Category: Notes

I learn while I think when I write it out. Some of the things I think I think, I find don’t make any sense when I start tying to write them down and explain them to people. You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more.

– Warren Buffett

We must recognize, however, that intrinsic value is an elusive concept. In general terms it is understood to be that value which is justified by the facts, e.g. the assets, earnings, dividends, definite prospects, as distinct, let us say, from market quotations established by artificial manipulation or distorted by psychological excesses. But it is a great mistake to imagine that intrinsic value is as definite and as determinable as is the market price.

– Benjamin Graham, Security Analysis

It will be necessary to resist the tendency to render easy that which cannot become easy without being distorted.

– Antonio Gramsci

Only when nobody knows anything does a creative industry bet on its creators. Golden ages come to an end when everybody knows something.

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It is easy to confuse the capability to make precise forecasts with the ability to make accurate ones.

– Seth Klarman

The minute you start using fancy technology, there are so many steps from the raw data to the conclusion that there is plenty of scope for unintended massaging of the data. Methodology is important but your research should be concept driven – not methodology driven. Lastly, using sophisticated techniques (especially if computers are involved) lulls you into a false sense of thinking you have done something “scientific”. The use of hi-tech is – to quote Peter Medawar – seen, unfortunately, as a sign of intellectual manhood.

– VS Ramachandran

All you had to do to make money in the crisis – was have money to spend and the nerve to spend to it. You didn’t need caution, conservatism, risk control, patience selectivity, discipline, any of those things. All you needed was money and nerve. But not all the time, because sometime money and nerve will get you killed. One of the keys to investing is to know which is which.

– Howard Marks

Make your position size more a function of not how much you can make, but really how much you can lose. So manage your position based on your downward loss perspective not your upward potential.

– James Dinan

A war of attrition is one where two sides essentially grind against each other and the winner is the one which lasts longest. A decisive battle is one where a conflict is won through a single, acute encounter where, due to either demoralizing or circumstance reasons, one side gives up. It’s the knock-out punch vs. the fight to exhaustion.

When applying this dichotomy to competition, we need to be careful about who we define as competitors.

– Horace Dediu