4th October 2012: David Einhorn @ Value Investing Congress

David Einhorn (ValueWalk)

 

Reformed Broker Josh Brown has notes posted from David Einhorn‘s speech to the Value Investing Congress.

 

ValueWalk also has an analysis of Einhorn’s speech and observes that sell-side analysts now follow the hedge fund manager’s thinking.

 

I’ve followed Einhorn since his book Fooling Some of the People All of the Time revealed his analytical research approach to value investing.

 

Einhorn’s list of long and short stocks is an interesting read. You sense Greenlight Capital‘s research and valuation processes: the significant factors (management view, company, industry, market, macroeconomic and causal) that shape companies, and the Bayesian inferential view of investor beliefs about them; how this analysis then translates to a market forecast; and how Einhorn intends to capitalise on these dynamics. The estimate assessment of multivariate factors shape investor beliefs and decisions. The market action which occurs from this creates opportunities using behavioural finance and market microstructure models (with a nod to technical analysis and high-frequency data analysis of transaction flows and volatility). It’s like reading Michael Mauboussin about how to think about investment ideas; or Peter Schwartz about trend forecasts and scenarios; or Robert Jervis and Gregory Treverton on strategic intelligence.

30th August 2012: Geopolitical Strategic Uncertainty

The Interpreter‘s Rory Medcalf asks:

 

But bear with me. What if, this time, complex uncertainty really is the order of the day, indeed, of the next two decades?

 

In the 1990s the Global Business Network‘s Peter Schwartz popularised scenario planning as a methodology to deal with complex uncertainty. John Petersen’s Arlington Institute considered wild cards and side-swipes. The political scientists Robert Jervis (System Effects) and James N. Rosenau (Distant Proximities) have explored the kinds of causal interactions and second/third-order effects that Medcalf suggests about the global order and trends. Perhaps we’ll all be reading Nassim Nicholas Taleb‘s new book Anti-Fragile when it’s released in November.