In their latest Annual Letter, First Eagle Investments provide some investing lessons from Thucydides from the late fifth century BC. Here’s an excerpt from the letter:
We often find ourselves returning to The History of the Peloponnesian War by Greek author Thucydides from the late fifth century BC.
Thuycdides’s insights about the Athenians and the Spartans have proved prescient throughout history, today illustrating the rivalry between the US and China just as they did the rivalry between Germany and the UK a century ago.
Beyond its historical context, the book is full of valuable insights into the human condition; among the most resonant to us as investors is his analysis of the mistakes people make when confronted with uncertainty. They act with haste. They act with hubris. They act with dogma. And the outcome of these actions typically is suboptimal.
At First Eagle, we try to embody the philosophical inverse of these behaviors. Instead of haste, we exercise patience, maintaining low turnover rates and allowing time for our investment theses to play out.
Instead of hubris, we embrace humility, constructing broadly diversified portfolios we expect should perform across various world-states and investing capital only when we can do so with a “margin of safety.” Instead of dogma, we encourage flexibility, letting the character of a business dictate its potential appeal as an investment and making the value opportunity set larger in the process.
You can read the entire Annual Letter here:
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