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“Unlike return, however, risk is no more quantifiable at the end of an investment that it was at its beginning. Risk simply cannot be described by a single number. Intuitively we understand that risk varies from investment to investment: a government bond is not as risky as the stock of a high-technology company. But investments do not provide information about their risks the way food packages provide nutritional data.”

WayEndsGovernmentNumbersCompanyTechnologyRiskInformationReturnInvestmentInvestingDataPackagesVaryHigh Technology
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“As value investors, our business is to buy bargains that financial market theory says do not exist. We've delivered great returns to our clients for a quarter century-a dollar invested at inception in our largest fund is now worth over 94 dollars, a 20% net compound return. We have achieved this not by incurring high risk as financial theory would suggest, but by deliberately avoiding or hedging the risks that we identified.”

ValuesRiskCenturyTheoryReturnDollarsFinancialFundInvestorsQuartersClientsAvoidingBargainsCompoundsFinancial MarketsInceptionHigh RiskIncurringHedging
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“Nowhere does it say that investors should strive to make every last dollar of potential profit; consideration of risk must never take a backseat to return. Conservative positioning entering a crisis is crucial: it enables one to maintain long-term oriented, clear thinking, and to focus on new opportunities while others are distracted or even forced to sell. Portfolio hedges must be in place before a crisis hits. One cannot reliably or affordably increase or replace hedges that are rolling off during a financial crisis.”

ThinkingShouldLongDoeLastsOpportunityTermClearFocusRiskReturnIncreaseCrisisSellsDollarsStriveFinancialProfitConservativeLong TermConsiderationCrucialInvestorsRollingEnteringDistractedFinancial CrisisPortfoliosNew OpportunityBackseatClear Thinking
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“Below, we itemize some of the quite different lessons investors seem to have learned as of late 2009 - false lessons, we believe. To not only learn but also effectively implement investment lessons requires a disciplined, often contrary, and long-term-oriented investment approach. It requires a resolute focus on risk aversion rather than maximizing immediate returns, as well as an understanding of history, a sense of financial market cycles, and, at times, extraordinary patience.”

BelieveWellsLongDifferentSeemsUnderstandingTermFocusRiskReturnLessonsLateApproachInvestmentExtraordinaryFinancialContraryLong TermCyclesInvestorsAversionResoluteFinancial MarketsMaximizingRisk Aversion
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