Under The Microscope: Rule No.1 is Never Lose Money

In these turbulent days in the market, lets revisit a frequently quoted Warren Buffett line - "Rule No.1 is never lose money. Rule No.2 is never forget rule number one." Before we dig deeper into the quote, let me make it clear that I agree wholeheartedly with most successful investors that managing risk is job number one for a portfolio manager. But, contrary to academic view, keep in mind that risk is not really the volatility of stock price, it is the possibility of permanent loss of … [Read more...]

Under The Microscope: Concentrated Portfolios

In the world of investing, just like in the world of politics, people tend to hold strong views about what is the right way to invest. But, when you look deeper, often there are merits in both sides of the argument depending on the context. Many investors take a quote from a famous investor that fits their viewpoint and use that idea as a rule of thumb in their investing philosophy. However, a different interpretation emerges when you look under the surface and take the context of the quote into … [Read more...]