Portfoliomanagement

IP on August 23rd, 2010

Mr. Druckenmiller has over 30 years’ experience, his Duquesne Capital manages $12 billion and since 1986 never had a down year (although it is down 5% YTD). He worked with George Soros (while still managing Duquesne!) and was there for the famous British pound trade. So why quit? Interestingly, he’s “frustrated by his failure in the past three years to match returns that had averaged 30 percent annually since 1986.” Why, in his opinion, did it happen? “Managing more than $10 billion seems to challenge my long-term standard for investment performance.” A fund manager’s mandate is all about investment performance and not AUM growth – the opposite is not just wrong, it can also be self-defeating.

Read more about Stanley Druckenmiller shuts down Duquesne

IP on August 12th, 2010

In a first of what we hope to be many article collections about investors we keep track of, this one is about Glenn Greenberg of Brave Warriors Capital. He’s better know as the co-founder of Chieftain Capital, but in the end of 2009 him and John Shapiro parted ways (Mr. Shapiro and two other partners left but retained the name Chieftain Capital). Being the first to be profiled in this series isn’t a matter of order of preference at all.

Read more about Glenn Greenberg

IP on June 28th, 2010

Gustavo Loyola, a former Brazilian Central Bank chief, writes an op-ed today about the increasingly irresponsible legislative pieces enacted or proposed by our Congress. He goes back to the ages-proven concept that success breeds failure and vice-versa and applies it to Brazil’s current situation. We’ve been mentioning these risks in our latest reports and it’s part of our reasoning to keep a relatively high cash stake. While it has been somewhat tempered since our last report, some prices still imply a “blue-sky” scenario that we’re not comfortable with.

Read more about Brazilian Congress vs. fiscal responsibility

IP on March 23rd, 2010

Now that the U.S. Healthcare bill has passed and just been signed into law, it’s interesting to notice the amount of noise generated in the past two days. Newspaper and sell-side reports are booming with articles and so-called analysis of what this means to investors, but right now it’s probably better to “do something by doing nothing”.

Read more about Healthcare noise

IP on February 28th, 2010

God has spoken, go out and read it. The core is dedicated to welcoming and explaining BRK to its new shareholders acquired through BNSF, so no big news. Buffett complains more about the media and investments analysts, on how they distort things, causing losses to the less diligent and recommends that everybody form their own knowledge base and opinion. Hope he lives to see that happening, but we sincerely doubt it.

Read more about Berkshire’s annual report is out

IP on February 4th, 2010

We worried about implied expectations for 2010 in our Q4 2009 report and said that we were increasing the percentage of cash in our funds. Enter Greece and other European peripheral countries. Macro issues are not our core by any measure, and our point is just that volatility, that friend of the long-term investor holding a lot of cash, is on the rise. The post collects, as food for thought, interesting FT articles on Greece’s and Europe’s woes.

Read more about Volatility on the rise

IP on February 2nd, 2010

Buffett was particularly expansive regarding his processes and methods, and this alone makes this video worth the time (some 90 minutes). The fact that it was October 1998, a pivotal time in the dot-com boom and just after the LTCM imbroglio makes it even more interesting.

Read more about Buffett pearl: 1998 speech

IP on January 28th, 2010

In the 1st Buysiders article inspired by a reader’s suggestion, we’d like to propose “anti-portfolios”. It’s a vital lesson in humility: our activity involves a certain degree of failure, of missed or simply wrong ideas. Recognizing that we are going to make mistakes over time is extremely important in order to mitigate risk as we define it (the permanent loss of capital). The objective here is to insist, once again, that price is the ultimate measure. (…) After you’ve done all the homework, you still have to demand a price that implies a large margin of safety – and keep analyzing the position everyday with the same skepticism you had before you bought it.

Read more about Anti-portfolios

IP on January 21st, 2010

The investment mood is definitely optimistic and Merrill Lynch’s January 2010 fund manager survey is as good an indication as any: low cash balances, increasing exposure to equities, increasing appetite for risk. Some numbers are back to pre-crisis levels. As we point out in our Q4 2009 report (English version in the works), it’s hard to expect two consecutive years of out-sized returns and we’re prepared for a less ideal 2010.

Read more about Perspectives

IP on November 13th, 2009

They took questions from Columbia grad students and the event was broadcast live by CNBC. It has an eerie feel to it – with the whole “must keep spirits high” approach. That said, both men think in the long term (15+ years) and it’s always interesting to be reminded of some basic concepts.

Read more about Buffett and Gates at Columbia University

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