Soon after graduating from college I went through some testing at the Johnson O'Conner Institute and found I have two prominent aptitudes, inductive reasoning and what they call ideaphoria. These don't often go together one involves a logical progression from specific observations to arriving at broader generalizations, while the other is an unusually high-frequency flow [...]
If you subscribe to the thesis as I do that the greatest amount of money is made from having great confidence in contrarian positions, I think you'd find the people who are comfortable taking these positions don't tend to fit in with the mainstream. Going against the grain is clearly not for everyone and it [...]
We short because I think it is the most prudent way to manage a portfolio, from a risk perspective, and because I believe the key to successful long-term investing is to avoid losses. We also short because in certain subsections of the market it's easier than buying stocks. There are always classes of companies that [...]
When there is a cyclone of wealth transfer into an area, some of the participants in the fledgling industry will be real companies whose products and services will change the world. But there will also be dozens of other companies that are bogus and run by unscrupulous promoters. That's the subset of the market we're [...]
My mistake in 2009 was that in March when I should have been buying I felt things were completely unraveling and started selling my longs and increasing my shorts. I've spent my career trying to think only for myself and in this instance I was so influenced by the external world that I blew it [...]
Our primary mistake in 2008 was buying too soon when the market started cracking in September. My takeaway: Sometimes it's best to let the other guy try to pick the bottom. In selloffs like that, there will be plenty of room to get in on the upside.
We look for certain behavior patterns in management that are consistent with an efficient and prudent guardianship of our assets. If we visit a fan manufacturer in Texas and the CEO meets us at the airport in his Lexus, spends five hours with us, and then takes us out to an expensive restaurant and buys [...]
In our experience, it’s revenue and earnings momentum that catapults a stock out of the swamp. We’re looking for elements of positive change fresh management blood, a changing market, a changing regulatory environment, a shift in competition which suggest a future characterized by reliable and increasing earnings. We have to be predictors of growth to [...]