Posts Tagged ‘Compounding’

Howard Marks’ Book: Chapter 19

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November 11, 2014

This concludes our series on portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 19 “The Most Important Thing Is…Adding Value” Trackrecord, Compounding, Capital Preservation “It means relatively little that a risk taker achieves a high return in a rising market, or that a conservative investors […]

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Elementary Worldly Wisdom – Part 2

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April 12, 2014

The following is Part 2 of portfolio management highlights extracted from a gem of a Munger speech given at USC 20 years ago in 1994. It’s long, but contains insights collected over many years by one of the world’s greatest investment minds. Caustically humorous, purely Munger, it is absolutely worth 20 minutes of your day […]

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Wisdom From James Montier

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February 1, 2014

I have a confession to make: I have a huge crush on James Montier. I think the feeling might be mutual (see picture below, from a signed copy of his book Value Investing: Tools and Techniques for Intelligent Investment.) Jokes aside, below are some fantastic bits from his recent essay titled “No Silver Bullets.”     […]

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Asymmetry Revisited

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November 22, 2013

Return asymmetry is a topic that emerges over and over again on PM Jar. It’s a topic that spans across investments strategies and philosophies (see the end of this article for links to previous PM Jar articles on return asymmetry). This is no coincidence – creating (positive) return asymmetry over time is the hallmark of […]

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Mauboussin on Position Sizing

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May 1, 2013

Below are excerpts from an article written by Michael Mauboussin in 2006 on the importance of position sizing (Size Matters). For fans of the Kelly formula, this is a must-read. Mauboussin highlights a few very important flaws of the Kelly formula when applied to our imperfect, non-normally distributed world of investing. Sizing, Diversification “To suppose […]

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Buffett Partnership Letters: 1968 & 1969

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March 20, 2013

During 1969, the Partnership transitioned into Berkshire Hathaway. Therefore this concludes our series on portfolio management and the Buffett Partnership Letters. Please see our previous articles in this series. Control, Hurdle Rate, Compounding, When To Sell “…controlled companies (which represent slightly over one-third of net assets at the beginning of the year)…we cannot make the same sort […]

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The Inner vs. Outer Scorecard

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February 21, 2013

We all have egos in the psychological sense – defined as “a person’s sense of self-esteem or self-importance.” It’s the degree that denotes the positive or negative association that’s often attached to the term “ego.” There are two passages below, one from Howard Marks and the other from Warren Buffett, that share a common denominator: […]

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Baupost Letters: 1997

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February 4, 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. Mandate, Trackrecord, Expected […]

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A Little Bit of History Repeating

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February 2, 2013

In 1977, Warren Buffett wrote an article for Fortune Magazine titled “How Inflation Swindles the Equity Investor.” In the article, Buffett outlines the parallels between equities and bonds, and the impact of interest rates & inflation movements on both asset classes. Given the interest rate and inflation debate raging today, I thought it worthwhile to […]

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An Interview with Bruce Berkowitz – Part 2

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January 26, 2013

Part 2 of portfolio management highlights extracted from an August 2010 WealthTrack interview with Consuelo Mack (in my opinion, WealthTrack really is an underrated treasure trove of investment wisdom). Be sure to check out Part 1. AUM, Compounding, Subscription, Redemptions “MACK: There’s a saying on Wall Street…that size is the enemy of performance… BERKOWITZ: …we think about […]

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The Math of Compounding

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January 16, 2013

Here is an interesting piece from Ted Lucas of Lattice Strategies (2010 Q4 The Oracle of…Risk Management) on the complementary relationship between compounding and capital preservation, plus a few other insightful topics of discussion. Compounding, Capital Preservation “Losses are linear, but the appreciation required to recover from losses scales exponentially as they deepen. Thought experiment: Imagine a […]

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Howard Marks’ Book: Chapter 7

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January 11, 2013

Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 7 “The Most Important Thing Is…Recognizing Risk” Risk, Capital Preservation, Compounding “…Warren Buffett, Peter Lynch, Bill Miller and Julian Robertson. In general their records are remarkable because of their decades of consistency and absence of disasters, […]

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Buffett Partnership Letters: 1965 Part 2

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January 10, 2013

Continuation of our series on portfolio management and the Buffett Partnership Letters, please see our previous articles for more details. Trackrecord, Compounding, Duration, Special Situations, Time Management “A disadvantage of this business is that it does not possess momentum to any significant degree. If General Motors accounts for 54% of domestic new car registrations in 1965, it […]

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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: 1963 Part 4

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September 12, 2012

Continuation in a series on portfolio management and the Buffett Partnership Letters, please see our previous articles for more details. Compounding, Capital Preservation “Since the whole subject of compounding has such as crass ring to it, I will attempt to introduce a little class into this discussion by turning to the art world. Francis I […]

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More from Ted Lucas

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September 5, 2012

In this piece, Ted Lucas of Lattice Strategies discusses the relationship between correlation and diversification, as well as the intricate task of building investment portfolios that remain resilient during market drawdowns, yet retain upside participation during bull markets. To explore some of his other writings, they are all archived on Lattice Strategies’ website. Risk, Capital Preservation, […]

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Compounding Outsourced

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July 11, 2012

“I’m a value investor, which says I want to buy 50-cent dollars, but given my firm’s predilection for serving the needs of taxable investors, I also want that dollar to tax-efficiently compound in value over long periods of time. That means the businesses must have great capacity to reinvest, which is not all that common…I […]

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