他的投資紀錄超卓. 以下是 Graham & Doddsville 訪問他的部份摘要, 從中可看出他的投資功力深厚, 對價值投資概念的領略透徹.
Q:Harkening back to the first part of your investing career, you talked about passing on ideas. How many ideas did you pass on for every idea that you ended up acting upon?
Joel: It’s a tough one. I would say it obviously depends on how selective you are. If I looked at 40 or 50 ideas, and, while perhaps 12 or 13 of them would have worked out, if I end up only buying one, that’s okay. That’s fine as long as the one I choose works out. It doesn’t matter that I missed out on 11 or 12. Not losing money is a good way to ensure that your portfolio has a good risk/reward profile. One of the things I said in You Can Be a Stock Market Genius isif you don’t lose money, most of the alternatives are good.
Even if you don’t know what the upside is – if you just know there’s upside – you can create scenarios where you have an excellent risk/reward. Positions with limited downside are the types of positions that I have loaded up on in the past. Not the positions with the biggest payoff. I could buy a lot knowing that I wouldn’t lose much and that there were good possibilities that it was worth a lot more over time. At the very least, I knew that my downside was well-protected and so I could create an asymmetric risk/ reward by saying if I don’t lose much, there are not many alternatives other than to make money.
Something else that I’ve said in my class is that if you are trying to analyze an investment and there’s a lot of uncertainty regarding a company – whether it’s new technology or new competitors, or something else – or the industry in general is uncertain such that it’s very hard to predict what’s going to happen in the future, just skip that one and find one you can analyze. If you invest in six or eight things that you’ve analyzed closely, and if you’re pretty good at valuation and you have a long time horizon to see your target valuation eventually play out, then you’re going to do incredibly well even if you’re right on only four or five of the ideas. This is especially true if you include a margin of safety so that you’re not losing too much on the ones where you’re wrong.
What I said in the beginning is true: if you’re good at valuing businesses, the market will eventually agree with you. But that’s eventually. It could be in a couple weeks or a couple years, and that’s a big difference. The traditional definition of arbitrage always went something like this: buy gold in New York and sell it simultaneously in London, and you’ll make a dollar. But if I told you, “well, I guarantee you’ll make a dollar, but you could lose half of your money first, and it could take three years for you to make that dollar, and it’s going to bounce around randomly in the interim,” that’s not quite arbitrage in the traditional sense.
It’s certainly not riskless arbitrage, but it is a type of arbitrage – it’s a type of time arbitrage. That’s very hard for people to do. Throw in the fact that you don’t always get the valuation right. Yes, if you did good valuation work, the market will agree with you. I would submit that most people cannot value most companies well. If you’re very selective, however, you can value certain companies well. And that’s what I would think about doing.
Q: With respect to your risk management strategy, appropriately sizing positions has traditionally been one area of focus for you, correct?
Joel:Yes, people would say ‘how can you own only six or eight companies,’ because during a lot of my career, six or eight positions represented 80+% of my portfolio. People thought that was crazy because of the volatility and the Sharpe ratio or whatever you might want to look at, but the point is that I look at it differently. I look at stocks not as pieces of paper that bounce around. I look at them as ownership stakes in businesses.
One of the examples that Buffett gives is as follows: suppose you sold your business and you had $1 million. You walk into a town and you want to invest the money conservatively. You might look around and see that there are 50 businesses in the town but you want to try to pick ones that you think have a nice future that you could buy at a reason-able price. If you pick six or eight of them, most people would think that owning a stake in the barbershop, the hotel, and whatever other businesses you thought had nice repeat customers that would continue to grow over time as the town grew, was a pretty conservative way to go.
You’re not throwing all of your money into one business, you’re picking six or eight businesses that you researched carefully; have strong management and look like they have good franchises. That sounds fairly conservative to me. That’s how I look at owning a portfolio of stocks. Once again, they’re not pieces of paper that bounce around.
If you’re a long-term holder and you own a chain of stores in the Midwest and something bad happens to Greece, there may be some small impact, but you’re not going to sell your business for half of what you think it’s worth all of a sudden. If I’m a shareowner in businesses, I need to have a long -term perspective that things will work out roughly as I expect, otherwise I shouldn’t own them.
Q: Is there something in your background that made you predisposed to having a long-term mindset and a commitment to ensuring a margin of safety for each investment, or is this something which you developed over time?
Joel:This is a mindset I developed as early as an undergraduate student. As I mentioned earlier, I became interested in this business by reading Ben Graham. That’s what resonated with me, so what can I say? Margin of safety and how to think about Mr. Market are things that I thought about very early in my investing career.
Graham’s tenets seemed logical and simple – simple enough even for me to understand actually! So I started reading and thinking and experiencing. Some things you have to learn by doing them wrong, so I en-courage people to risk being wrong. You can’t be a good investor without investing.
As you gain experience you start to understand risk/ reward; you start under-standing what looks like a good opportunity and what doesn’t; you recognize when you have more knowledge than the market about a given issue and when you don’t. So it’s a matter of comparing situations to your history of opportunities. I’ve also said in class that one of the important things to look at is not just what’s available now but what you think might be available in the future, and that perspective comes with time.
Here’s the other thing – unfortunately you don’t learn from your successes all that much; you learn from the things you screwed up. You have to screw up a little bit to learn what not to do again and to remember it as well. But you have to combine this with the right thought process,which I think is the key. There are a lot of smart people out there. A lot of people have financial skills and most of them fail.
The difference between those who are successful and those who fail is perspective – the viewpoint of how they look at the market – which really just comes back to Ben Graham and keeping that long-term horizon and understanding how to filter out the noise. People are bombarded left, right, and center with information, even more so now; you can bury yourself as much as you want.
Therefore, you need a simple filter through which to look at the world. Those who have a baseline from which they can really contextualize everything they look at are the people who are successful. A lot of things are driven by emotion. When things get bouncy, as long as I continue to believe that my work was good, and my thought process was right, I have to ride it out. As easy as it sounds, it’s really hard to do.
Q: Any other parting words of wisdom for our readers?
Joel:If you want to get good at investing, read a lot and practice a lot. Even if it’s not a lot of money, it’s real money. Don’t fool yourself into thinking that this is all you need to do to lead a successful life. This is fun for me; it’s fascinating. There’s nothing wrong with this field but, as I said before, I don’t think there’s much social value in it.
You can probably say that about a lot of occupations that aren’t saving lives every day, so you don’t have to feel bad about it. But I would just encourage people pursuing an investing career who are ultimately successful in it, to figure out a way to give back. Many people reading this are Columbia MBAs and pretty much all of them are, or will be, successful in some field or another. If you can figure out a nice way to give back that’s meaningful for you, that’s even more fun than being successful in whatever you choose to do. Keep that in mind.