Blog
"Successful investing is about recognizing the widest gaps between fair value and present value." --Steven Jon Kaplan
BABY DONE, MAMA NEXT (November 27, 2022): All we really need to know we learned in kindergarten, including the story of Goldilocks and the Three Bears. 2021 was
"A value strategy is of little use to the impatient investor since it usually takes time to pay off." --Seth A. Klarman
BIG BOTTOMS (October 16, 2022): Most investors misunderstand bear markets. Bear markets create opportunities for much greater and much faster profits than bull markets
"Here's how to know if you have the makeup to be an investor. How would you handle the following situation? Let's say you own a Procter & Gamble in your portfolio and the stock price goes down by half. Do you like it better? If it falls in half, do y
MAMA BEAR (August 9, 2022): Throughout 2021 some analysts compared the U.S. stock market with Goldilocks and her porridge: not too hot, not too cold, but just right
“Macro worries are like sports talk radio. Everyone has a good opinion which probably means that none of them are good.” --Seth A. Klarman
SAFE HAVENS SHUNNED (June 21, 2022): Since January 4, 2022 large-cap growth funds like SPY finally joined the bear market which began in February 2021 when stocks
“The real secret to investing is that there is no secret to investing.” --Seth A. Klarman
UP YOUR ASSET ALLOCATION (February 6, 2022): Surprisingly few people recognize how dramatically the financial landscape has changed during the past year
“The success of contrarian strategies requires you at times to go against gut reactions, the prevailing beliefs in the marketplace, and the experts you respect.” --David Dreman
DÉJÀ VU ALL OVER AGAIN (January 17, 2022): Most investors are either treating 2022 as though it will be an approximate repeat of 2021 or else they believe that
“An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.” --Benjamin Graham
RING IN VALUE, WRING OUT GROWTH (January 2, 2022): It is human nature to assume that the recent past will continue into the indefinite future. However
“With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future.” --Carlos Slim Helu
NASTY MEAN REVERSION (November 24, 2021): There is a fascinating paradox in the financial markets. The most consistent pattern for asset behavior through the
“It’s not always easy to do what’s not popular, but that’s where you make your money.” --John Neff
BEARISH ROTATION (August 16, 2021): The media have featured numerous articles about how there has been a rotation among equity sectors. However, the assumption which
“Don't panic. The time to sell is before the crash, not after.” --John Templeton
CRACK CRUMBLE CRASH (May 17, 2021): There are all kinds of theories about why U.S. stocks reached all-time record overvaluations in 2021: the Fed, coronavirus
“Investing should be like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” --Paul Anthony Samuelson
INVESTING WHILE INTOXICATED (January 17, 2021): We have experienced all-time record levels of speculative call buying, penny-stock chasing, massive percentage
“If it's obvious, it's obviously wrong.” --Joe Granville
EPHEMERAL EXTREME ELECTION EUPHORIA (November 8, 2020): As a result of eager investor anticipation of a new U.S. political configuration the shares of
“The trick of successful investors is to sell when they want to, not when they have to.” --Seth Klarman
2020 RETREAT, 2021 REBOUND (August 23, 2020): The most difficult aspect of investing is appreciating the urgency to act when almost no one else wants to do so
“Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred.” --Seth Klarman
SLASH TRASH, STASH CASH (August 2, 2020): The last seven months have featured wild market swings in both directions. At the start of 2020 investors were
“Buy on the sound of cannons; sell on the sound of trumpets.” --Nathan Rothschild, 1810
EUPHORIA TO PANIC TO EUPHORIA (June 9, 2020): Since the internet became popular in the 1990s we have experienced far more frequent and more exaggerated extremes in both directions for
“When your views are truly contrarian they are inevitably uncomfortable. Courage and the ability to withstand pain are required.” --Michael Steinhardt
STEADILY SELECT SPLATTERED SECURITIES (March 30, 2020): A useful analogy to a bear market is to imagine that several dozen people carry buckets of brightly-colored paint up to various
“Humans are prone to herd because it is always warmer and safer in the middle of the herd. Indeed, our brains are wired to make us social animals. We feel the pain of social exclusion in the same parts of the brain where we feel real physical pain.
FEAR: STOP FEEDING, START FADING (March 8, 2020):
There are two ways investors can respond to the coronavirus panic. The first one is the overly obvious wrong one: pile into
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” --Charles Mackay (1841)
MARKET MURDER MYSTERY (February 2, 2020): One feature of the global financial markets since the internet became popular in the mid-1990s has been an unusual concentration of irrational
“To buy when others are despondently selling and to sell when others are avidly buying requires the greatest of fortitude and pays the greatest ultimate rewards.” --John Templeton
INFLATION'S GYRATIONS (December 4, 2019): When I wrote my last update on August 7, 2019--I will try not to wait so long before the next one--the media were obsessed with the inverted
“The hardest thing over the years has been having the courage to go against the dominant wisdom of the time, to have a view that is at variance with the present consensus and bet that view.” --Michael Steinhardt
“To succeed as a contrarian you must recognize what the crowd believes, have concrete justification for why the majority is wrong, and have the patience and conviction to stick with what is, by definition, an unpopular bet.” --Whitney Tilson
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” --Benjamin Graham
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” --Benjamin Graham
“Yet high uncertainty is frequently accompanied by low prices. By the time the uncertainty is resolved, prices are likely to have risen.” --Seth Klarman
“Yet high uncertainty is frequently accompanied by low prices. By the time the uncertainty is resolved, prices are likely to have risen.” --Seth Klarman