Business Insider has a write-up on the latest Baupost quarterly letter. There are several great quotes in the article on the Dotcom bubble, doing nothing, the importance of cash, and a little bit about their process.
I pulled a couple quotes below that describe what it was like being a value investor during the Dotcom crash.
It turns out buying a dollar for 50 cents is a lot harder than it seems. Every day we added to these positions, thinking we were getting an even better bargain than the day before, only to wake up and watch prices drop further. Other respected investors would often comment about how ‘value tech’ was a ‘value trap,’ best to be avoided. It was as if the market was having a ‘going out of business’ sale and we happened to be the only customer who showed up. While both exhilarating and painful at the same time, what I remember most vividly is exhaustion. After countless late nights at the office, I would head home, collapse on my couch and stare at the ceiling. I was unable to read, watch television, or fall asleep. All I could do was worry about what we might have missed in our analysis.
Investing in tide markets takes chutzpah. To do so effectively, you need to fly in the face of public opinion, you have to fight normal human emotions, and you have to be prepared to double down on your bets when your conviction is most in question. As Benjamin Graham once said, ‘The investor’s chief problem and even his worst enemy is likely to be himself.’
Investing is never easy, even when the market is ripe for value investors.
- The Power of Nudges, for Good and Bad – R. Thaler
- Embrace Your Enemies – M. Housel
- 3 Timeless Rules for Making Tough Decisions – HBR
- Genes, Experience Affect Choices – L. Swedroe
- What’s Uber Worth? Probably Not What Your Fund Company Says – J. Rekenthaler
- What Looks ‘Good and Cheap’ Today? – W. Bernstein
- That Time I Tried to Buy an Actual Barrel of Crude Oil – Bloomberg
- Dealbook Conference 2015 Videos
- Fortune Global Forum 2015 Videos