Ten Commandments of (value) investing

Jeremy Grantham, the well-known investment guru outlines his 10 rules of investing.

  1. Believe in history.  History repeats and repeats, and forget it at your peril. All bubbles break, all investment frenzies pass away.
  2. Neither a lender nor a borrower be.” Unleveraged portfolies cannot be stopped out, leveraged portfolios can.
  3. Don’t put all of your treasure in one boat
  4. Be patient and focus on the long term. Wait for the good cards. If you’ve waited and waited some more until finally a very cheap market appears, this will be your margin of safety.
  5. Recognise your advantages over the professionals. ”The individual is far better-positioned to wait patiently for the right pitch while paying no regard to what others are doing, which is almost impossible for professionals.”
  6. Try to contain natural optimism. ”optimism comes with a downside, especially for investors: optimists don’t like to hear bad news.”
  7. But on rare occasions, try hard to be brave. If the numbers tell you it’s a real outlier of a mispriced market, grit your teeth and go for it.
  8. Resist the crowd. cherish numbers only: The best way to resist is to do your own simple measurements of value, or find a reliable source. Then hero-worship the numbers and try to ignore everythign else. The ebb and flow of economic and political news is irrelevant.
  9. In the end it’s quite simple. Really. ”GMO predicts asset class returns in a simple and apparently robust way: we assume profit margins and price earnings ratios will move back to long-term average in 7 years from whatever level they are today. We have done this since 1994 and have completed 40 quarterly forecasts … Well, we have won all 40.”
  10. “This above all: to thine own self be true”. To be at all effective investing as an individual, it is utterly imperative that you know your limitations as well as your strengths and weaknesses. If you can be patient and ignore the crowd, you will likely win.

Tramping the routeburn track

“Tramping” — hiking in the New Zealand back country, usually overnight and carrying a pack.

The name of this site was inspired by my very memorable experience in tramping the Routeburn track in the South Island of New Zealand in early 2010. The track is one of the 9 well-known Great Walks. The walk itself is not overly difficult however one needs to be reasonably fit to carry around 12 kg of back pack which includes sleeping bag, enough cloths and food supply for 3 days and 2 nights trip.

You see, the Kiwis has this great system that allow you to book yourself into one of the huts along the route. It was Routeburn Falls Hut for our first night and Lake Mackenzie Hut on the following night.

The Hike

Day 1 – Routeburn Shelter to Routeburn Falls Hut:

Day 2 – Routeburn Falls Hut to Lake Mackenzie Hut:

Day 3 – Lake Mackenzie Hut – The Divide