Sorry about that folks. I have been on vacation for two weeks and working on plans for two new sites. In the meantime, we will return to our regular schedule postings. Also, if you emailed me, I will eventually get back to you, but wading through the emails is going to take a few nights.
Read more...Last week Seth Klarman spoke at the CFA Institute in Boston. Below are 2 sets of notes. These are PURE GOLD. For more Seth Klarman, please see our Lesson from Seth Klarman series
We are big fans of Oaktree's Howard Marks. If you have not read his most recent letter, you really have to read it here: Howard Marks on Risk.
For about a year, I’ve been sharing my realization that there are two main risks in the investment world: the risk of losing money and the risk of missing opportunity. You can completely avoid one or the other, or you can compromise between the two, but you can’t eliminate both. One of the prominent features of investor psychology is that few people are able to (a) always balance the two risks or (b) emphasize the right one at the right time. Rather, at the extremes they usually obsess about the wrong one . . . and in so doing make the other the one deserving attention.
But when people get excited about the prospect of easy money – even if from assets or investment strategies that have become far too popular, turning into overpriced manias – they frequently drop their risk aversion and adopt risk tolerance instead. Thus they swarm into the investment du jour without concern for its elevated price and risk. This behavior should constitute an important warning flag for prudent investors.In the same way that expanded risk tolerance accompanies appreciated asset prices and contributes to the risk of loss, so does risk aversion tend to rise in times of depressed prices, increasing the risk of missed opportunity. When people refuse to buy assets regardless of their low prices, they miss out on the best, lowest-risk returns of the cycle.
I am putting out a request for two people that would like to help me build out a new blog (adding a fourth to our family) on post re-org equities. In addition, I am also putting out a request for one person that would like to help me start a blog on Walter Schloss and his tenets on value investing.
While not specific to distressed debt investing, we here enjoy reading thoughtful commentary on value investing. Below are notes, courtesy of The Innoculated Investor on the most recent Value Investing Congress. Great read. Enjoy!
