Thursday, June 18, 2015

Today's Investing for Survival

 Investing for Survival

            12 things I learned from David Tepper: #6   

6. “For better or worse we’re a herd leader. We’re at the front of the pack. We are one of the first movers. First movers are interesting; you get to the good grass first, or sometimes the lion eats you.”
To outperform the market you must be contrarian, and you must be right about that contrarian view often enough so that the financial math works. But there is big risk and uncertainty in this approach. The good news is that because most people would rather fail conventionally than succeed unconventionally assets can sometime be mispriced. Howard Marks, again, is on the mark: “Non-consensus ideas have to be lonely. By definition, non-consensus ideas that are popular, widely held or intuitively obvious are an oxymoron. Thus such ideas are uncomfortable; non-conformists don’t enjoy the warmth that comes with being at the center of the herd. Further, unconventional ideas often appear imprudent. The popular definition of “prudent” – especially in the investment world – is often twisted into ‘what everyone does.’”
Bonus: don’t do what you love (short):http://www.pragcap.com/dont-do-what-you-love

No comments:

Post a Comment