That’s interesting! I am of the opposite opinion! I’ve been thinking a lot about that Keynes quote – ”the market can remain irrational longer than you can remain solvent”. That may be, if your shorting. Otherwise I would say ”I can remain rational longer than the market can remain irrational” – or: "I can be right longer than the market can be wrong." (Sounds a little cocky though, doesn't it...) I would say this quote also refers to the fact that money managers, however disciplined they may be to some value investing philosophy, are still dealing with non-expert clients, who may reclaim their capital if the manager, according to the client himself at least, is underperforming some reference measure. There are lots of stories, especially taking place in the late 1990s, wherein these people asked back their money to invest in some fashionable tech/telecom company (or funds investing solely in these entities) right before that neat explosion happened we all heard about. Of course, poetic justice demands that the money manager with the value approach whom the client left, outperformed for the next half a decade (The 'Value Investing Chronicles' tell me '01-'06 or so was apparently a golden era...).
= Nya = |
