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 […]
Readers know that I’m a fan of Ted Lucas of Lattice Strategies. He recently wrote a piece (Applied Risk Strategy 1-21-13 – Humble Confidence and Creativity) discussing the impact of overconfidence on performance, as well as why a good risk management process should involve anticipating how assets behave in certain environments (in other words, predicting […]
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 […]
Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 9 “The Most Important Thing Is…Awareness of the Pendulum” Psychology, Risk, When To Buy, When To Sell As the title of this chapter gives away, much of Marks’ comments emphasize the importance of awareness of market […]
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 […]
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 […]
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, […]
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 […]
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. […]
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 […]
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 […]
The following excerpts (of Q&A) were extracted from the Ruane Cunniff Goldfarb Investor Day Transcript. For those with a little free time, I highly recommend the reading of the entire transcript. These guys are masters at dissecting businesses and identifying the heart of any topic. Psychology, Creativity Question: About 36 years ago, shortly before Benjamin […]
A friend sent me a fund letter a few months ago, and I ruminated over whether to post the following excerpt. Ultimately, I felt compelled to share it with our Readers given its beautifully written and reflective thoughts. It indirectly illustrates the competitive nature of this business. The author of this article (and many more […]
The content below is extracted from an interview with Steve Romick of First Pacific Advisors (Newsletter Fall 2010) published by Columbia Business School. Be sure to browse the other quarterly newsletters containing interviews with well-known investors. Many thanks to my friend Janice Davies of Karlin Asset Management for tipping PM Jar on this useful link. For more information on Steve […]
Investing is full of paradoxes. For example, in this zero-sum game, everyday we walk a fine line between arrogance (conviction that we are right) and humility (possibility that we may be wrong). We’ve written in the past about the importance of self-awareness. Self-aware of our mental weakness(es). Self-aware of our (perceived) strengths. Self-aware of how […]
Below is a continuation of portfolio management highlights from Howard Marks’ recent book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 2 “Understanding Market Efficiency (and It’s Limitation)”: Risk “I have my own reservations about the theory [efficient market hypothesis], and the biggest one has to do with the way it links […]