Having a tech investing methodology with a strict set of rules doesn’t mean your approach can’t change when the market changes. As the availability of easy cheap capital dries up, our “revenue at all costs” mantra is shifting to “revenue at reasonable costs.” Spending $1.5 to acquire $1 in revenues won’t be sustainable, so we […]
Investor psychology is a fascinating topic because it shows precisely why 95% of humans can’t beat the market, even when they dedicate their entire lives to that pursuit. Imagine that. A portfolio manager spends their entire life pretending to be someone they’re not. That’s what actors do, but at least they end up with the […]
Mark Twain once said that it’s easier to fool people than to convince them that they’ve been fooled. Perhaps that’s because of loss aversion, a psychological concept where we feel the pain of losses twice as hard as the joy of winning. In the investment world, this translates into investors who refuse to acknowledge their […]
You don’t need a high school education to understand how supply and demand works. It’s intuitive. If many people desire a product with a limited supply, then the price typically goes up. At some point, demand will fall because the product becomes too expensive and people turn to substitutes. But supply and demand theory falls […]
You’ll never buy that casa on the playa by cherry-picking the right stonk. When 95% of professional money managers can’t beat a simple benchmark, your Saturday afternoon due diligence sessions aren’t going to put you in the top 5% that can. Accumulating wealth is a slow boring process that takes lots of time and sacrifice. […]
Certain behaviors give away inexperienced investors in much the same way a poker player gives off tells. For example, we’ll often hear readers talk about how a certain price point is “a great buy” for a particular stock. Trying to call the bottom for any given stock is pointless. A February 14th article on Seeking […]
There’s no such thing as bad publicity. Sometimes what’s perceived as a public relations fiasco is actually a clever way to get free eyeballs on your product. Call someone a retard on a conference call and the Twitter police will quickly put you in your place by telling the entire world about what you’ve been […]
If you’re managing other people’s money, don’t assume everyone measures their time horizon in decades. People often panic when they see their account balances plummet as the market undergoes some turmoil. In the investment management world, the term high-water mark describes the highest value a portfolio has achieved. The term drawdown describes the difference between the […]
One in four people who attempts to climb K2 dies during the best of times. So, what sort of giant brass cojones would you need to climb it in the winter? That’s just what a team of ten Sherpas did one year ago today, the first winter ascent of K2. Here’s a brief quip from […]
Our end-of-the-year portfolio review meeting ran into a brick wall almost immediately when one of our MBAs sparked up some Slurricane creeper that could have killed Elvis. Nonetheless, we powered our way through that hurdle, and started down the path of thinking more like portfolio managers and less like stoned MBAs. As risk-averse investors, we’re […]