ASYMMETRIC TRADES

“The asymmetric payoff structure (you can make far more if you’re right about a stock than you can lose if you’re wrong) is the fundamental attraction of investing in equity markets.” James Anderson

“Although our views are dogmatic, we build positions with asymmetry through optionality, so that even if we’re wrong, we have a defined downside.” Kyle Bass

“We seek asymmetry in every investment opportunity by measuring the polar attributes of our margin of safety with compounding return possibilities.” Christopher Begg

“My best and favorite investments come from a deep understanding of the importance of asymmetry, that is, by understanding the potential risk and reward, and making sure that the reward overwhelming compensates for the risk.” Bill Ackman

“Return profiles that are asymmetrical (small possible loss, big possible gain) are better than symmetrical risk/rewards.” Paul Singer

“‘Asymmetry’ is a concept I’ve been conscious of for decades and consider more important with every passing year. It’s my word for the essence of investment excellence and a standard against which investors should be measured.” Howard Marks

“Some of the best investments that we’ve ever done – I think most people have ever done – aren’t necessarily attractive in their own right. They’re attractive because the upside versus the downside is compelling, rather than being right that earnings would come in a certain way. Hunting for an extremely mispriced risk and return scenario takes skill and determination.” Seth Klarman

“I can be wrong more often than I am right, so long as the leverage on my correct judgments compensates for my mistakes.” Leon Levy

“We love trades that appear to be approaching limits – trades that are so close to their absolute limits that they have tremendous asymmetry. Some examples are CDS protection on European banks in 2007 for three basis points and CDS on the ABX for nine basis points.” Jamie Mai

“The goal in investing is asymmetry: to expose yourself to return in a way that doesn’t expose you commensurately to risk, and to participate in gains when the market rises to a greater extent than you participate in losses when it falls. But that doesn’t mean the avoidance of all losses is a reasonable objective. Take another look at the goal of asymmetry set out above: it talks about achieving a preponderance of gain over loss, not avoiding all chance of loss.” Howard Marks

“Be aggressive when you find highly asymmetric risk/reward opportunities. There is no better feeling in the investment business than being early, being big, and being right!” Chase Coleman

“If you make more money when you are right than you are hurt when you are wrong, then you will benefit, in the long run, from volatility [and the reverse].” Nassim Taleb

“It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.” Stan Druckenmiller

"We tend to triangulate valuations using a number of different methodoligies that give us a range of asymmetric return expectations appropriate for the opportunity." Christopher Begg

“Listen, business is easy. If you’ve got a low downside and a big upside, you go do it. If you’ve got a big downside and a small upside, you run away." Sam Zell

"We’re trying to create a portfolio of highly skewed favorable risk/return opportunities, focusing on situations that have upside potential that is at least three times the downside... It’s all about setting up those asymmetric bets and getting more of them right than wrong." Allan Fournier

"Our fund is looking for asymmetric investments, ones where we can make a lot more than we can lose." Boaz Weinstein

"Analyze risk/reward of every decision and seek asymmetrical returns. If the upside is $2, and the downside is $10, and you figure there is a 98% chance of the upside, do it." James Dinan

"We are looking for these types of low risk opportunities, where our lens can detect asymmetric risk/reward." Steve Major

"We try to find really good setups, where you have to be a little bit right to make a lot of money and a lot wrong to lose a little bit of money." Curtis Macnguyen

"The Holy Grail of Investing is finding a situation with an asymmetric upside/downside ratio." Mark Unferth

“Exploiting asymmetry in the market, taking advantage of stocks with unlimited upside but limited downside, is one of the most important tenets of successful investing.” Stephen Paice

"I have a good sense that I will want to make sure downsides are pretty neutral, and upsides pretty large before we would do anything." Mohnish Pabrai

"I look for opportunities with tremendously skewed reward-risk opportunities." Paul Tudor Jones

"Asymmetry — better performance on the upside than on the downside relative to what your style alone would produce — should be every investor’s goal." Howard Marks

"We don't sell short, but we do access instruments that allow us to make small bets (with known and finite downside), that have the potential for asymmetrical payoffs. While carefully managing risk, an investor can profit from an overvalued asset that becomes fairly valued." Frank Martin

"The search for asymmetric returns has and always will be our mission." Christopher Begg