risk
General Information

Andy Redleaf

“In the real economy we see all the time people being paid for hard work, for perseverance, for insight, and for experience. It is easiest to see this by starting with some extreme cases. There are many great heroes among the great entrepreneurs. It is almost impossible to think of one who got paid for taking risk. The […]

Charlie Munger
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Charlie Munger

“I am a biography nut myself, and I think when you’re trying to teach the great concepts that work, it helps to tie them into the lives and personal ties of the people who developed them. I think that you learn economics better if you make Adam Smith your friend. That sounds funny, making friends […]

Correlation
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Excessive Correlation

At times certain stocks may become correlated and all move in the same direction offsetting the benefits of diversification.  Correlations can “go to 1” in difficult market conditions.  Things you expect to be uncorrelated may become correlated due to crowding, index implications, money flows, economic factors or geographic events.  There is little protection in a bear market […]

History
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William N. Goetzmann

History is important to the study of financial bubbles precisely because they are extremely rare events, but history can be misleading. The rarity of bubbles in the historical record makes the sample size for inference small. Restricting attention to crashes that followed a large increase in market level makes negative historical outcomes salient. In this […]

Mario Gabelli
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Mario Gabelli

“If a CFO doesn’t reach out to the investment community, I can just walk. I don’t need to buy every stock. If the business is truly a great one, we will tolerate management inadequacies for awhile. Again, we believe that an average management running an above average franchise will do an above average job. An […]

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