>My idea of risk control is a little non-conventional. > >I like putting all my eggs in one basket and then watching the basket very carefully. I don't know what they teach at Marshall but at most business schools they teach I think a lot of nonsense called risk adjusted return and diversification. > >As a money manager if you look in a normal portfolio, most people will make 70-80% of money that year on two or three ideas even though they'll have 30-40 things in their portfolio. > >My concept was to put into those two or three ideas I had the most conviction in. > >I was also lucky to travel across asset classes so I traded commodities, currencies, bonds and equities and it gave me the disciple if didn't have a good idea in equities, I was happy to have no equities. Or the same thing with bonds. > >So when you have a quiver with a bunch of arrows in it, you can usually find something to put a lot of money into. > >The only other thing I'd say is too many investors look at the present, the present is already in the price, you have to think out of the box, and sort of visualize eighteen to twenty-four months from now what the world is going to be and what securities might trade at. You know, what a company is earning is ridic... it doesn't mean anything. What you have to look at is what people think a company is going earn, and if you can see two years it's gonna be entirely different from the conventional wisdom that's how you make money. > >My first boss used to say that obvious is obviously wrong. > >If you invest in conventional wisdom you're gonna lose your butt.