. With the market rally and the VIX back down to historically low levels (~15 as of this writing), I thought it appropriate to share a paper published by AQR Capital Management in the Summer 2011 (AQR Tail Risk […]
A Reader recently forwarded to me the marketing documents of an open-end investment fund based in London. The fund had an interesting incentive fee arrangement equal to 20% * (Value at Redemption – Value at Subscription), subject to an annual hurdle rate of XYZ Benchmark + 300 basis points. The incentive fee is deferred until the […]
PIMCO’s power brains often generate really interesting and unique analysis to common questions. The summary and thoughts below were derived from a recent presentation on asset allocation. Discount Rate Post US downgrade, and recent sovereign debt crisis, what are the implications for the actual figure of the risk-free rate? What about the equity risk premium? […]
The investment management industry has a nasty habit of ignoring the effect of taxes upon returns – mainly because the biggest and most important clients don’t care about pre- vs. after-tax returns (pensions, endowments, foundations, etc.) PM Jar does not agree with this common practice. As a result, our Readers will continue to find posts […]
Michael F. Price is going to kick off our inagural post. Well, sort of. I’d like to share the summary (mainly the categorized juicy portfolio management bits) of an interview with MFP in Peter J. Tanous’ book Investment Gurus. Sourcing, Creativity: Price discusses how competitive the traditional bankruptcy and restructuring game has become (this was 1997 […]