We Study Billionaires - The Investor’s Podcast Network

TIP532: Insights From A Reclusive Investment Firm w/ Graeme Forster

12 snips

Mar 10, 2023

Dr. Graeme Forster, Director and Portfolio Manager at Orbis, shares his fascinating journey from mathematics to value investing. He discusses legendary investors like Jim Simons and the success of Orbis' founder, Allan Gray, emphasizing the importance of flexibility in investment strategies. Graeme introduces the concept of the 'Great Misallocation' and illustrates how good, cheap companies excel in bear markets. His unique blend of macro and micro perspectives offers valuable insights for investors navigating today's complex landscape.

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ANECDOTE

From Math to Markets

Graeme Forster's academic disillusionment led him to explore poker and randomness.
These explorations sparked his interest in investing, highlighting the importance of uncertainty.

INSIGHT

Imperfect Information

Leaders often face pressure to appear all-knowing, but acknowledging uncertainty is crucial.
Embrace humility and build cautiousness into decision-making processes.

INSIGHT

Kelly Criterion in Investing

The Kelly Criterion, while useful for binary bets, is difficult to apply directly to investing due to its reliance on precise edge calculation and binary outcomes.
However, the principle of Kelly Criterion—emphasizing differentiated views and conviction—can inform position sizing.

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