Figuring things out and solving the puzzles is still the most exciting part. It's very fun to think we understand something that it appears most people view differently. Then you get to find out who's right.
When management really makes us angry, we put the file in a drawer for a while and just don't do anything. We try not to sell just because we're angry. If you sell when you're angry, you can imagine everybody else who sells that way reaches the point of exasperation at exactly the same time. [...]
As our positions have gotten larger, we often find ourselves in situations where we can't trade out positions quickly. There have been cases where we own, say, one million shares and we think we want to sell, but we can only sell 25,000 shares right away. You could say, “Why bother, it's only 25,000 shares?” [...]
We try not to have many investing rules, but there is one that has served us well: If we decide we were wrong about something, in terms of why we did it, we exit, period. We never invent new reasons to continue with a position when the original reasons are no longer available.
After the financial crisis we decided we needed to do a little bit more macro investing, hedging for potential strange outcomes within the system. Having a material stake in gold has been one primary way we've done that.
We believe in constructing the portfolio so that we put our biggest amount of money in our highest-conviction idea, and then we view the other ideas relative to that. We find things that we think are exceptional only occasionally. So if we find something that is really set up, where we think it's mispriced, where [...]
Some areas lend themselves better to our types of analysis than others. It’s very hard for us to figure out what brands are worth, for example. It’s also hard for us to figure out what future scientific developments are worth. We tend to stay away from those kinds of things. But at the right price, [...]