September 17, 2018

Long term investing is complicated

Doug Kass shares some of his investing wisdoms learnt over the years in a recent article in RealInvestmentAdvice.

"Value is subjective and its definition is liable to change. (see Valeant Pharmaceuticals and more recently the decline in the popularity of Micron (MU) and Intel (INTC) shares!)

History undoubtedly teaches lessons about investment but it does not say which lesson to apply when.

Investors are challenged by orthodoxy and consensus… or as I like to describe, as “group stink.” Many of the business media are complicit in that it delivers predominantly bullish views (optimism “sells”) – sometimes provided by rigorous participants, but most often by those that deliver a simplistic view of Mr. Market (and usually have their own service to sell).

Let’s not forget that pride goeth before fall – also publicity handshakes and celebrity. Nor shall we forget Theranos and maybe even Tesla.

Many perma bullish “talking heads” possess a silly (and much quoted) view that bearish market analysis rationale always sounds superior to the bullish case. This is a common and much repeated argument that holds little weight.

Always stick to your process and do not deviate from your risk appetite and profile."