Bruce is a well known value investor with concentrated portfolios. He labeled his fund as "Focused and Value Based." The following are my notes to this wonderful meeting. I was very appreciative of the discussion.
1. "Doesn't make sense to have greater than 10 or 20 positions. Diversification is insurance against ignorance."
2. Risk is the chance of permanent loss. There are two concepts of risk.
3. Various investment rules.
A. Rule 1 - don't lose
B. Always figure out how you can "die" in the investment. He mentioned an old country song, "tell me where I am going to die, and I won't go there." Always invert. Try to die in your investment and if you find a good way to die, try to avoid the investment.
C. Crowd is comfortable, but you will pay a high price for being with the consensus.
D. Institutions have a disadvantage in investing because they have an institutional imperative.
E. Don't have a herd mentality.
F. Emphasis on Free Cash Flow and not Fee Cash Flow. Free Cash Flow means "owner's earnings." Free Cash Flow is likened to the old corner grocery store. At the end of the period, how much is left in the register after all payments are made. That is Free Cash Flow.
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1. "Doesn't make sense to have greater than 10 or 20 positions. Diversification is insurance against ignorance."
2. Risk is the chance of permanent loss. There are two concepts of risk.
3. Various investment rules.
A. Rule 1 - don't lose
B. Always figure out how you can "die" in the investment. He mentioned an old country song, "tell me where I am going to die, and I won't go there." Always invert. Try to die in your investment and if you find a good way to die, try to avoid the investment.
C. Crowd is comfortable, but you will pay a high price for being with the consensus.
D. Institutions have a disadvantage in investing because they have an institutional imperative.
E. Don't have a herd mentality.
F. Emphasis on Free Cash Flow and not Fee Cash Flow. Free Cash Flow means "owner's earnings." Free Cash Flow is likened to the old corner grocery store. At the end of the period, how much is left in the register after all payments are made. That is Free Cash Flow.
Read the complete notes
Also check out:
