Posts Tagged ‘Psychology’

Edge Is Everything

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October 17, 2017

I have been meaning to read Ed Thorp’s new book A Man for All Markets. Short on time in recent weeks, I settled instead for a succinct interview with Thorp in Jack Schwager’s book Hedge Fund Market Wizards. Below are highlights in which Thorp shares his thoughts on position sizing and risk management. Key takeaways: (1) […]

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Michael Mauboussin – Part 4

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September 20, 2017

Below are excerpts (Part 4 of 4) from Thirty Years: Reflections on the Ten Attributes of Great Investors by Michael Mauboussin. Psychology, Intrinsic Value, Expected Return What riots & bubbles have in common: “…investing is an inherently social exercise…prices can go from being a source of information to a source of influence. Imagine 100 potential rioters milling […]

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Michael Mauboussin – Part 3

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August 31, 2017

Below are excerpts (Part 3 of 4) from Thirty Years: Reflections on the Ten Attributes of Great Investors by Michael Mauboussin. Portfolio Management, Sizing, Psychology “Position sizing and portfolio construction still do not get the attention they warrant.” Preach! “Puggy Pearson was a cigar-chomping gambling legend who won the World Series of Poker and was one […]

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Mauboussin on Investor Psychology – Part 2

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August 16, 2017

Below are excerpts (Part 2 of 4) from Thirty Years: Reflections on the Ten Attributes of Great Investors by Michael Mauboussin, which contains lots of insightful commentary on how behavioral psychology can greatly impact one’s likelihood of investment success. Creativity  “I believe…that diverse input combined with rigor can lead to insight. This is all very consistent […]

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Mauboussin on Investor Psychology – Part 1

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August 2, 2017

There seems to be a fair amount of behavioral investing tidbits originating from Columbia Business School affiliated sources these days. We previously posted excerpts from a Kingstown Capital interview (Columbia Business School alums) in which they discuss how they’ve woven behavioral psychology into their investment and team management process. Below are excerpts (Part 1 of […]

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Columbia Interview with Kingstown – Part 1

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July 3, 2017

Greetings! It has been a very long time since our last PM Jar article. In 2015-2016, a variety of opportunities emerged in the marketplace, and I was busy actively investing and implementing PM Jar concepts at Marram Investment Management. If you are curious about this implementation process and its outcome, here’s a link to Marram’s […]

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More Ray Dalio Wisdom

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May 23, 2016

Additional excerpts from Ray Dalio’s Principles. By presenting thoughts along similar veins by other investors, I do not wish to imply that Dalio’s thoughts are unoriginal. Instead, I am merely attempting to highlight psychological and behavioral commonalities between these investors. Random coincidence that these overlaps exist? Perhaps. But it’s much more fun to contemplate other contributing […]

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Soros’ Alchemy – Chapter 4

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March 30, 2016

Seth Klarman of Baupost wrote in a 1996 Letter that one should always be cognizant of whether seemingly different investments are actually the same bet in order to avoid risk of concentrated exposures. In other words, the task of risk management involves identifying (and if necessary, neutralizing) common risks underlying different portfolio holdings. One such […]

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BlueCrest’s Michael Platt

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December 19, 2015

Michael Platt and BlueCrest Capital have been in the headlines recently as the latest hedge fund billionaire to return external capital and morph into a private partnership / family office. Below are portfolio management tidbits from Platt’s interview with Jack Schwager in Hedge Fund Market Wizards. Capital Preservation, Risk, Team Management “I have no appetite […]

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Soros’ Alchemy – Chapter 1, Part 3

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November 20, 2015

Continuation in our series of portfolio management highlights from George Soros’ Alchemy of Finance – Chapter 1, Part 3: Soros introduces the theoretical foundations of reflexivity. Psychology, Intrinsic Value “What makes the participants’ understanding imperfect is that their thinking affects the situation to which it relates…Although there is no reality independent of the participants’ perception, there […]

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Soros’ Alchemy – Chapter 1, Part 2

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November 10, 2015

Continuation in our series of portfolio management highlights from George Soros’ Alchemy of Finance – Chapter 1, Part 2: Soros discusses the flaws of human psychology, how it complicates the task of investing in a marketplace of other thinking participants, why historical performance is not indicative of future results. He also explains why the term […]

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Soros’ Alchemy – Preface & Intro

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September 30, 2015

Dear Readers, apologies for the length of time since our last article. It’s been a busy year – got married, growing the business, grappling with a large position ruining otherwise healthy year-to-date performance – you know, all the usual life items. We have all experienced situations when the fundamentals of a business are moving in […]

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My New Crush: Stanley Druckenmiller

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July 1, 2015

I have a new (intellectual) crush: Stanley Druckenmiller. If you don’t share my feelings, you will after you read his Jan 2015 speech at the Lost Tree Club. Portfolio management related excerpts below: Diversification, Sizing “I think diversification and all the stuff they’re teaching at business school today is probably the most misguided concept…And if […]

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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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Mistakes of Boredom

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December 31, 2014

Flying back to Los Angeles after Christmas, somewhere over New Mexico, I rediscovered an article written by Ted Lucas of Lattice Strategies in 2011, quoting mathematician and logician Blaise Pascal’s Pensées on the psychological propensity of humans to seek out diversion and action, and the boredom caused by inaction: “Sometimes, when I set to thinking […]

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Howard Marks’ Book: Chapter 18

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October 7, 2014

Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 18 “The Most Important Thing Is…Avoiding Pitfalls” Risk, Volatility “…trying to avoid losses is more important than striving or great investment successes. The latter can be achieved some of the time, but the occasional failures […]

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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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Montier on Exposures & Bubbles

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July 12, 2014

Below are some wonderful bits on bubbles and portfolio construction from James Montier. Excerpts were extracted from a Feb 2014 interview with Montier by Robert Huebscher of Advisor Perspectives – a worthwhile read. Cash, Expected Returns, Exposure “The issue is…everything is expensive right now. How do you build a portfolio that recognizes the fact that cash […]

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Baupost Letters: 2000-2001

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July 1, 2014

This concludes 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 those of you wishing to […]

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Elementary Worldly Wisdom – Part 3

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April 18, 2014

The following is Part 3 of portfolio management highlighted extracted from a gem of a Munger speech given at USC nearly a decade ago. It’s long, but contains insights collected over many years by one of the greatest investment minds in this century. Caustically humorous (purely Munger), it is absolutely worth 20 minutes of your […]

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