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April 30, 2024
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One of the characteristics of a great PM is their ability to analyze all resources at their disposal, like the search bar, buddy.
Every time I see your name I cringe at the thought of whatever nonsense you may have typed. Then I always smirk at the amount of MS thrown at you afterwards.
admitting when wrong, eating own cooking, constant communication with investors (during good times & bad), staying in lane (not pulling a Bill Gross and opining on income inequality or the stock market, dude just focus on bonds), and most importantly: outperformance.
Cliff Asness sent a letter justifying why his fund had been doing terribly this year. I guess, he can be considered a good PM.
I've not perused his long term returns, but this is a good indication in my experience. for those curious, go back and read guy spier & seth klarman's investor letters from the late 90s. they didn't hide from their underperformance, and were humble when it turned around
There was an interesting study done recently about how PMs that drive maximum horsepower cars (expensive cars) are usually characterized by sensation seeking and therefore are more risk-on, hence performing poorly relative to their Honda Accord driving PMs who are (according to the data) much more risk averse and perform better. So to answer your question, if you want to see a great PM, look at the car they drive.
mind linking that study? haven't been able to find it
Matt Levine quoted it in his newsletter on Bloomberg Opinion a couple days ago, you should be able to find it there. Very interesting and actually quite comical read.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2882983
surely to afford the Ferrari you must have needed to generate strong outperformance in the first place?
How about PM who walks? Or cycle?
2013 David Einhorn: "drives a Honda Odyssey minivan"
2018 David Einhorn: "is happy that his Tesla Model S lease ended . . . and is excited to get the Jaguar I-PACE"
pnl
A few commonalities I've noticed from observing great PMs:
1) Meta-cognition / self-awareness: knows own strengths and weaknesses (intellectual, behavioral), learns from mistakes and compounds investment skill over time; recognizes and controls own fear & greed and takes advantage
2) Intuitive understanding of asymmetry: does this investment really offer a far greater reward than the downside risk scenario playing out?
3) Nuanced thinkers: investment thesis expressed with sophisticated rationale - a crude thesis might read "Company X has low P/E and P/B , their manufacturing division is growing so buy the stock"; a more sophisticated thesis might read "Company X might appear superficially cheap on a multiple basis, but high debt levels and unforgiving covenants jeopardize the transfer of free cash flow to the stockholder, furthermore in a low barrier to entry industry (due to cheap entry licenses/irrelevance of brand value) future earning streams could be vastly overstated"
4) Long term orientation: Buffet, Klarman, Michael Burry etc. all can tolerate short term pain for long term gain (hard to do when angry clients are on the phone). Long term investing cuts out the noise and day to day random fluctuations of the market. How many GREAT investors are successful trading on a day by day or even quarter by quarter basis?
5) Intellect: Important, but by no means decisive on its own; see spectacular downfalls of ultra high IQ Victor Niederhoffer and "look at all muh Nobel prizes " Long Term Capital Management
Soros, Tudor Jones druckenmiller count as outperforming? Many ways to play the game. I think most of your thoughts are hogwash.
Also buffet and Klarman I don’t think they outperform anymore. I would be interested in seeing baupost recent performance since 2012. I have a feeling his style no longer works. His public comments seem to be missing a lot of ideas.
Whoever is throwing MS at every post, please get off this site and try to lose your virginity; I realize that was probably pretty optimistic, so please just get off this site
Great PMs focus on things they can actually control: branding, marketing, and building AUM.
+10: hilarious but true
Luck.
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