Francis Chou: The Difference Between Having Conviction & Being Reckless

In his latest presentation to the Ivey Value Investing Classes, Francis Chou discusses his value investing strategy and the difference between having conviction and being reckless. Here’s an excerpt from the presentation:

Chou: One advantage I had was because I’ve been in the market, been in the bond market and stock market for over forty years, so I’ve seen these type of scenarios before.

So when it went down I just went for it. There was no fear. So sometimes you have to go through it a few times to know things will bounce back. As long as you buy them below what it is really worth.

So there’s a fine line between having conviction and you know you’re right and the other one is just being reckless. So there’s a fine line and if you know your stuff, know your valuation, then that is investing.

But if you don’t know your valuation and you buy them and they are like if you think they’re cheap and then that is being reckless.

So you really have to do your work and make sure you know your valuation accurately.

You can watch the entire discussion here: