Position sizing can be as important a driver of portfolio outperformance as security selection. But many investors struggle with clearly communicating their position sizing philosophy. Here, we discuss why and provide some insight into our approach.

How should investors think about tail-risk hedging in a new world?

Markets function as a medium for the weighing of intrinsic value is facilitated by their profiting on arbitrage. Recently, that arbitrage has grown shaky, leading to disruption of an orderly market function. How can investors combat this dislocation?

We’re not in the business of extrapolating cycles. But we are students of cyclical phenomenon. Mean reversion is by our estimation, the most powerful force in investing. When combined with human behavior, it drives the yawning gap between long-term average returns and middling average-investor outcomes.

Is risk variance or potential for permanent capital loss? When is measurement important versus foolish in quantifying risk?

Richard Oldfield’s pseudo-autobiographical work Simple But Not Easy is a unique insight into the mind of a value investor currently managing an eclectic global equities portfolio, who also had the experience of running a prominent family office and chairing the IC of Europe’s largest and most prominent University Endowments.

The Circle of Competence is an often-cited mental model attributed to Warren Buffett. We humbly offer a contribution to Buffet’s lesson through a slight modification.

What can we tell about the skill of an investment manager through the positions supporting their results? A lot.

What is success for an active manager? It really boils down to two things. Generating alpha, and growing assets. In an ideal world, the two are symbiotic. In reality, they often conflict.