“…I want to…point out that there aren’t always great things to do, and sometimes we maximize our contribution by being discerning and relatively inactive. Patient opportunism – waiting for bargains – is often your best strategy.”
“…the investment environment is a given, and we have no alternative other than to accept it and invest within it…Among the value prized by 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, of rise and fall…In other words, mujo means cycles will rise and fall, things will come and go, and our environment will change in ways beyond our control. Thus we must recognize, accept, cope, and respond. Isn’t that the essence of investing?...All we can do is recognize our circumstances for what they are and make the best decisions we can, given the givens.”
“Standing at the plate with the bat on your shoulders is Buffett’s version of patient opportunism. The bat should come off your shoulders when there are opportunities for profit with controlled risk., but only then. One way to be selective in this regard is by making every effort to ascertain whether we’re in a low-return environment or a high-return environment.”
In order to practice patient opportunism by implementing standards of selectivity, the investor must first have a method for recognizing & determining the best course of action based on risk-reward opportunities in the past, present, and future.
“Because they can’t strike out looking, investors needn’t feel pressured to act. They can pass up lot of opportunities until they see one that’s terrific…the only real penalty is for making losing investments…For professional investors paid to manage others’ money, the stakes are higher. If they miss too many opportunities, and if their returns are too low in good times, money managers can come under pressure from clients and eventually lose accounts. A lot depends on how clients have been conditioned.”
One caveat to the "no called-strikes": clients. For some investors, the client base and permanency of capital will dictate whether or not there are called-strikes in this game. If your investment approach involves waiting for perfect pitches, make sure your clients agree, and double check the rulebook that there are indeed no called-strikes in this game!
“The motto of those who reach for return seems to be: ‘If you can’t get the return you need from safe investments, pursue it via risky investments.”
“It’s remarkable how many leading competitors from our early years as investors are no longer leading competitors (or competitors at all). While a number faltered because of flaws in their organization or business model, others disappeared because they insisted on pursuing high returns in low-return environments.
You simply cannot create investment opportunities when they’re not there. The dumbest thing you can do is to insist on perpetuating high returns – and give back your profits in the process. If it’s not there, hoping won’t make it so.”
Expected return (or future performance) is not a function of wishful thinking, it’s a function of the price you pay for an asset.
“In Berkshire Hathaway’s 1977 Annual Report, Buffett talked about Ted Williams – the ‘Splendid Splinter’ – one of the greatest hitters in history. A factor contributed to his success was his intensive study of his own game. By breaking down the strike zone into 77 baseball-sized ‘cells’ and charting his results at the plate, he learned that his batting average was much better when he went after only pitches in his ‘sweet spot.’”
How many Readers have systematically studied your “own game” – the sources of investment performance – good and bad?
Because everyone’s “game” is different, I suspect this exercise will likely vary for each person. I would be curious to hear about the methodologies employed by Readers who conduct this review/analysis on a regular basis.
“The absolute best buying opportunities come when asset holders are forced to sell, and…present in large numbers. From time to time, holders become forced sellers for reasons like these:
Their portfolio holdings violate investment guidelines such as minimum credit ratings or position maximums.
They receive margin calls because the value of their assets fails to satisfy requirements agreed to in contracts with their lenders…
They have a gun at their heads and have to sell regardless of price. Those last three words – regardless of price – are the most beautiful in the world if you’re on the other side of the transaction.”
“…if chaos is widespread, many people will be forced to sell at the same time and few people will be in a position to provide the required liquidity…In that case, prices can fall far below intrinsic value. The fourth quarter of 2008 provided an excellent example of the need for liquidity in times of chaos.”
Ultimately, it’s an imbalance in underlying market liquidity (too many sellers, not enough buyers) that creates bargains so that prices “fall far below intrinsic value.”
Milton Sorrells Holloway, 88, of Shelbyville, passed away Thursday, July 24, 2014, at St. Thomas Rutherford Hospital.
Mr. Holloway was born Dec. 7, 1925, in Lincoln County, to the late James Frank and Bernice Inez Sorrells Holloway. He was retired from Eaton Corporation and worked 25 years at Marshall County Creamery and Kraft Cheese. He was an elder and member of Petersburg Cumberland Presbyterian Church.
He was preceded in death by his wife, Treva Sisco Holloway, in 2005; two sisters, Inez Holloway Freeman and Ruth Holloway Leal; and two brothers-in-law, Bryce Hemphill and Homer Freeman.
Survivors include a daughter, Lynda Reed, and her husband Johnny, and a son, James Milton Holloway Sr., all of Shelbyville; two sisters, Jean Hemphill of McMinnville and Foncene Venn and her husband Fred of Sun City, Ariz.; five grandchildren, James Milton (Lawanna) Holloway Jr. of Woodbury, Stacy Arnold (Ben Roth) of Nashville, Ashley (Matt) Hughey of Murfreesboro, Stephanie (Brian) Rives of Fayetteville, and Daniel (Kelly) Reed of Unionville; seven great-grandchildren; a brother-in-law, Ben Leal of Fayetteville; and two sisters-in-law, Marie Sanders of Tuscaloosa, Ala. and Peggy Johnson of Murfreesboro.
Funeral services were held Saturday, July 26, at Petersburg Cumberland Presbyterian Church, with Reverend Troy Green and Brother Frelan George officiating. Burial followed in Old Orchard Cemetery.
Memorials may be made to American Heart Association, American Diabetes Association, or Women CPW at Petersburg Cumberland Presbyterian Church.
will it sink or float? / this is a simple toddler activity that involves a large bowl of water, random objects from your drawers (our junk drawer held lots of good treasures) and a discussion about why things sink and float. we play it almost every day.
i'm super excited about our playtime / learning time activities and plan to share them in a new category, preschool projects. feel free to leave a link to an activity idea your kids love!
We just did this the other day, too! So fun...Another favorite, colored water mixing to see what colors we can make, the old baking soda/vinegar trick, and cooking.
Marta. You read my mind! I was actually going to comment and suggest you share all of your "activity time" ideas with us! I am going to love your preschool projects!
this new category has me all kinds of excited! you always offer such simple, doable ideas for everything in life - but their simplicity is always laced with creativity, inspiration and beauty. hip hip for hearing how you and benji spend your little learning minutes together. am ready to soak up your motherly sunshine.
Love the idea of this new category. I've been stalking your pin boards for ideas for kids too. Thanks for the inspiration.