Thanks for sharing, I didn’t know about him! I think as well that those companies with great moats and no competition should be bought at reasonable valuations, if not, the performance can be reduced (at least in the short and medium term)
It depends on your value investing style. Some traditional value investors do wait for a prudent valuation before buying in. The downside is that they can miss out on great opportunities.
On the other hand, quality investors aren't as price-sensitive. They focus more on the fact that if a company is high quality and can compound over the long term, its intrinsic value will keep growing—so the price you pay doesn't matter as much.
This was a terrific read. Chris Hohn is a living embodiment of the principles of (i) remaining within one’s circle of competence, and (ii) having the conviction to run highly concentrated positions over long periods of time. It is so satisfying to watch two of the core principles of investing promoted by Munger / Buffett continue to produce spectacular returns.
Completely agree Ezra and in my experience, most investors understand the maths behind Hohn's approach ( my sub is as an ode to him!)
Yes, the profits of great businesses are more predictable over 5 years or so, but the truth is that most of a stock's return is actually decided by the multiple at the time you sell.
That multiple is decided by the businesses future prospects, and that's really hard to judge unless the business is a Hohn-style predictable monopoly
Yes completely! I think having a watchlist of your favourite companies and regularly updating your 'cheap' price alerts is the best way to catch these moments
It’s hard to do it. First and foremost, you need to have an identified universe, just like Hohn’s does. Then, know that universe. And then, monitoring the price. It takes time, lots of, but who cares?
Thanks for sharing, I didn’t know about him! I think as well that those companies with great moats and no competition should be bought at reasonable valuations, if not, the performance can be reduced (at least in the short and medium term)
It depends on your value investing style. Some traditional value investors do wait for a prudent valuation before buying in. The downside is that they can miss out on great opportunities.
On the other hand, quality investors aren't as price-sensitive. They focus more on the fact that if a company is high quality and can compound over the long term, its intrinsic value will keep growing—so the price you pay doesn't matter as much.
He is an unusually clear thinker.
And he stick to his guns!
This was a terrific read. Chris Hohn is a living embodiment of the principles of (i) remaining within one’s circle of competence, and (ii) having the conviction to run highly concentrated positions over long periods of time. It is so satisfying to watch two of the core principles of investing promoted by Munger / Buffett continue to produce spectacular returns.
Indeed! Just “boring investing”. Someone should tell Terry Smith about that…
He seems like an extremely painful man.
My MSFT is 1%.
Completely agree Ezra and in my experience, most investors understand the maths behind Hohn's approach ( my sub is as an ode to him!)
Yes, the profits of great businesses are more predictable over 5 years or so, but the truth is that most of a stock's return is actually decided by the multiple at the time you sell.
That multiple is decided by the businesses future prospects, and that's really hard to judge unless the business is a Hohn-style predictable monopoly
Yes, but sometimes the market gets it wrong and might offer you a quality company at a "cheap" price.
Yes completely! I think having a watchlist of your favourite companies and regularly updating your 'cheap' price alerts is the best way to catch these moments
It’s hard to do it. First and foremost, you need to have an identified universe, just like Hohn’s does. Then, know that universe. And then, monitoring the price. It takes time, lots of, but who cares?
💯
It takes a lot more time running around looking for a deal all the time too