Lowry retrospective - Five of the best from The Value Perspective’s Jamie Lowry
For reasons we explained in Poll position, we may not have any view on ‘Brexit’ but, here on The Value Perspective, we certainly have a strong opinion on ‘Jexit’. Jamie Lowry is the first member of our team to head for pastures new since this bastion of all things value was set up in 2011 and we thought it only right to mark his departure by offering up this small selection of his ’greatest hits’ …
Basic mistake – Why one lesson of ‘Finance 1.01’ is ‘Wrong. All wrong’
Any student of finance or economics will recognise the chart below. It shows the graphical relationship between risk and return – the idea that, as investors take on more risk, they should be compensated with more return. The leap people tend to make from this is that, in order to earn greater returns, they need take more risk – but is that a correct conclusion? Read more …
Luck and judgement – Value investment acknowledges the part randomness can play in all of life
Do we make our own luck? It is a question tackled with great insight by Oaktree Capital Chairman Howard Marks, one of The Value Perspective’s favourite investors, in his excellent memo to the firm’s clients, ‘Getting lucky’. We will pick out a few of his points on the way to making our own but, if you have not read it already, the whole memo really is worth a look. Read more …
Short shrift – Other investors may not like short-sellers but they can learn from them
Short-sellers often come in for criticism from both the media and the wider world of finance – not least because their aim of profiting from the failure or collapse of a business rather than its success can strike many as somewhat contrary to the spirit of investment. However, as a recent coup by the colourfully named Gotham City Research illustrates, there is a lot other investors can learn from short-sellers. Read more …
In praise of dull – Boring can often be viewed as a sin but not in the world of value investing
Boring may be the last thing you want to be faced with at a party or across a dinner table but, in the world of investment, the quality is by no means so undesirable. Committed value investors have been aware of this – and been rewarded by the knowledge – for decades now but is there actually any science underpinning the idea that boring can be a positive? Read more …
Long run, Forrest, long run – Buying a great stock may be hard but holding on to it is harder
"Lieutenant Dan got me invested in some kind of fruit company. So then I got a call from him, saying we don’t have to worry about money no more. And I said, that's good – one less thing." The spectacular investment returns enjoyed by Forrest Gump and his friend Lieutenant Dan on the back of their investment in the nascent Apple Computers at the start of the 1980s came to mind as we enjoyed an excellent piece by Barry Ritholtz in The Washington Post, ‘The world’s greatest stockpicker? Bet you sold Apple and Google a long time ago’. Read more …
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