Portfoliomanagement
The first 4-5 pages in GMO’s Q3 2009 letter are entertaining for their irony, but it’s hard to disagree with Mr. Grantham’s conclusion: concentrate your portfolio in quality U.S. stocks with a global earnings mix. We’d extend that to some non-US quality stocks with diversified earnings sources, of course.
In these excerpts of our Q3 2008 report, we discuss our use of the tried and true “roadmap” that our investment philosophy provides during even such periods of turmoil. In a nutshell, “In extreme situations, it makes all the difference to have very clear principles coupled with a simple, hands-on philosophy executed with discipline.”
David Einhorn of Greenlight Capital is a fixture of the NY Value Investing Congress – and it’s always useful to take some time to read his thoughts.
The Value Investing Congress is taking place in NYC and here’s the Twitter feed. This is a quick post with some highlights of what went on in the first day. We have attended the VIC in other occasions, but not this year. If you’re ever in NY during this time of the year, it’s worth a shot.
We’ll hold our judgement on “behavioral finance funds”. The point here is that these funds are ultimately offered to human clients, and as this quote notes, “It would be really kind of ironic if you invested in a fund based on behavioral finance and you sold it after the fund had a big loss or added to it after it was up 50 percent.” (…) “It’s hard not to be human.”
Minimizing errors is one of the most underated strategies. From investment management to tennis, in most cases a technically inferior player who concentrates in not making unforced mistakes will defeat an otherwise superior opponent that takes dumber risks.