In this interview with Bloomberg, Prem Watsa admits to making numerous mistakes during his investing career. He acknowledges John Templeton’s point that even the best investors only get two out of three right. He finds this acceptable, emphasizing the need to learn from mistakes and understanding the inherent ambiguity of the investment business. Here’s an excerpt from the interview:
Host: Have there been investments that you regret?
Watsa: I was going to say thousands of them, but tons of them, tons of them yeah. So Mr Templeton, John Templeton, he was a mentor to us.
So John made this terrific statement, he said, “The investment business… if you get two out of three right you have one of the best track records”.
He said when he looks at his record, he got two out of three right over fifty years and he had one of the best track records in the mutual fund industry. We’ve got a ton of wrongs, ton of mistakes.
Host: Does it bother you?
Watsa: It bothers me some but I understand one out of three.
We need to learn from them. We try to figure out what the mistakes were. But it’s a fascinating business because there’s no right answer.
You buy something and then the President might go and expand and borrow too much money.
You thought he was a terrific guy but then he goes and expands. Or the industry dynamics change as we are having so many industries being affected by Amazon and other companies and so on.
It’s a fascinating business. I love it. Don’t plan to retire. Enjoy it!
You can watch the entire discussion here:
https://youtu.be/BW08lI8518A?si=wOLShmw6HO0op5IQ&t=194
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