Posts Tagged ‘Luck’

The Sugar Cookie

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April 23, 2015

Many moons ago, we shared with you this matrix highlighting the importance of focusing on process over outcome.   In every investor’s lifetime, there will inevitably be one or more instances of “bad breaks” – when the investment process was solid, but the outcome was nonetheless bad. If that has ever happened to you, then […]

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Howard Marks’ Book: Chapter 17

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August 9, 2014

Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 17 “The Most Important Thing Is…Investing Defensively” — a rather apt topic given today’s market environment. Psychology, Capital Preservation, Expected Return, Risk, Opportunity Cost “What’s more important to you: scoring points or keeping your opponent […]

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Howard Marks’ Book: Chapter 16

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March 11, 2014

Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 16 “The Most Important Thing Is…Appreciating the Role of Luck.” Luck, Capital Preservation “We have to practice defensive investing, since many of the outcomes are likely to go against us. It’s more important to ensure […]

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Howard Marks’ Book: Chapter 14

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August 27, 2013

Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 14 “The Most Important Thing Is…Knowing What You Don’t Know” Mistakes, Sizing, Diversification, Leverage, Opportunity Cost “…the biggest problems tend to arise when investors forget about the difference between probability and outcome – that is, when […]

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Consequences of Contrarian Actions

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May 9, 2013

Below are excerpts from a speech Bob Rodriguez of First Pacific Advisors gave in May 2009. Quite a few interesting lessons derived from his previous trials and tribulations in dealing with clients and redemptions during periods of contrarian actions and underperformance. Psychology “I believe I have found success because I have been deeply aware of […]

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Mind of an Achiever

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April 20, 2013

In the competitive world of investing, each of us should constantly be seeking out competitive advantages. Personally, I believe that a certain degree of competitive advantage can be found in the cross-pollination of different schools of investment thought. Many in the value school often deride trading strategies, but they cannot deny the existence of those […]

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Montier & Mauboussin: Process Over Outcome

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April 16, 2013

James Montier’s Value Investing: Tools and Techniques for Intelligent Investment is a book I often recommend to others – Montier does a wonderful job of pulling together a range of topics related value investing. Below are excerpts from Chapter 16 titled “Process not Outcomes: Gambling, Sport and Investment.” Montier derived much of the content below […]

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Howard Marks’ Book: Chapter 10

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February 19, 2013

Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 10 “The Most Important Thing Is…Combating Negative Influences” Mistakes, Portfolio Management, Psychology “Why do mistakes occur? Because investing is an action undertaken by human beings, most of whom are at the mercy of their psyches and […]

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Munger Wisdom: 2013 Daily Journal Meeting

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February 9, 2013

Below are my personal notes (portfolio management highlights) from Charlie Munger’s Q&A Session during the 2013 Daily Journal Shareholders Meeting this Wednesday in Los Angeles. Opportunity Cost After the meeting, I approached Munger to ask him about his thoughts on opportunity cost (a topic that he mentioned numerous times while answering questions, and in previous […]

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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 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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