In cases in which we haven't made a mistake or something better hasn't come along, we've evolved our selling strategy somewhat. We used to have a fairly rigid rule that as soon as something went above the market multiple we'd sell, but we thought we too often were leaving money on the table so we [...]
Investing is often about knowing your strengths and we've learned that we're better at spotting profitable, unglamourous, undervalued companies than we are at identifying traditional turnarounds by which I mean money-losing companies we expect to get back into the black. As a result, we set a guideline for ourselves that no more than 10 percent [...]
In general, we try to constantly remind ourselves that when an industry goes south, things often get worse than you expect and stay bad longer there's usually plenty of time to find the bottom.
We named our firm Thunderstorm Capital because a thunderstorm is a frightening but temporary event that usually passes without lasting damage. In constructing our ortfolios, we try to invest in good companies whose stocks are depressed by frightening but temporary bad news. The trick, of course, is to distinguish thunderstorms from Category-5 hurricanes.
I was always so impressed by John Templeton’s enthusiasm, the fresh approach he seemed always to take and, of course, how independent a thinker he was. In 1939, right after Hitler marched into Poland, Templeton bought loo shares of every stock on the Big Board selling for less than $1. Within a few years he [...]
Investors overreact to the latest news, which has always been the case, but I think it’s especially true today with the Internet. Information spreads so quickly that decisions get made without particularly deep knowledge about the companies involved. People also overemphasize dramatic events, often without checking the facts. It’s the classic, “Are more people killed [...]