Thoughts on Investing
This manager commentary provides insight into our global, concentrated absolute value investing philosophy and the key tenets that have consistently underpinned our value investing approach.
The purpose of C&B Notes is to pass along ideas, concepts, stories, and information that are informing and influencing our worldview and “latticework of mental models.”
A recent client memo by Wachtell Lipton highlights the UK government’s recent decision to stop mandating quarterly earnings reporting. We applaud this change and wish US lawmakers would follow suit. The natural tendency for executives to manage what can be measured often leads to short-term thinking. Many non-US companies that we follow report only on a semi-annual basis, and we are quite satisfied with the frequency of this disclosure.
Nassim Taleb has written a new book that is, in many ways, a description of what works in a world (and markets) that inevitably encounter black swan events. One of our takeaways is that society should focus less on trying to predict or manage/smooth outlying events, but rather should create and employ frameworks that best navigate them. We believe that Graham’s insistence on a margin of safety – the heart of value investing – is one of these frameworks.
There is no substitute for being on the ground to assess how businesses are really performing. Accordingly, international and domestic travel is a critical component of our research. This Travelogue includes snippets from some of these international trips.