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 […]
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 […]
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 […]
“I believed if we delivered high double-digit returns at relatively low volatility, the rest of the business would take care of itself. I have been cured of that illusion.” –Andy Redleaf, Whitebox Anyone who believes that investment acumen alone is enough to build a successful investment management business should read the article below. Excerpts are […]
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 […]
I’ve always found it curious why talent turns over so frequently at investment firms (at least in hedge fund land). Investing is a judgment-oriented business, and team turnover can be highly disruptive to the investment process. To retain talent, most people throw money at the problem. The video below will show you why that doesn’t […]
The following excerpts are derived from Jack Schwager’s interview with Bill Lipschutz in The New Market Wizards. Lipschutz helped build and ran Salomon’s currency desk for many years – here is a 2006 EuroMoney Article with additional background on Bill Lipschutz. There are number of worthwhile portfolio management tidbits here, mainly the relationship between making mistakes, […]
Below are numerous psychological gems extracted from Chapter 1 of More Than You Know by Michael Mauboussin. Also be sure to check out his thoughts on Process Over Outcome. Psychology, Sizing “The behavioral issue of overconfidence comes into play here. Research suggests that people are too confident in their own abilities and predictions. As a […]
The following video perfectly explains why (the perception of) fairness matters, and the degree to which fairness is built into our DNAs. Given the reaction of the monkey (compensated unfairly for task performed), this concept is pretty relevant to team management.
Previously, we summarized an interview with Michael F. Price & an interview with David E. Shaw from Peter J. Tanous’ book Investment Gurus. Below are highlight from yet another fantastic interview, this time with Peter Lynch, the legendary investor who ran Fidelity’s Magellan Fund from 1977-1990, compounding at ~30% annually during that period. When To Buy, Volatility, Catalyst […]
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 […]
Continuation of our series on portfolio management and the Buffett Partnership Letters, please see our previous articles for more details. Control, Volatility “When such a controlling interest is acquired, the assets and earnings power of the business become the immediate predominant factors in value. When a small minority interest in a company is held, earning power and […]
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 […]
Before my November vacation, I will leave you with a juicy Baupost piece compiled through various sources that shall remain confidential. Instead of the usual excerpts or quotes, below are summaries of ideas and concepts. Creativity, Making Mistakes False precision is dangerous. Klarman doesn’t believe that a computer can be programmed to invest the way […]
Part 2 of highlights from an insightful interview with Lisa Rapuano, who worked with Bill Miller for many years, and currently runs Lane Five Capital Management. The interview touches upon a number of relevant portfolio management topics. Rapuano has obviously spent hours reflecting and contemplating these topics. A worthwhile read! Fee Structure “…I launched my fund [November […]
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 […]
Continuation of content extracted from an interview with Steve Romick of First Pacific Advisors (Newsletter Fall 2010) published by Columbia Business School. Please see Part 1 for more details on this series. Creativity, Team Management “G&D: We also noticed that you recently hired Elizabeth Douglass, a former business journalist with the LA Times, which we found interesting […]
Continuation in a series on portfolio management and the Buffett Partnership Letters, please see our previous articles for more details. Topics covered include: Benchmark, Hurdle Rate, Expected Return, Volatility, & Team Management. Benchmark, Hurdle Rate “At plus 14% versus plus 10% for the Dow, this six months has been a less satisfactory period than […]
This is a continuation in a series on portfolio management and the Buffett Partnership Letters. Please see our previous articles for more details. A slightly off tangent and random fact, in 1962, Buffett into new office space stocked with – hold on to your knickers – “an ample supply of Pepsi on hand.” Team […]
I recently read an interview in Inc. Magazine on leadership and people management with Bob Sutton, a Stanford professor. Sutton’s audience is mainly corporations and other businesses, but his comments are directly applicable to the investment management business. After all, whether we like it or not, the investment management business is still a business that […]