"Good results will bring a manager more money to manage. If inflows are allowed to go unchecked, eventually more money will bring bad performance. Increased assets under management can shorten the list of potential investments large enough to make an impact, erode a manager's ability to be selective and agile; and encourage "style drift", under which a manager strays into strategies beyond his core competence in an effort to put money to work" Howard Marks
“While managing money successfully “While managing money successfully
"One question I always ask myself in appraising a business is
how I would like, assuming I had ample capital and skilled
personnel, to compete with it. I’d rather wrestle grizzlies than
compete with Mrs. B and her progeny. They buy brilliantly, they
operate at expense ratios competitors don’t even dream about, and
they then pass on to their customers much of the savings. It’s
the ideal business - one built upon exceptional value to the
customer that in turn translates into exceptional economics for
its owners." Warren Buffett
Book value is an accounting concept, recording the
accumulated financial input from both contributed capital and
retained earnings. Intrinsic business value is an economic
concept, estimating future cash output discounted to present
value. Book value tells you what has been put in; intrinsic
business value estimates what can be taken out.
An analogy will suggest the difference. Assume you spend
identical amounts putting each of two children through college.
The book value (measured by financial input) of each child’s
education would be the same. But the present value of the future
payoff (the intrinsic business value) might vary enormously -
from zero to many times the cost of the education. So, also, do
businesses having equal financial input end up with wide
variations in value.
At Berkshire, at the beginning of fiscal 1965 when the
present management took over, the $19.46 per share book value
considerably overstated intrinsic business value. All of that
book value consisted of textile assets that could not earn, on
average, anything close to an appropriate rate of return. In the
terms of our analogy, the investment in textile assets resembled
investment in a largely-wasted education. Warren Buffett
"From our empirical observations, it seems that some members of our species are immune to this call of the herd. They can go left when the rest of the tribe goes towards the right. Their attitude isn’t influenced by the behavior of the tribe. Their genetic code seems to not have the “tribal gene”. It’s difficult to evaluate what percentage of humans have this particularity but it’s a minority. And it’s probably those who eventually become creators (artists, scientists, writers, entrepreneurs, etc), as the act of creation requires the capacity to make something new and to forge a new path different from others. To create is to go where there was nothing before. Creating is the antonym of following." Francois Rochon
" Testing is best suited for left-brain-dominant students. It's much easier to test for sequential thinking and problem solving, recall, etc., than for right-brain attributes. For example, how do you test for intuition or artistry? So economics has become largely quantitative. Of course, modern portfolio theory (MPT) is the ultimate in the application of mathematics to what really is a soft science. So even though MPT is an important part of the CFA program and the curriculum in most graduate business schools Buffett and I consider it almost laughable. Yet it continues as core curriculum because that's what teachers have been taught to teach, and it's hard for this battleship to change direction. In a recent New York Times edition, Bob Schiller, with whom l've had communications, wrote that behavioral economics is the new frontier. Even though it's gaining currency at Harvard, Yale, and a number of other leading schools, it's going to be difficult to institutionalize because it's so intuitive. So l would love for schools to teach right-brain thinking and applications as well, but it won't be easy to quantifiably integrate it into the curriculum.
“I was an English major my first two years, I wanted to be an English professor. My first semester in my junior year I took a course in economics so I could read the newspaper because I wasn’t very good at it even though I was supposed to be an English major. I fell in love with the subject and crammed an economic major. I took 18 of my last 21 course were economics courses or something absurd like that. Then I wanted to be an economics professor. I also have a drop-out in my genes. I went to get my PHD at Michigan and I lasted a semester and a half and dropped out, and went to work in construction for six months” Stan Druckenmiller
"In the mid-60's, Wharton students had to have a non-business minor, and I satisfied the requirement by taking five courses in Japanese studies. These surprised me by becoming the highlight of my college career and contributing to my investment philosophy in a major way. Among the values prized in early Japanese culture was mujo. Mujo was defined classically for me as recognition of "the turning of the wheel of the law", implying acceptance of the inevitability of change, or rise and fall. This sense of accepting and 'going with' the environment and the changes that takes place there - rather than insisting that is stay the same and attempting to impose our will on it - was capture for me in a quotation from Lao-Tzu. "To be strong you have to be like water; if there are obstacles, it flows; if there is an obstacle, it stops; if a dam is broken, then it flows further; if a vessel is square, then it has a square form; if a vessel is round, then it has a round form; because it is so soft and flexible, it is the most necessary and strongest thing"" Howard Marks
In 1951 Soros earned a Bachelor of Science in philosophy and an MSc in philosophy in 1954, both from the London School of Economics.
Einhorn graduated from Cornell University with a B.A. in Government from the College of Arts and Sciences
After leaving the Navy, Robertson moved to New York City and worked for a time as a stockbroker for Kidder, Peabody & Co. At Kidder, he eventually headed the firm's asset management division (Webster Securities) before departing to move with his family to New Zealand for a year to write a novel. On his return, in 1980 Robertson launched Tiger Management with initial investments from friends and family
In 1965, Lynch graduated from Boston College where he studied history, psychology and philosophy. He served two years in the military before attending and graduating from the Wharton School at the University of Pennsylvania with a Master of Business Administration in 1968.
In 1964, Rogers graduated with a bachelor's degree in History from Yale University. He got his first job on Wall Street, at Dominick & Dominick.
In 1966, Rogers then acquired a second BA degree in Philosophy, Politics and Economics from the University of Oxford, as a member of Balliol College. He was the coxswain in 1966 for Oxford's victory in The Boat Race.
"If I didn't do what I do in my life I would want to be a journalist. I consider myself a journalist to some extent. I assign myself a story. I say is the Washington Post company worth $22 a share in 1973. I say is the BNSF railroad worth us paying $34b I assign myself a story. It's my working hypothesis that it is. But then I go looking for the facts and I try not to be selective about the facts that I use as input. So journalism, it's fascinating, I love it. Always observe the rule about not letting the hypothesis determine the story. You've got to learn about accounting, your've got to learn about how a business works if you're going to do business journalism. You can always get smarter." Warren Buffett
Leon Levy studied psychology at City College of New York
Paul Singer - BS in psychology from the University of Rochester and a JD from Harvard Law School
David Abrams graduated from University of Pennsylvania with a B.A. degree in History.
"Creativity is the power to connect the seemingly unconnected." William Plomer
“It’s imperative to be creative because a stock currently is selling at a price that the average investor thinks is the right price, so you have to come to a decision that that price is wrong and that the price deserves to sell, the stock deserves to sell at a higher price for some reason. That reasoning is creative thinking because other people aren’t thinking that way because if other people were thinking that way, the stock would be at a higher price. Every idea is a creative idea.” Ed Wachenheim
“Having imagination ,feel, a gut sense of what could be that isn’t now is very important, to prepare for something that the price doesn’t tell you” John Burbank