Markets are not efficient; they are reflexive. Participant perceptions and market fundamentals influence each other in a...
We search for patterns in data that are predictive of future prices. The patterns have to be statistically significant a...
Asset allocation is the most important investment decision. How you divide your portfolio among stocks, bonds, and alter...
The most important thing is to do the right thing, then do things right. Many people focus on efficiency while doing the...
Time is the most important factor in trading. Markets move in cycles, and understanding these time cycles allows you to ...
Go long the best companies in an industry and short the worst. This hedged approach reduces market risk while profiting ...
If a company is undervalued due to poor management, take a stake large enough to influence change.
Dont focus on making money; focus on protecting what you have. Playing great defense means youll be around to play offen...
The tape tells the story. Price and volume reveal what big money is doing. Learn to read market action.
Make a few big, well-researched bets rather than many small ones. Concentration builds conviction and focus.
Buy good companies at bargain prices. Rank by earnings yield and return on capital, then buy the top ranked.
Asset class returns revert to the mean. High valuations predict low future returns; low valuations predict high returns.
Buy stocks with low P/E ratios relative to their growth rates. The market often overreacts to bad news.
Understand the business deeply before investing. Read everything available. Talk to customers and competitors.
Commodities move in long cycles. Buy when nobody wants them; sell when everyone does.
When you have conviction, bet big. The way to make superior returns is through concentration, not diversification.
The prevailing wisdom is always wrong. Find the flaw in the prevailing bias and bet against it when conditions change. T...
Good science requires good scientists. We hire PhDs in mathematics, physics, and computer science—not Wall Street trader...
Over the long term, equities have outperformed bonds and cash. A well-diversified portfolio should maintain a significan...
Only invest in businesses you truly understand and that have sustainable competitive advantages. If you can't explain th...
When price and time are squared, a change in trend is imminent. This mathematical relationship between price movement an...
Know more about the company than anyone else on Wall Street. Talk to customers, suppliers, competitors, and former emplo...
Look for companies trading below the value of their assets. Real estate, patents, subsidiaries are often underappreciate...
Every day I assume every position I have is wrong. This removes the ego from trading. Never fall in love with a position...
It was never my thinking that made big money, it was my sitting. The big money is made in the waiting.
When you see value trapped by poor management, take action to unlock it. Be a catalyst for change.
Use a systematic, rules-based approach to remove emotion from investing. Stick to the system.
Bubbles are identifiable before they burst. Watch for valuations 2+ standard deviations above historical norms.
Look at total return: earnings growth plus dividend yield. Both matter for wealth creation.
Stay within your circle of competence. Only invest in what you truly understand.
Explore core insights from different masters across investment topics