Currently, the arguments are well formatted outlining the bleakness of the prospects facing us over the next decade, as are those which foretell a greater than expected growth in our GDP starting almost immediately. We have no opinion on the merits of all these arguments, as we find ourselves easily swayed by both views at times.
In just a few short months the average investor has gone from being afraid that he would lose everything to being afraid that he is going to miss out. I firmly believe that this fear is misplaced, and that while we did avert Armageddon, we are not yet in the fullness of the sun. Today, we hold more cash reserves than at any time in our history, largely because we believe the road ahead will be bumpy. We are prepared to miss some rallies, rather than to expose our capital to greater losses. We believe there are many great investment opportunities now, but allow that the perception of risk is higher because the consequences of risk taking just came home to roost!
So, here we are, January 2010. The playing field is well described. Our problems at home are enormous, and our commitments outside the U.S. are significant, as well as draining on both resources and attitudes. We think it is impossible to have experienced 2008 and the first quarter of 2009 and not have been affected by it. We have seen up close the unintended consequences of risk taking by others. We have committed modest amounts of capital since the market bottomed in March, and have taken larger amounts of capital off the table. We think it is imprudent to be fearful of missing out on the rally.
Read the complete letter
In just a few short months the average investor has gone from being afraid that he would lose everything to being afraid that he is going to miss out. I firmly believe that this fear is misplaced, and that while we did avert Armageddon, we are not yet in the fullness of the sun. Today, we hold more cash reserves than at any time in our history, largely because we believe the road ahead will be bumpy. We are prepared to miss some rallies, rather than to expose our capital to greater losses. We believe there are many great investment opportunities now, but allow that the perception of risk is higher because the consequences of risk taking just came home to roost!
So, here we are, January 2010. The playing field is well described. Our problems at home are enormous, and our commitments outside the U.S. are significant, as well as draining on both resources and attitudes. We think it is impossible to have experienced 2008 and the first quarter of 2009 and not have been affected by it. We have seen up close the unintended consequences of risk taking by others. We have committed modest amounts of capital since the market bottomed in March, and have taken larger amounts of capital off the table. We think it is imprudent to be fearful of missing out on the rally.
Read the complete letter
