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“If we survive danger it steels our courage more than anything else.” – Reinhold Niebuhr It always amazes me how most analysis on an investment focuses on recent performance, rather than process.  Yet, so little attention is given to the investor return/behavior gap, a well-documented phenomenon that proves that “on, average, investors sacrifice a substantial […]

What is Gold?

“On a final note, what was the one asset you did not want to own when I started Duquesne in 1981? Hint … it has traded for 5000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative […]

The 3 Most Important Words in Investing

I Don’t Know These three words, almost never uttered in this business, are far and away the most critical to long-term investment success. Why? Because the future and markets are unpredictable, and having the humility to admit that is very hard for us to do. We’re simply not wired that way and instead suffer from […]

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The Volatility Cycle

More risk equals more return. Less risk equals less return. These are the commandments of the Capital Asset Pricing Model (CAPM), taught to first-year business students all around the country. Sounds reasonable enough but the CAPM is not one of Newton’s laws of motion; it is just a theory. In reality, while markets are highly efficient […]

Fighting the Last War

“It has been said critically that there is a tendency in many armies to spend the peace time studying how to fight the last war.” – J.L. Schley, Lieutenant Colonel, 1929 There are many parallels between military strategy and investing strategy. Markets, like wars, are unpredictable and investors much like generals must be prepared for a […]