One general mistake we made in starting our firm was that we told ourselves that we should be hedging against macro concerns when that wasn't really our expertise. Short positions were never going to be a big part of our portfolio, but they took up an inordinate amount of time and added an inordinate amount [...]

To some extent, balance sheet risk is a character issue for us. The CEO whose company has a great balance sheet probably isn't going to make the big, dumb acquisition that will kill the company. He's probably not the guy throwing $2 million birthday parties for his third wife at company expense. Other investors like [...]