Money and Finance
- Dhandho Holdings Makes Acquisition
Mohnish Pabrai's foray into the insurance business... Link to: Dhandho Holdings To Acquire Louisiana-Based Stonetrust Commercial Mutual Insurance Holding Company And Related Companies "Stonetrust is a wonderful business with an exceptional management...
- How Much Research And Analysis Are Sufficient?
From Seth Klarman, via Margin of Safety:How Much Research and Analysis Are Sufficient? Some investors insist on trying to obtain perfect knowledge about their impending investments, researching companies until they think they know everything there...
- Seth Klarman Quote
From Margin of Safety(Source):Some investors insist on trying to obtain perfect knowledge about their impending investments, researching companies until they think they know everything there is to know about them. They study the industry and the competition,...
- The Absolute Return Letter - December 2010: The Dirty Dozen
In the world of finance, risk is essentially the probability of an investment’s actual return being different from the expected return. As most of us are not overly concerned about actual returns being higher than expected, it is fair to say that in...
- Value Investing Congress - Speaker Picks
All of the presented ideas are located on the Value Investing Congress Blog. Here's a couple of them:-Sellers and Fasciani presented the case for Vulcan Materials (VMC, $66):• Demand for aggregate materials (asphalt related) will grow as US infrastructure...
Money and Finance
Whitney Tilson: Investors will miss out if they confuse uncertainty with risk
Dealing with uncertainty is always a key challenge for investors. But dealing with uncertainty doesn’t mean avoiding it – on the contrary, it is often fuzziness about a company’s future that creates the type of opportunity bargain-hunting investors cherish.
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Wall Street in the main hates uncertainty, which manifests itself in depressed share prices of companies whose prospects lack “visibility.” But where the market can err is in confusing uncertainty with risk. Just because a company’s future is highly uncertain doesn’t mean an investment in it is risky. In fact, some of the best potential investments are highly uncertain, but have little risk of permanent capital loss. As hedge-fund manager Mohnish Pabrai describes it in his book, The Dhandho Investor: “Heads, I win; tails, I don’t lose much.”
Wall Street in the main hates uncertainty, which manifests itself in depressed share prices of companies whose prospects lack “visibility.” But where the market can err is in confusing uncertainty with risk. Just because a company’s future is highly uncertain doesn’t mean an investment in it is risky. In fact, some of the best potential investments are highly uncertain, but have little risk of permanent capital loss. As hedge-fund manager Mohnish Pabrai describes it in his book, The Dhandho Investor: “Heads, I win; tails, I don’t lose much.”
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Related Book: The Dhandho Investor: The Low - Risk Value Method to High Returns
- Dhandho Holdings Makes Acquisition
Mohnish Pabrai's foray into the insurance business... Link to: Dhandho Holdings To Acquire Louisiana-Based Stonetrust Commercial Mutual Insurance Holding Company And Related Companies "Stonetrust is a wonderful business with an exceptional management...
- How Much Research And Analysis Are Sufficient?
From Seth Klarman, via Margin of Safety:How Much Research and Analysis Are Sufficient? Some investors insist on trying to obtain perfect knowledge about their impending investments, researching companies until they think they know everything there...
- Seth Klarman Quote
From Margin of Safety(Source):Some investors insist on trying to obtain perfect knowledge about their impending investments, researching companies until they think they know everything there is to know about them. They study the industry and the competition,...
- The Absolute Return Letter - December 2010: The Dirty Dozen
In the world of finance, risk is essentially the probability of an investment’s actual return being different from the expected return. As most of us are not overly concerned about actual returns being higher than expected, it is fair to say that in...
- Value Investing Congress - Speaker Picks
All of the presented ideas are located on the Value Investing Congress Blog. Here's a couple of them:-Sellers and Fasciani presented the case for Vulcan Materials (VMC, $66):• Demand for aggregate materials (asphalt related) will grow as US infrastructure...