Diworseification: How Investors Can Avoid the Scourge of Overdiversification with Best Idea Funds
Here is the recent eBook: Diworseification_GrizzlyRock Enjoy
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Position Sizing Utilizing the Kelly Growth Criterion
First off I’d like to thank Jay over at marketfolly.com for posting this article last week (http://www.marketfolly.com/2013/01/position-sizing-utilizing-kelly-growth.html) I’m going to re-post my article here simply for blog continuity. Position Sizing Utilizing the Kelly Growth Criterion One of the more vexing tasks for investment allocators is position sizing. Regardless whether allocators select investment managers or individual securities, optimal position sizing is paramount to portfolio success. Small allocations to prescient investments minimize their impact while large allocations to poorly performing investments leads to underperformance. Some allocators elect to equal-weight investments given uncertainty regarding which investments will perform best. This strategy creates a [Read More...]
Why Selling Methodology Differs for Average versus Great Companies
In my year-end 2012 investor letter, I confessed the following mea culpa. “My biggest mistake during the year was clear: selling Visa Inc. (NYSE:V) in June for $120 as prevailing market prices neared my initial valuation estimation. While the Fund netted a 62.7% profit taxable at long-term rates on the sale, Visa was selling for about ~$150 per share at year end 2012. After accurate analysis and prescient investment, I sold Visa as the Fund captured the “low hanging fruit” yet the market continued to increase Visa’s price. Great businesses compound valuation as they grow and I neglected to adequately [Read More...]
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3 Risk Factors Identified by Successful Short Sellers
Friends of GrizzlyRock, this blog is only a few months old and I am still assessing the most efficient way to distribute the material. As such, I have posted a few blog articles on sites with broad distribution and will link to them on this blog. Please read the following for a discussion of 3 Risk Factors Identified by Successful Short Sellers. Best -Kyle
What is the Current Environment for Short Selling? (part 3 of 3)
(Post 3 in a three post mini-series on short selling) Just as sailors must be aware of the wind and tide, investors must have a sense of the horizon when allocating capital. As the market turns the page to 2013, let’s assess the landscape and decipher if short selling opportunities are apt to be challenging or benign. What have respected market participants been saying recently? Jim Chanos of Kynikos Associates “We are seeing lots of new ideas on the short side, both in the U.S. and globally, and generally we have a lot to do. The world has [Read More...]
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Tagged Opportunity, Short Selling, Uncertainty, Value Investing
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Why doesn’t Warren Buffett Short?
(Post 2 in a three post mini-series on short selling) My previous blog post “Top 10 reasons Value Investors Avoid Short Selling” highlighted the following as one reason value investors avoid shorting: “Warren Buffett Doesn’t Short: While superficial, don’t underestimate this one. Many value investors liberally quote Buffett and consider his opinions to be fact.” Here is the Oracle of Omaha from just two weeks ago on why he doesn’t short: “Charlie and I (Buffett) have both talked about it. We probably had a hundred ideas of things that would be good short sales. Probably 95 percent of [Read More...]
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Tagged Buffett, Charlie Munger, partnership, Short Selling, Value Investing
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Top 10 Reasons Value Investors Avoid Short Selling
(Post 1 in a three post mini-series on short selling) Value investors are an irascible bunch. We ply our trade away from the hubbub of Wall Street’s fast money and bright lights. What gets us excited is finding salient nuggets of information few others recognize, and utilizing the information to capture market inefficiencies. Ah, the elusive “buying a dollar for 50 cents!” Whenever I meet fellow value investors, our conversation inevitably turns to investing style. Some prefer credit, others equity. Some US, others international. Some focus on a near-term catalyst while others are content with an attractive valuation. The [Read More...]
Book Review: “Psychology of Intelligence Analysis” by Richards Heuer
During my daily quest to invest in misunderstood or mispriced businesses, much of my analytic work involves making decisions involving uncertainty. As many of you know, I enjoy learning about the way others analyze situations in order to implement their best thought processes into my own. As Issac Newton commented frequently “If I have seen further than other, it is because I stand on the shoulders of giants” –Bernard of Chartres (12th century) Much in this same vein, a friend recommended I read the (out of print) book: “Psychology of Intelligence Analysis” by Richards Heuer. Mr. Heuer was an [Read More...]
Welcome to GrizzlyRock Capital
This blog is deigned to inform, educate & entertain. Email me at kyle@grizzlyrockcapital.com if there is a topic or item of interest to be discussed on this blog. Legal Disclosures No material on this website constitutes an offering of securities or the sale of a fund managed by GrizzlyRock Capital. The information contained herein is provided for informational purposes only and does not constitute an offering or the solicitation of an offer to purchase an interest in any fund. Any such offer or solicitation will only be made to qualified investors by means of a confidential private placement memorandum and [Read More...]
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