Jun
5
“There is a prisoner’s dilemma among relative return investors vs. absolute return investors. Absolute returns can be very unattractive during periods of strong performance of relative return investors. If these conditions last long enough, they become self-fulfilling as they did in the late 1990′s. Money left old economy stocks to participate in the speculative mania in Internet stocks. Julian Robertson liquidated. And Stanley Druckenmiller jumped in at precisely the wrong time. This episode, along with the meltdown in 2008, has convinced me that aiming for absolute returns may not be ideal. The way the markets have evolved, with once obscure investment strategies becoming commonplace, I think that absolute returns are going to become generally less attractive.”
Baupost’s underperformance throughout the 90′s; relative performance and duplicate bridge scoring; my discussion with Longtop shareholders « Stableboy Selections
