Process Over Outcome | Portfolio Management Jar
Posts Tagged ‘Process Over Outcome’
Many moons ago, we shared with you this matrix highlighting the importance of focusing on process over outcome. In every investor’s lifetime, there will inevitably be one or more instances of “bad breaks” – when the investment process was solid, but the outcome was nonetheless bad. If that has ever happened to you, then […]
It’s that time of year – calendar year 2014 draws to an end. For one’s trackrecord, there’s particular emphasis on annual calendar year returns. Convention dictates that the annual return period fall between January 1st and December 31st, although there is no particular rhyme or reason behind this convention (e.g., why not April 1st to […]
Following up our recent article on selectivity standards in an upward moving market, below are some comforting words (and/or coping advice) from Mariko Gordon of Daruma Capital derived from her October 2013 Newsletter. “My ruminations on regret are of the bull market variety. Whereas bear markets make me regret owning every single stock in the […]
Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 14 “The Most Important Thing Is…Knowing What You Don’t Know” Mistakes, Sizing, Diversification, Leverage, Opportunity Cost “…the biggest problems tend to arise when investors forget about the difference between probability and outcome – that is, when […]
Consequences of Contrarian Actions
Below are excerpts from a speech Bob Rodriguez of First Pacific Advisors gave in May 2009. Quite a few interesting lessons derived from his previous trials and tribulations in dealing with clients and redemptions during periods of contrarian actions and underperformance. Psychology “I believe I have found success because I have been deeply aware of […]
Mind of an Achiever
In the competitive world of investing, each of us should constantly be seeking out competitive advantages. Personally, I believe that a certain degree of competitive advantage can be found in the cross-pollination of different schools of investment thought. Many in the value school often deride trading strategies, but they cannot deny the existence of those […]
Montier & Mauboussin: Process Over Outcome
James Montier’s Value Investing: Tools and Techniques for Intelligent Investment is a book I often recommend to others – Montier does a wonderful job of pulling together a range of topics related value investing. Below are excerpts from Chapter 16 titled “Process not Outcomes: Gambling, Sport and Investment.” Montier derived much of the content below […]
Readers know that I’m a fan of Mariko Gordon of Daruma Capital. Below is an excerpt from her recent March 2013 Letter. Although she is referring specifically to equities, I think her comments are applicable to all portfolio assets. Lao Tzu wrote that “He who knows others is wise; he who knows himself is enlightened.” This […]
Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 10 “The Most Important Thing Is…Combating Negative Influences” Mistakes, Portfolio Management, Psychology “Why do mistakes occur? Because investing is an action undertaken by human beings, most of whom are at the mercy of their psyches and […]
Continuation of portfolio management highlights from Howard Marks’ book, The Most Important Thing: Uncommon Sense for the Thoughtful Investor, Chapter 7 “The Most Important Thing Is…Recognizing Risk” Risk, Capital Preservation, Compounding “…Warren Buffett, Peter Lynch, Bill Miller and Julian Robertson. In general their records are remarkable because of their decades of consistency and absence of disasters, […]
Continuation of our series on portfolio management and the Buffett Partnership Letters, please see our previous articles for more details. Trackrecord, Compounding, Duration, Special Situations, Time Management “A disadvantage of this business is that it does not possess momentum to any significant degree. If General Motors accounts for 54% of domestic new car registrations in 1965, it […]