“The problem here is the notion of “better,” this focus on
skills as leading to success. Random outcomes, or an arbitrary situation, can
also explain success, and provide the initial push that leads to a
winner-take-all result. A person can get slightly ahead for entirely random
reasons; because we like to imitate one another, we will flock to him. The world
of contagion is so underestimated!” –Nassim Taleb, The Black Swan
Friday, September 28, 2012
Thursday, September 27, 2012
Excerpts from Charles de Vaulx Interview
Below are
excerpts from an interview that Charles de Vaulx gave to the team at Value Conferences and The Manual of Ideas. Charles de Vaulx is
one of the keynote speakers at the European
Investing Summit 2012, which I’m very much looking forward to.
Charles de
Vaulx joined International Value Advisers in May 2008 as a partner and
portfolio manager, and serves as chief investment officer, partner, and
portfolio manager. Until March 2007, Charles was portfolio manager of the First
Eagle Global, Overseas, U.S. Value, Gold and Variable Funds, together with a
number of separately managed institutional accounts.
To secure
your spot at European Investing Summit 2012, go HERE. The current 40% special discount
expires Friday, September 28th.
Excerpts -- Charles de
Vaulx:
Q: You describe your investing approach as cautious and
opportunistic. How is that reflected in security selection and overall
portfolio construction?
A: Well, I think I’ll try to answer your question in a sense
of how that cautious and optimistic approach is reflected today, as we speak,
in the overall portfolio construction of our funds and the way we pick stocks.
I think that our portfolio today is truly eclectic and
multi-cap. Of course, if you look at the top ten holdings you’ll find mid-cap
or larger cap stocks. But if you look at
our holdings in Asia, where statistically today the small cap stocks are much
cheaper than the large cap stocks, you will find a wide array of stocks. We
also hold some mega-cap stocks: Total [TOT], I don’t know if Berkshire Hathaway
[BRK] qualifies as one (probably) as well as tiny, little stocks in Japan,
Korea or Switzerland. We own a billboard advertising company in Switzerland
called Affichage [Swiss: AFFN], and it’s quite small.
You also see our cautious and opportunistic approach reflected
in the fact that we own some bonds. In the IVA Worldwide Fund here in the U.S.,
we have a little less than 9% in high-yield corporate bonds, mostly a residual
from a lot of bonds we were buying late ’08-’09. So, as a result, many of these
bonds will be maturing shortly in the next year or two or three or four. So
it’s short-duration, high-yield corporates. The yield is not huge. Today, we’re
talking about 4%, but these are what we deem extremely safe instruments and
because the duration is short, there’s no interest rate risk there.
You also will notice the eclectic nature by the fact that we
have some sovereign debt, and it’s approximately 5.1% of the portfolio. It’s
mostly short-dated government debt from Singapore. The coupons, the yields, are
de minimis. Here the attempt on our part is to hopefully get an equity-type
return out of the underlying currency. The hope is that the Singapore dollar
will keep appreciating over time and, of course, in two years from now when
those bonds mature the idea is to just roll them over and buy new similar
short-dated bonds and to remain exposed to the Singapore dollar. Because that
country doesn’t have much of a fiscal deficit, there’s not much of a long-dated
government bond market to begin with.
You’ll see the eclectic nature by the fact that we hold some
gold in the portfolio, both bullion and gold-mining shares. I am happy to have
convinced Jean-Marie Eveillard in late 2001 that gold-mining shares were so
obscenely expensive, overpriced, that if we wanted exposure to gold we had to
modify our prospectus to give ourselves the right to hold gold bullion. It’s
been a great move! We own a few gold
mining shares, but it’s really de minimis and only in our U.S. registered
mutual funds. Our preference remains, by
far, towards holding gold bullion.
You’ll notice that at the end of June [2012] we had 12.4% in
cash. In some ways you may want to view those short-dated, Singapore dollar
bonds as quasi cash in Singapore dollars. The fact that we’re not fully
invested tells you that we are worried that we think that, by and large, stocks
are not dirt cheap enough to be fully invested.
If you look at the kinds of names we own in stocks or at
least if you look at the top-ten holdings, you’ll notice that the balance
sheets of the companies we own are very strong. We are very fond of the
expression Marty Whitman coined a while back, which is that it’s not enough for
a stock to be cheap, it also has to be safe – “safe and cheap”. Safety starts with the balance sheet.
The cautiousness of the portfolio is expressed by the fact
that we are making some negative bets. We have virtually no financials except
for a few insurance brokers, except for – and we may talk about it later – some
tiny positions in Goldman Sachs [GS], UBS [UBS]. Financials in the U.S. are
slightly too expensive and in Europe we think that most banks remain grossly
undercapitalized.
Another negative bet you’ll notice is that, other than a few
stocks in South Korea, we have virtually no exposure to emerging markets. We have no direct exposure to the BRICs –
Brazil, Russia, India and China – because even though these stocks have come
down a lot last year and some of them this year, we believe that these stocks
are dead. We are cautious and worried about what’s going on in China. We
believe that a soft landing is in the cards, and hopefully that will not become
a hard landing. Any sharp slowdown in
China will have major consequences for commodity prices, which in turn will
hurt many emerging countries.
Some specific countries like India have obvious issues with
inflation and current account deficits, not to mention problems with their
electricity. We’ve seen in Brazil over the past year-and-a-half how government
intervention has had the ability to hurt investors.
Investors in Petrobras [Sao Paolo: PETR] have seen President
Rousseff, basically ask the company to think more about what’s good for Brazil
Inc. as opposed to doing what’s right for the company’s shareholders.
Also, we worry about what’s going on in Europe. We’re not
sure what the outcome will be. It’s a big unknown and the way we express our
skepticism towards what’s happening in Europe is by being 65% hedged on the
euro. We are willing to hold quite a few
European stocks because we believe that many of them are multinational and not
necessarily that Euro-centric.
Conversely, let’s not forget that quite a few American
companies have a lot of their revenues in Europe. Also, even in the instances when some of our
European stocks are quite Euro-centric in terms of where their business is
conducted, we think that some of these businesses may not be as cyclical as
others, or if they are, the price of the stock may already reflect that it’s
going to be a difficult economic environment for a long time in Europe. So, in
other words, there are many stocks in Europe where we think the bleakness of
what’s going on has already been priced in.
Q: You state that you seek investments in companies of any
size that typically have one or more of the following characteristics –
financial strength, temporarily depressed earnings, or entrenched franchises.
What are some examples of these temporary challenges, temporary depressed
earnings for otherwise financially strong and entrenched businesses?
A: I’ll give you an example from the past and a more recent
example. I remember in the late ‘90s we bought McDonald’s [MCD], the fast food
company. Why? Because we were impressed by how global they were, much more
global than some of their competitors. We also, early on, understood what Bill
Ackman saw a few years later, which is the real estate angle, the fact that
they own so much real estate, a lot of it they rent out to franchisees. Addressing your question of temporary
challenges, the reason why that stock became so cheap back then is that the
company was suffering because the food had become very bad — much worse than
the competitors. And the service — there were many complaints about the quality
of the service.
We felt that those two issues were fixable. Once those
issues were recognized by top management, they were eventually able to fix them
and the stock over time has gone up extensively. A more recent example would be
was last summer, News Corp. [NWSA], Murdoch’s media company. They had the scandal associated with their tabloids in the
UK. The stock came down and, yet, we were comfortable building a decent-sized
position. The company had a very strong balance sheet, so we thought that they
could suffer having to pay some fines.
With hindsight, the balance sheet was so strong that, in fact, the
company has been very aggressive buying back their own shares since then. On a
sum of the parts basis, a year ago, the stock fell as low as $15 or $16. We
had, on a sum of the parts basis, a value of around $30.
News Corp. is a very different company than it was 20 years
ago. News Corp. almost went bankrupt in the early ‘90s and at the
time it was mostly newspapers, magazines, but today’s businesses, BSkyB, Fox,
there’s very little print, in the sense of being threatened by the Internet.
These are very powerful businesses— one of the businesses is 20th Century Fox,
which is a decent business, so pretty un-cyclical businesses with no major
immediate sort of threat to their businesses – high margin businesses, a very
strong balance sheet.
The way we interpreted the scandal is, we thought it had a
silver lining because via some super-voting structure, Murdoch controls the
company. We thought that the scandal – because it’s such a public business– he
would be forced to improve corporate governance, which I think he has. We felt
the Chief Executive Officer, Mr. Carey, was very competent as was the
predecessor, Mr. Chernin. We realized that the super-voting control allowed him
to make some mistakes in the past, but small mistakes.
He lost a lot of money when he overpaid for Dow Jones, the
publisher of The Wall Street Journal. He overpaid for MySpace, but in the grand
scheme of things these were small deals and, conversely, to his credit as a
media guy, he saw the changes that were happening in the newspaper industry and
moved away from that over the years. Today, the stock is at over $24. I think
that was a good example of what we thought was a temporary challenge and one
that was limited to just one part of their empire.
One stock that we’ve bought over the past six, nine months
is a French-based company called Teleperformance [Paris: RCF]. They run
corporate call centers, and that’s a case where all of the earnings pretty much
come from the United States. They’re very powerful in the U.S. In fact, for all
practical purposes, the company should be headquartered and listed here. It’s
sort of an accident that it is listed in France. The French founder happens to
live in Miami, and it’s an interesting case where the French operations are
losing a lot of money.
It’s much harder in France than in the U.S. to fire people
and so they are not able to stop the bleeding right away in France, and I think
we feel that we can quantify what those losses will be. Worst case, the company
can hopefully shut down the business over time, and I think those losses in
France mask the quality of their earnings in the U.S.
Historically, there have been many instances where we have
dabbled a lot in what we call high quality, yet, cyclical businesses.
If you think about temporary staffing companies – Randstad,
Manpower; if you think about the freight forwarding companies – Kuehne + Nagel, Panalpina, Expeditors
International… If you think about the advertising companies, billboard
advertising, they are good businesses in the Warren Buffett sense of return on
invested capital — service businesses, high returns on capital, high free cash
flow. They are cyclical because, oftentimes, other investors have a
shorter-term horizon than we do. Whenever the economy goes south, in the world
or in the country, these stocks go down, sometimes excessively so, so that the
stocks implicitly forget that there’s a prospect that it’s just a cyclical
downturn, not a secular change in the business. So we’ve often been doing some
of this in the past.
Q: When it comes to Europe, most of your investments there
are in companies headquartered in France and Switzerland. Why not more in
Germany or peripheral European countries?
A: Again, great question. Let me start with Germany. In the
past, we have had quite a few investments in Germany. We used to own in the
early 2000s, late 1990s-2000s, Buderus [formerly Frankfurt: BUD]. It was our
largest holding. Buderus is a boiler manufacturer. We’ve owned shares such as
Vossloh [XETRA: VOS], Axel Springer [XETRA: SPR], Hornbach [XETRA: HBH3], the
DIY retailer and so forth, but the reality is that most companies in Germany
are not listed. If you think about industry, industrial companies in Germany,
they are not listed because they belong to what the Germans call the
mittelstand. The mittelstand are those thousands and thousands of basically
small and mid-size companies, many of which are family-owned, and these
companies are not listed. All those great German industrial companies basically
are not available in the stock market.
Now, among the companies in the stock market, many have been
recognized as good companies and so the stocks are no longer cheap — if you
think about some of the auto manufacturers like Volkswagen. So for the time
being, we don’t have much in Germany, although we did buy, a month ago, a large
industrial German company.
Switzerland is an interesting country where there are many
quality companies. Even though we’re value-oriented, we start our process with
trying to identify not so much cheap-looking stocks, but quality businesses. We
like quality and then we hope and pray that somehow, one way or the other, we
can get it for cheap.
Switzerland has so many great businesses, whether it’s
Kuehne & Nagel [Swiss: KNIN], which is an even better freight forwarding
company than Expeditors International here in America. Nestle is a wonderful
food company, better in my mind than Kraft [KFT]. Geberit [Swiss: GEBN] makes
great plumbing products. Lindt & Sprüngli [Swiss: LISN], as I’m sure you
know, makes delicious chocolates, and so it’s our bias to its quality that
oftentimes has led us to Switzerland. Adecco [Swiss: ADEN] is a leading temporary staffing company, has much
higher margins than Manpower [MAN], has higher margins than Randstad
[Amsterdam: RAND]. They just have top-notch companies in Switzerland,
and sometimes we are lucky to get them cheaply.
France is an interesting country because even though France
has had and today has those socialist tendencies, France has an amazing number
of great businesses, which oftentimes are global leaders. Think of
Pernod-Ricard [Paris: RI]. Pernod-Ricard started as a little family-controlled
business in the south of France and through astute management and acquisitions they
have become a leader in the sale of liquor competing very well against Diageo,
which is best-in-class in that industry. Think about L’Oreal — what a
wonderful, global consumer company. And
of course everyone knows that France is the home of stocks such as LVMH and
Hermes, the luxury good companies.
In France, we own Sodexo [Paris: SW] a food catering
company. They compete against Compass [London: CPG] in the UK. Sodexo is a very
well-run, global company. They have a huge subsidiary here in America, Marriott
Services, which they acquired a long time ago.
There’s a stock we don’t own now but we’ve owned in the
past. It’s become somewhat of a darling, Essilor [Paris: EI]. They are, by far,
the leading company worldwide that manufacturers lenses for glasses.
We’ve owned in the past Bureau Veritas. It’s a little bit
like ISS [Group] in Switzerland. It’s an inspection service company and they
have big market shares in many specific niches. It’s a service business,
non-capital intensive.
France has companies such as Legrand [Paris: LR]. Legrand is
the leader worldwide in electrical switches.
France does have those global companies that are very good
at what they do and, at the same time, many of these companies are
family-controlled. We at IVA believe that more often than not family-controlled
businesses do better than other types of business and could not agree more with
Tom Russo from Gardner Russo & Gardner on that topic. One of his big themes is that he loves, for
the same reason we do, family-controlled companies because they have a long
term vision and often times do great things.
The final point I want to make about France, and it’s
important from a protection of minority shareholders standpoint, is that France
is a pretty good place to be a minority shareholder. When there are takeovers
in places like Germany or Switzerland, not to mention Italy, you often, as a
minority shareholder, can be abused.
In France, especially now, compared to 20 years ago,
minority shareholders are well treated when there are squeeze-outs and
takeovers. The protection of minority shareholders is pretty high in France.
That’s important because it just so happens that quite a few of our companies,
not by design, get taken over, and when that happens we want to be well protected.
If you look at places like Italy, there aren’t that many
listed companies, sort of the same reason as Germany. All these companies, like
industrial companies based in northern Italy, most of them are family-owned and
not listed. So there’s not that much available in the stock market, and some of
the other countries in Europe — Spain, Portugal, Austria — oftentimes the
biggest stocks are just the big banks and insurance companies. Most of them
are, especially on the banking side, grossly undercapitalized. They may look
cheap, but they are certainly not safe. Again, not a lot of quality stocks are
available in the Greek stock market, or the Portuguese or Spanish one.
Wednesday, September 26, 2012
Tuesday, September 25, 2012
Monday, September 24, 2012
Education Nation: Rural Arkansas Town Rethinks High School
Thanks to Matt for passing this along. It reminds me of
something Mohnish Pabrai talked about at the Pabrai Funds Annual Meeting this
past weekend. He mentioned that studies show that the brain is developing
quickly between the ages of 12 and 19, and that this is a time when kids should
be beginning to specialize in something and really start pursing their
interests, and yet our education system is rarely set up this way. He mentioned
Warren Buffett (among others) as an example of someone who had gotten an early
start on his passion around those ages and went on to become successful as he
learned valuable lessons and got that spark during those important times. In
Buffett’s case, he was doing things like renting out pinball machines and a
Rolls Royce, among other ventures.
Friday, September 21, 2012
The Einhorn Effect
Thanks to Andrew for passing this along.
About 37 minutes into Herbalife Ltd.’s first-quarter conference call in May, the operator introduced hedge-fund manager David Einhorn. Listen to Mr. Einhorn’s back-and-forth with Herbalife president Des Walsh and Chief Financial Officer John DeSimone -- and watch how the market reacted. Times are approximate, based on the call's 11 a.m. start.
About 37 minutes into Herbalife Ltd.’s first-quarter conference call in May, the operator introduced hedge-fund manager David Einhorn. Listen to Mr. Einhorn’s back-and-forth with Herbalife president Des Walsh and Chief Financial Officer John DeSimone -- and watch how the market reacted. Times are approximate, based on the call's 11 a.m. start.
Ray Dalio on CNBC
Link to videos:
Dalio on QE3 and US Dollar
What Worries Hedge Fund Titan Ray Dalio?
Possible Downturn in US Economy: Ray Dalio
Sharpening America's Competitive Edge
China's Troubles Continue to Plague Investors
Hedge Fund Titan Reads Europe's 'Tea Leaves'
…………….
Related previous posts:
Bridgewater's Dalio on Europe, Economy, Strategy (video)
A Conversation with Ray Dalio (Video)
Related links:
An In-Depth Look at Deleveragings
How the Economic Machine Works
Dalio on QE3 and US Dollar
What Worries Hedge Fund Titan Ray Dalio?
Possible Downturn in US Economy: Ray Dalio
Sharpening America's Competitive Edge
China's Troubles Continue to Plague Investors
Hedge Fund Titan Reads Europe's 'Tea Leaves'
…………….
Related previous posts:
Bridgewater's Dalio on Europe, Economy, Strategy (video)
A Conversation with Ray Dalio (Video)
Related links:
An In-Depth Look at Deleveragings
How the Economic Machine Works
Thursday, September 20, 2012
Seneca quote
"Be careful, however, lest this
reading of many authors and books of every sort may tend to make you
discursive and unsteady. You must linger among a limited number of
master thinkers, and digest their works, if you would derive ideas which
shall win firm hold in your mind. Everywhere means nowhere. When a person spends all his time
in foreign travel, he ends by having many acquaintances, but no friends.
And the same thing must hold true of men who seek intimate acquaintance
with no single author, but visit them all in a hasty and hurried manner." -Seneca, Letters from a Stoic
Wednesday, September 19, 2012
William B. Irvine: Older and Wiser: Ancient Advice on Aging Well
Professor Irvine comes on around the 7-minute mark. His new book, A
Slap in the Face: Why Insults Hurt--And Why They Shouldn't, that was
mentioned towards the end of the talk comes out in February.
William B. Irvine: Older and Wiser: Ancient Advice on Aging Well from Center for Values in Sci & Tech on Vimeo.
William B. Irvine: Older and Wiser: Ancient Advice on Aging Well from Center for Values in Sci & Tech on Vimeo.
…………….
Related books:
Related previous posts:
Three New Instructors Announced for European Investing Summit
One of the new additions is John Gilbert, Chief Investment
Officer of General Re-NEAM. As regular readers probably know, I frequently link to
Mr. Gilbert’s monthly letters, which are some of the best (and are available HERE). Mr.
Gilbert also gave a presentation last year that I highly recommend: "Asset
Management Perspective: Financial Crises--Danger and Opportunity"
To learn more or to sign up for the European Investing Summit
2012, go HERE.
McNamee: Apple Is Amazing, but Making Big Mistakes (video)
Thanks to Andrew for passing this along. The complete segment with McNamee, where he also discusses Facebook and Yahoo!, is available HERE.
Tuesday, September 18, 2012
Nassim Taleb quote (asymmetry)
“Put yourself in situations where favorable consequences are
much larger than unfavorable ones…Indeed, the notion of asymmetric outcomes is the central idea of this book: I will never
get to know the unknown since, by definition, it is unknown. However, I can
always guess how it might affect me, and I should base my decisions around
that.” –Nassim Taleb, The Black
Swan
Gina Kolata on Charlie Rose
Link to: Gina Kolata on Charlie Rose
..................
Related articles:
Human genomics: The new world of DNA
Bits of Mystery DNA, Far From ‘Junk,’ Play Crucial Role
Bridgewater's Dalio on Europe, Economy, Strategy (video)
.................
Related previous post: A Conversation with Ray Dalio (Video)
Related link: Ray Dalio on the Global Economy
Related link: Ray Dalio on the Global Economy
Monday, September 17, 2012
Apple Share Price....
Apple Share Price at the end of September 2001-2011 and
today:
Year Share Price
2001 $7.72
2002 $7.22
2003 $10.32
2004 $19.29
2005 $53.38
2006 $76.65
2007 $152.81
2008 $113.17
2009 $184.56
2010 $282.54
2011 $379.69
Today $699.78
Some interesting excerpts from the 2002 Annual Report
(September Year-End):
- The Company believes that personal computing has entered a new era in which the personal computer functions for both professionals and consumers as the digital hub for advanced new digital devices such as digital music players, personal digital assistants, cellular phones, digital still and movie cameras, CD and DVD players, and other electronic devices.
- Introduced in October 2001, the original iPod portable digital music player utilized a 5GB hard disk drive allowing it to hold up to 1,000 CD- quality songs in a 6.5 ounce design…. In March 2002, the Company added a 10GB model to its iPod line, and in July 2002, the Company added a 20GB model and announced that all iPod models would be made available in Windows- compatible versions.
- By the end of September 2002, the Company had 40 retail stores operating in the United States, 32 of which were opened during fiscal 2002. The Company has opened 11 additional stores during the first quarter of 2003. During 2002, approximately 39% of the Retail segment's net sales came from the sale of Apple- branded and third- party peripherals and software. This compares to 21% for the Company as a whole. With an average of 35 stores open, the Retail segment achieved average annualized revenue per store during the fourth quarter of approximately $12 million and had approximately 2.25 million visitors.
- … the Company's Retail segment grew from 8 stores at the end of 2001 to 40 stores at the end of 2002. The Retail segment's net sales grew from $19 million in 2001 to $283 million in 2002.
Some interesting excerpts from the 2003 Annual Report
(September Year-End):
- The Retail segment's net sales grew to $621 million during 2003 from $283 million in 2002, an increase of 119%.
- Net sales of peripherals and other hardware rose $384 million or 57% during 2003 compared 2002, which follows a $287 million or 74% increase in 2002 as compared to 2001. The current year increase was primarily driven by the $202 million, or 141%, year-over- year increase in iPod net sales to $345 million.
- Although total Macintosh unit sales were down 3% in 2003, unit sales of the Company's portable systems were relatively strong primarily due to the 69% or 247,000 unit increase in PowerBook unit sales, slightly offset by a 4% or 30,000 unit decrease in iBook unit sales. The increase in PowerBook net sales of $468 million or 56% is due primarily to the success of the Company's new 12- inch, 15- inch and 17- inch models that were introduced during 2003.
Examining the Ubiquity of Private Equity
I just received a review copy of this book in the mail
today. It looks pretty interesting.
…………….
Howard Marks quotes
The quotes
below are from the 27-page transcript of Marks’ Interview with Value Conferences and the team at The Manual of Ideas. The transcript is
part of the 11 bonuses immediately available upon registering for the fully online
European Investing Summit 2012. To learn more about the conference or sign up
(great value for the money), go HERE.
Excerpts -- Howard Marks:
"The interesting thing about investing is what I call
the perversity. The point is that it is so not intuitive. It is so not
obvious — investing. A great example lies in the fact that, people think that
to be a good investor, you have to understand companies. But the market has an
understanding of companies, and if you understand the company the same as the
market does, even if the market and you are right, you are not going to make
any special profits."
"...when my son comes to me, who is a budding hedge
fund investor, he gives me an idea, a stock, macro trend, or something like
that, the first question I always ask is the same: Who doesn’t know that? That
is really the question. When you think you know something, the question is
whether the market knows it too. And if it does, then your idea has no relative
superiority."
"...[investing] is really not a good business for
people who don’t have some ego because you have to do the things that Dave Swensen
describes as lonely and uncomfortable. I think it was [Jean-Marie] Eveillard
who said it was warmer in the crowd, in the herd. But if you only hold popular
positions, you can’t do better than average, by definition. And I think you
will be very wrong at the extremes."
"The greatest example is this: If you went to the horse
races, would you always bet on the favorite? The favorite, assuming the crowd
is intelligent, which usually it is, is the horse with the highest probability
of winning. That doesn’t mean that the favorite is always the best bet. You
might have another horse that has a lower probability of winning but the odds
are so much higher, that’s the smart bet..."
"[U.S. Treasuries] are a safe investment in the sense
that the outcome is known and not really subject to variation. I think they are
not a good investment because the known outcome is an unattractive one. Today you can buy the ten-year [Treasury] and with no risk,
lock up the certainty of 1.9% return for ten years. Is that really a good thing
to lock up?"
"What the investor has to do is weigh out on the one
hand price and on the other hand reality. Everybody thinks very dire thoughts
about Europe and the Euro, and I would be the last person in the world to argue
against that position. Then the next question is, European assets are lower in
price because of the macro conditions, but are the macro conditions being
viewed too pessimistically?"
"Tenet number three of our investment philosophy says
we are active in less efficient markets only. We probably wouldn’t do a hedge
fund for large-cap New York Stock Exchange firms because the tendencies are
that those would be more efficient than others. But emerging markets, yes.
Japan, yes."
Saturday, September 15, 2012
Baltasar Gracián quote
“Knowledge and courage take turns at greatness. Because they
are immortal, they can make you so. You are as much as you know, and if you are
wise you can do anything. The uninformed person is a dark world unto himself.
Judgment and strength: eyes and hands. Without courage, wisdom bears no fruit.”-Baltasar
Gracián, The Art of
Worldly Wisdom
Friday, September 14, 2012
Ray Dalio quotes
From THIS
interview (After he also mentioned that he owns gold and thinks it is a good idea
to own gold. He hinted that maybe a 10% position is a decent allocation, and that you should have a certain, limited amount in gold just like you have a certain, limited amount in cash, a certain amount in stocks, a certain amount in bonds, etc.).
“You should
have a strategic asset allocation mix that assumes that you don’t know what the
future is going to hold.”
“In every
generation…there is a ruinous asset class [that] will destroy wealth. And you
don’t know which one that’s going to be in your lifetime. So the best thing you
can do is to have a portfolio that is immune, that is well diversified. That is
what we call an all weather portfolio. That means that you don’t have a concentration
in that asset class that is going to annihilate you.”
……………..
Related article: Risk Parity is about
Balance.
THE LITTLE BOOK OF TALENT by Daniel Coyle - Tip #21
I hadn't realized Daniel Coyle was out with a new book (The Little Book of Talent) until I saw an excerpt on Farnam Street. I very much enjoyed The Talent Code, and look forward to this, related book too.
Link
...............
Related previous post: What it takes to be great
Link
...............
Related previous post: What it takes to be great
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