David Abrams, Founder of Abrams Capital and former Baupost Group investor, seldom speaks publicly. In a rare interview with Value Investing with Legends, he shared key principles behind his investing strategy. Investing begins with a simple but critical question: “What’s the risk?” As David Abrams explains, the first step is understanding … Read More
Warren Buffett: Why Concentration Beats Diversification
In his 1993 Berkshire Hathaway Annual Letter, Warren Buffett explained how he and Charlie Munger figured out early that trying to make dozens of brilliant investment decisions is a losing battle. As Buffett puts it, “Charlie and I decided long ago that in an investment lifetime, it’s just too hard … Read More
Luck vs. Skill in Investing: Why There Are No Gurus, Only Cycles
During their recent episode, Taylor, Carlisle, and Michael Gayed discussed Luck vs. Skill in Investing: Why There Are No Gurus, Only Cycles. Here’s an excerpt from the episode: Tobias: Self abnegnation. I don’t mind that as a strategy. Michael: Well, I’ll tell you something. Actually, I’m half joking about it, … Read More
Howard Marks: Is Now the Time to Exit the Market?
In this interview with The Market, Howard Marks suggests that stocks are currently overvalued by 20-30%, with a 60-65% probability the market will be lower in a year. However, there’s still a 35-40% chance it could rise, highlighting uncertainty. While a downward tendency exists, it’s not a certainty, and valuations … Read More
Mohnish Pabrai: How the Kelly Formula Can Improve Your Financial Strategy
In his book The Dhandho Investor, Mohnish Pabrai discusses the Kelly Formula, a strategy for determining the optimal fraction of a bankroll to bet on favorable odds. Using examples, Pabrai illustrates how to calculate the edge (expected value) and apply the formula to maximize returns while managing risk. For instance, … Read More
Cliff Asness: Investors Should Avoid These Two Extremes
In this interview with the Insightful Investor, Cliff Asness discusses the challenge of evaluating an investment strategy during difficult periods. He warns against two extremes: abandoning a strategy too quickly due to short-term losses or stubbornly refusing to adapt when necessary. He highlights Warren Buffett’s ability to stick to his … Read More
Howard Marks on Smart vs. Lucky: Lessons for Investors
In this Insight Conversation with Annie Duke, Howard Marks reflects on a key lesson he learned from his early studies in investment: the quality of a decision cannot be judged by its outcome. Success can result from poor decisions, and many investors are often “right for the wrong reasons.” He … Read More
Bill Nygren: How To Increase Your Odds Of Success
In this interview with Value Investing With Legends, Bill Nygren explains his investing strategy in simple terms. His team typically invests around 2% in each stock and avoids buying if the stock exceeds 3%. If a stock grows beyond 4%, they trim their holdings. They focus on managing risks sensibly … Read More
The Risks of Shorting MSTR and Long Bitcoin
During their recent episode, Taylor, Carlisle, and Jason Buck discussed The Risks of Shorting MSTR and Long Bitcoin. Here’s an excerpt from the episode: Jason: Well, the other thing we were talking about before, that I would caution everybody on and that’s what I’ve seen too much of on Twitter, … Read More
Mohnish Pabrai: Aim for a Home Run, Settle for Breaking Even
In this Q&A session with MBA students at Columbia Business School, Mohnish Pabrai discusses the importance of assessing potential risks and outcomes before making investments. He acknowledges that all businesses carry some level of uncertainty and a small probability of failure. Pabrai views investing as a game of probabilities, striving … Read More
Warren Buffett: Reaching For Yield Is Really Stupid, But It’s Very Human
In this interview with CNBC, Warren Buffett discusses the importance of aligning consumption with income rather than taking excessive risks to increase returns. He criticizes “reaching for yield,” calling it a dangerous and human tendency, as individuals often seek higher returns despite the risks. Instead, he advises adapting to lower … Read More
Ray Dalio’s Investment Wisdom: Humility, Triangulation, and Diversification
In this interview with RWH, Ray Dalio discusses the importance of humility and caution when making decisions in unfamiliar areas, using China as an example. He relies on extensive experience, starting in 1984, and insights from highly knowledgeable and trustworthy individuals to triangulate information and form conclusions. Dalio prioritizes diversification, … Read More