During a recent Q&A, Vitaliy Katsenelson was asked about how he avoids confirmation bias, Katsenelson responded, “Confirmation bias is something very natural to all of us… when I look at a stock… I try to talk to as many people about this as possible… and they start giving me bullet points—that actually matters a lot to me. Because now I got a gift. I got a thesis to disprove.”
That pursuit of truth shapes everything. “As an investor, my goal is to discover the truth before time does.”
When asked how he deals with the opportunity cost of time, he said, “We put a fair value on the company four, five, or longer years out and then we discount it back… If it takes five years for the market to revalue the company and it’s not growing earnings, I have to buy it so much cheaper.”
Katsenelson reflected on how his approach has matured: “When I started investing I feel like actually… every value investor goes through this transition… you start buying these companies that look very cheap… statistically cheap.” But experience changed that. “After they lose a lot of money and make a lot of mistakes… you kind of graduate to adding qualitative factors.” Now, he says, “Life is too short for me to own… kind of low-quality companies.”
He illustrated how he evaluates unknown industries with a sci-fi analogy. “When I’m analyzing industries I’ve analyzed before, this is me reading John Grisham. When I look at an industry I know nothing about, it’s like I have to build my own world… Where is the value in this system? Who has more bargaining power.”
He’s also adapted to new realities. “Today we are investing between the tweets—literally… One modification we made: we reduced position sizes. I don’t want to blow up on one of those tweets.”
And yes, even Katsenelson has come around on gold: “If I was on this podium five or ten years ago, I would have told you all the reasons not to own gold… But I think the world has changed… So, it’s not irrational to own gold.”
In Vitaliy’s world, value investing isn’t just numbers—it’s narratives, networks, nuance, and knowing that sometimes, “I have to work harder.”
You can watch the entire presentation here:
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