10 Attributes of Great Fundamental Investors

Be numerate (and understand accounting) Understand value (the present value of free cash flow) Properly assess strategy (or how a business makes money) Compare effectively (expectations versus fundamentals) Think probabilistically (there are few sure things) Update your views effectively (beliefs are hypotheses to be tested, not treasures to be protected) Beware of behavioral biases (minimizing […]

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Seth Klarman’s YE2018 Letter: Review of 2018 & Portfolio Management for 2019

Returned roughly breakeven for the year ended 12/31/18 2018 in Review Major US stock market indices steadily gained ground for the first 3 quarters before plunging in a highly volatile 4th quarter Generally rising share prices moved in tandem with higher corporate earnings, the result of massive fiscal stimulus, large corporate tax cuts, and historically […]

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Anatomy of Distressed Debt Markets

Table of Contents Introduction Size of the Distressed and Defaulted Debt Market Distressed Securities Investors Investment Strategies Active Control Investors Active Non-Control Investors Passive Investors Valuation of Distressed Securities Literature Review Measuring and Investing in Defaulted and Distressed Debt Securities Market-to-Face Value Ratios Post-Default Experience Volatility of Defaulted Bond Returns Performance by Seniority Defaulted Loan […]

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