It's a rainy, Winter's Sunday afternoon here. Perfect for lounging around - I love the occasional day like this. There are many far smarter people than me out there, so I take the time to read what they say. Often, they articulate things with extraordinary accuracy and insight. Two of my favourites are Seth Klarman and John Hempton, and here some recent quotes from them:
Seth Klarman (recent investor letter)
'Investing, when it looks the easiest, is at its hardest'
So true! Admittedly I have been getting complacent in the last few months and quite probably took my off the ball a bit. It's fun making money without having to work too hard. I'm being a little self critical here, but some complacency has definitely been lurking in the background. But the opposite also applies: investing is easiest when it is hardest. An excellent, practical quote for investors.
John Hempton (from the blog post Practical lessons in assessing exotic risks)
'...most financial experts are really just salesmen selling you the risks that their employers do not want to take'
This might be a bit harsh in some circumstances, but is so spot-on in many situations. It always bugs me why clients are pushed into trades when the research house doesn't take the trade itself. Why? Some investment houses invest a relatively very small portion of the house money to a trade in order to claim they have skin in the game. But that is misleading: we make $10 by selling research, brokerage, management and performance fees, and in return we risk 20c of our own money on the trade. Really generous. Not. Well put John.
Kristian
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