I have always been attracted to the low cost operator in any business and, when you can find a combination of (i) an extremely large business (ii) a more or less homogenous product, and (iii) a very large gap in operating costs between the low cost operator and all of the other companies in the industry, you have a really attractive investment situation.
Man, as a social animal who has the gift of language, is born to prattle and to pour out twaddle that does much damage when serious work is being attempted. Some people produce copious amounts of twaddle and others very little.
“People are credulous creatures who find it very easy to believe and very difficult to doubt. In fact, believing is so easy, and perhaps so inevitable, that it may be more like involuntary comprehension than it is like rational assessment.”
– Daniel Gilbert
The key to making great investments is to assume that the past is wrong, and to do something that’s not part of the past, to do something entirely differently.
I tell my kids, what is the difference between a hero and a coward? What is the difference between being yellow and being brave? No difference. Only what you do. They both feel the same. They both fear dying and getting hurt. The man who is yellow refuses to face up to what he’s got to face. The hero is more disciplined and he fights those feelings off and he does what he has to do. But they both feel the same, the hero and the coward. People who watch you judge you on what you do, not how you feel.
It’s the best possible time to be alive, when almost everything you thought you knew is wrong.
– Tom Stoppard, Arcadia
The things that everybody feels good about are likely to be the things that are high priced and the things that everybody feels bad about are likely to be low priced, so if you could find a stock that nobody thinks this company could ever have a good day, maybe there’s a chance that it could produce some favourable surprises and make you a lot of money.
We make money from favourable surprises, and if the positive conviction is so high, then by definition there can never be a favourable surprise.
When art critics get together they talk about form and structure and meaning. When artists get together they talk about where you can buy cheap turpentine.