About Watheeqa Investor Digest
Some of the world's renowned investors when asked what makes them great - the unusual but common answer is "We read and think". The main goal of WID is to bring our clients the best interviews, articles, research and thought provoking material that we come across, read and thoroughly enjoy. Our collections are old, nevertheless timeless treasures while some are recent and highly recommended.
We thought, why not put these fascinating gems together each month and share the collective wisdom of what we read. WID is our contribution from that inspiring idea. We truly believe - what you read and how much of that you internalize, reflects who you are. We suggest you archive our premium collections, read them and re-read them.
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Watheeqa Investor Digest - July 2010
Read and grow rich
Andrew Fienberg writes - When my 7-year-old daughter, Julia, asked me what I do all day, I told her that I spend most of my time reading. Julia, a book fiend, brightened and said, "They pay you for that?" Yes, they do -- indirectly. The best investors read all the time. As Berkshire Hathaway vice-chairman Charlie Munger has said in assessing the success of his sidekick, Warren Buffett: "If you want to be an outlier in achievement, just sit on your ass and read most of your life."
Source: www.kiplinger.com WID
Dads
Thomas J. Barrack Jr concludes on Father's Day - My personal view is that the economic situation in the world is going to get much worse before it gets better. Eventually, inflation will return and real estate will become dear. When will this chaos conclude? I have no idea. Nor do we have any control over their determinants.
However, what I am sure of is that concentrating on the basics of what we all learned from our dads integrity, commitment, long line relationships, gratitude and basic kindness and manners is a sanctuary from tumultuousness. Additionally, we can actually control these things! Now is a moment to concentrate on relationships not information. There is only disinformation and disinformation stimulates fear and trepidation. We will not be disappointed if we reset our expectations to adjust with reality. This is a time for us to work harder for less and return to earning a living from what we do, not what we invest in. Kindness and courtesy generates generosity of heart, which in turn becomes the magical elixir for the spirit.
Dad's formula for never being disappointed was simple Have no expectations of others conduct as a condition to your own and you will never be disappointed.Simply do the right thing!!
Source: www.colonyinc.com WID
My teacher; Charlie Munger
When Charlie thinks about things, he starts by inverting. To understand how to be happy in life, Charlie will study how to make life miserable; to examine how business become big and strong, Charlie first studies how businesses decline and die; most people care more about how to succeed in the stock market, Charlie is most concerned about why most have failed in the stock market. His way of thinking comes from the saying in the farmer's philosophy: I want to know is where I'm going to die, so I will never go there. Charlie constantly collects and researches the notable failures in each and every type of people, business, government, and academia, and arranges the causes of failures into a decision-making checklist for making the right decisions. Because of this, he has avoided major mistakes in his decision making in his life and in his career.
Source: Enoch Ko's Blog WID
I Want to Break Free
In my view, we need to return to a simpler, but more holistic, approach to investing. Clients should liaise with their managers to set a "realistic" real return target (recognizing that available returns are a function of the opportunity set, not a function of the needs of the fund). After all, the aim of investing must surely be
"maximum real returns after tax" as Sir John Templeton observed long ago. None but a few very lucky fund managers get to retire on relative performance.
Source: www.gmo.com WID
Seth Klarman talks to Jason Zweig
The critical thing to understand is that securities are not pieces of paper that fluctuate in price tick by tick like Cramer says on TV, instead they are in fact claims on earnings or assets of businesses. If you are afraid a security will go lower then you worry about what clients, or partners, will think. If you have conviction in your analysis, you will hold and buy more. So what do we do to give us conviction? 1.) Find compelling bargains, not slight bargains. 2.) Test everything with sensitivity analyses. 3.) Prepare to be wrong. It's not courage, it's Arrogance, when you buy something, you're saying you're smarter than everyone else. We realize we have lots of smart competition and temper our arrogance with humility to realize that many things could go wrong. Our own confidence matters, and we're highly disciplined buyers and sellers to avoid round trips and take advantage of short term sell offs.