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Investment Observations

The following are a few of the fundamental investment opinions we have accumulated through years in the industry, which inform our investment philosophy and help shape our view of global markets.

  • 1 Someone always wins.

    Someone is always taking the other side of your trade. What do they know that you don’t?

  • 2 Markets are not efficient.

    The markets are made to be taken advantage of, not to be persuaded by.

  • 3 The markets are manipulated.

    Never forget that the government always wants the market to go up and that the further the market goes down the more manipulated the market becomes.

  • 4 Know your enemy.

    Wall Street is more concerned with putting money in their pocket than putting it in yours.

  • 5 Cash is king.

    Cash is a great place to invest when you don’t have a good reason to risk capital.

  • 6 This time is never different.

    If someone tries to convince you otherwise, back out of the room with your hand on your money.

  • 7 Make change your ally.

    Every investment system or model will eventually become obsolete.

  • 8 Focus on the present.

    Understanding the present is more important than predicting the future.

  • 9 Leverage can make bad decisions worse.

    Leverage reduces your ability to make non-subjective investment decisions.

  • 10 Understand your weaknesses.

    Controlling your emotions and avoiding previous mistakes are the essential ingredients for investment success.

  • 11 Sell high and buy low.

    The human condition makes it more difficult to sell what’s going up and buy what’s going down.

  • 12 Short positions decrease correlations.

    When volatility increases, everything becomes correlated except a short position.

  • 13 Expect the unexpected.

    Always leave yourself a margin of safety to protect against unexpected outcomes.

  • 14 Less is more.

    It is always better to win a bunch of small bets than one big one.

  • 15 Don’t expect a different result.

    History doesn’t always repeat itself but it rhymes very closely.

  • 16 Bonds don’t always go up.

    Stocks can trend for years while interest rates trend for decades.

  • 17 Learn from your mistakes.

    Failure can be a great learning experience but only if there is reflection on what went wrong.