Martin Taylor
- On his ‘incredibly naive’ early trading strategy: My thinking was something like, The market has been down six days in a row There was some bad economic news, but I think that should be in the price now. I'll buy some.
- His boss Rory was inclined to take no action even on good trades, but this was an asset when it came to times of panic. During volatile periods, when it was all going wrong, he would counsel me, “Just calm down. This is what happens.” Working with him allowed me to learn about volatility without making crass errors like selling at the lows or buying at the highs.
- He uncovers massive corruption in Russia where the company owners are skimming 90% of profits and selling most of their inventory off the books. (surprise surprise)
- Although I was disgusted by Russia at the time, I had been willing to stay in it as long as it kept going up. I wasn’t going to argue with all the idiots who were buying Russia. If I had gotten out, and it kept going up, it could have been the end of my career. Remember, Russia was 40 percent of my benchmark.
- The reason I was right to start selling that day [of the dead cat bounce] was that the spell created by the senseless bull market had been broken by the previous day’s price collapse. When markets are trending up strongly, and there is bad news, the bad news counts for nothing. But if there is a break that reminds people what it is like to lose money in equities, then suddenly the buying is not mindless anymore. People start looking at the fundamentals, and in this case I knew the fundamentals were very ugly indeed.
- The Russians knew perfectly well what was going on, and they put all their money in Switzerland. You have to look where the smart money is. In an emerging market, the smart money is domestic, not international.
- There are three things I like to see when I buy a stock:
- a favorable macro situation,
- a secular trend,
- and good company management.
- When the market is so bad that you think it is obvious that you should be net short, that’s typically the time when it is all in the price and you should be buying.
- I am wrong all the time. If I can be right 60 percent of the time, and when I am right I have some big winners, and when I am wrong, I staunch the losses quickly, I can make a lot of money.
- RSI is only useful on the oversold side (but in a bull market only, surely)
- You have to be an expert in what you invest in. You need to understand why you are invested.
- I consider my pattern of taking quick profits in 2009 a dreadful error that I think came about because I had lost a degree of confidence due to experiencing my first down year in 2008, even though the loss was consistent with the expected loss given the magnitude of the market decline. I was constantly worried that markets were about to turn down again, particularly in regard to all the new investors who came into the fund in the second quarter of 2009.