STABLEBOY SELECTIONS

http://link.brightcove.com/services/player/bcpid607698505?bctid=28217116001

We used to have security analysis based on Graham and Dodd. Shares were supposed to reflect the underlying earning power… discounted earning power of the companies concerned. I mean… people who run hedge funds know that that’s not what it’s about. It’s about are the stocks going to go up or down? It doesn’t matter whether the earnings are going to go up or down. It depends on how people perceive the market. As Keynes said, it’s like trying to judge how other people will judge beauty in a contest… it’s not about how YOU judge beauty.

When I see a bubble, the first thing I do is buy. If I’m right and a bubble does develop, I’m going to make money. If I see the flaw in the bubble, then I’m really happy because I’ll know that I have to sell.