Between 1998-2016 I managed an absolute return strategy. I prefer absolute return investing over relative return investing. Investors, big and small, think in absolute returns (think pension return assumption of 8% or an individual return goal of “making money”). Nevertheless, the investment management industry has consistently gravitated more and more to the world of relative investing. In relative investing, losing 30% of clients’ capital is an achievement if the market declines 32%!
In the following posts I will attempt to shine light on absolute return investing and why I prefer it to the relative world. Furthermore, I plan to provide current updates on the business environment through the eyes of 300 small cap companies — many of which I’ve followed for 10-20 years. As I recently recommended returning capital to clients (due to the excessive small cap valuations and broadness in overvaluation), I’m using this blog, along with managing my own separate account, as a way to stay engaged until my opportunity set improves and I eventually return to the asset management industry. In effect, I decided to go all-in on patience.
Podcasts and interviews explaining the current environment and my investment process:
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