Speeding Buses on a Flat Earth: A Discussion of Variant Perception
Decision making is a fundamental skill that every person performs, the quality of these decisions is what differentiates us. Fortunately, most decisions we make have well established cause-and-effect relationships that have become first nature tenants of our daily routine. For example: if I don’t shower I will smell bad; if I don’t wear warm clothes […]
Managing the (un)foreseeable
At Montaka we think about the future in terms of a bell curve. With any given business there is a range of potential outcomes that could transpire over time. Whilst we can never know with complete certainty which outcome will eventuate, we have processes in place to minimize the risks of being blindsided by unfavorable […]
The difference between complex and complicated
Greenlight Capital, Third Point, Glenview Capital, Lone Pine Capital, Omega Advisors, Millennium Management and Point72. If you came across these names on a list, you’d probably think it was the agenda for a high-powered New York hedge fund conference. Actually, these are just some of the many hedge funds at the top of the share […]
Sporting and Business Worlds Collide
“You gotta keep the worlds apart” – George Costanza For anyone who is a Seinfeld fan, the importance of keeping one’s different but important life interests, or “worlds”, separate should be obvious, serious, and hilarious. For those who don’t know the sitcom as intimately, a classic episode plays out where Jerry’s friend George Costanza (played […]
Beware the invisible asymptotes
In the world of tech, founders, management and investors are all trying to solve for one thing – to accurately and precisely forecast the trajectory of future growth. In a mature market with known parameters, this is arguably simpler to do. But in a new market with high growth rates, unknown adoption rates and an […]
Accounting Red Flags and Flashbacks of Failure
The common narrative today is that accounting fraud is virtually impossible. Stringent regulatory standards, extensive reporting requirements and professional auditors, have made financial statements and listed businesses more transparent than ever. While this perspective is true for a large majority of companies, its premise should be evaluated. Accounting is simply the language of finance and […]
Addendum: The Long Run Empirical Case for Global Equity Long/Short
In my last post “Downside Protection, Without Upside Reduction” I made the case for long/short global equities funds as a superior investment strategy compared with being fully invested in the broad global equities market over a suitably long horizon. Yet this is at odds with myriad articles in recent years that have chronicled the market’s […]
The passive investing paradox
While much ink has been spilled on the topic of active investing versus passive investing, the recent memo by Howard Marks, the Chairman of Oaktree Capital Management, did a good job of parsing through the topic with his usual lens of rationality. Given the ongoing shift of assets from active strategies into passive funds, it […]
Buy on the sound of canons
As the Buffett adage goes, “be fearful when others are greedy and greedy when others are fearful”. At its core, the phrase highlights the necessity of contrarian thinking when investing. Achieving investment outperformance requires a non-consensus view, and for that view to be proven correct over time. While this sounds straightforward, it is often challenging […]
Downside Protection, Without Upside Reduction: A Case for Global Equity Long/Short
We hear and read a lot about reducing investment risk, which typically falls into one of two schools of thought: lower volatility of returns, or downside protection. These ideas of risk management are incomplete. A more comprehensive view of risk management in a portfolio should diminish the focus on price volatility as a measure of […]
