Lee Ainslie Quotes
102 Lee Ainslie Quotes
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[In January 2014] At the end of the day, businesses are run by people, and different management teams have different motivations and different abilities.
Lee Ainslie
[In January 2014] I believe that a successful investor must be very comfortable with a number of different valuation methodologies and have the wisdom to recognize which valuation approach is going to be the most relevant in different situations.
Lee Ainslie
[In January 2014] Our most successful investments tend to be those where our research process has led us to a conclusion that is different than the perspective commonly held by most investors…
Lee Ainslie
[In January 2014] When we evaluate a management team, we’re much more focused on analysing past decisions and actions than simply reviewing their responses to our questions.
Lee Ainslie
[In January 2014] I think I have read almost everything that
Warren Buffett has written, and I agree with more than 95% of his thinking…
Lee Ainslie
[In January 2014] I think too often investors get wed to certain investments that have worked well or perhaps because they’ve developed a nice relationship with management that they don’t want to disrupt, and so investors often get complacent and comfortable with their current portfolio. In my judgement, it is critical to attempt to identify the best possible use of capital continuously.
Lee Ainslie
[In January 2014] When somebody tells me that they don’t think we should sell a stock, but that they wouldn’t buy more at the current price either, then that investment probably does not represent one of our very best uses of capital…
Lee Ainslie
[In January 2014] In measuring potential downside, we have often used historical dynamics, such as trough book value or revenue multiples. One of the lessons of 2008, and even more so in 2011, was that, in certain environments those historical patterns can collapse.
Lee Ainslie
[In January 2014 looking back on investing in NeoStar a merged entity from Software Etc and Babbages.] We concluded that the company would earn significantly more than investors were expecting. And we were wrong. We were wrong because management just blew it… While our investment case for NeoStar was extremely compelling, we were doomed by horrific execution.
Lee Ainslie
[In January 2014 more on looking back on the merger of Software Etc and Babbages to form NeoStar.] In doing a postmortem, it became clear the merger was a disaster. The companies continued to be run as separate entities and continued to compete viciously. There was huge in-fighting about who was going to get what responsibility. Instead of taking advantage of the obvious synergies, they had duplicate efforts on many different fronts. One large vendor told us that two different people each thought they were ordering for all the stores and as a result, important orders were placed twice, and they literally ended up with twice the expected inventory. It was just an unmitigated disaster.
Lee Ainslie
[In January 2014] Read as many investment books as you can get your hands on. I’ve been able to learn something from almost every book I have ever read.
Lee Ainslie
[In January 2014] When I started, there were probably about 100 hedge funds in the world. Today, there are over 7,000.
Lee Ainslie
[In August 2014.] Certainly valuations are a bit extended. Equities have tripled in a little over five years. And yet equities are quite cheap relative to other asset classes.
Lee Ainslie
[In August 2014.] This is the strongest year for M&A since 2007. Our expectation is that by the end of the year we will have surpassed 2007.
Lee Ainslie
[In August 2014.] One of the very troubling impacts of this very aggressive monetary policy is the suppression of risk premiums. Just to put this in perspective in the fall of 2011 S&P volatility hit 37%. That did not happen once between 1938 and 1988. 50 years without that type of volatility and by the way there were a couple of important macro events in that 50 year period. You then went from ‘88 to 2002 before it happened again - 14 years. 2002 to 2008 which we all remember - 6 years. 2008 to 2011 - 3 years. So there is this pattern of ever shorter time frames for these very significant volatility shocks. And as you’ll all recall 2008 and 2011 was simply very painful for the markets.
Lee Ainslie
[In August 2014.] The thing with severe volatility spikes, they are very hard to see in advance.
Lee Ainslie
[In August 2014 on the VIX recently being at an all time low.] Two weeks ago the VIX was sitting on it’s all time low by contrast. We agree - to me that is troubling. There are many measures of risk that we think are just not very appropriate for the world we live in today.
Lee Ainslie
[In August 2014 on volatility shocks.] It’s very difficult to predict these type of shocks in advance. But actually because risk is priced so cheaply, we can buy insurance at levels (insurance meaning lots of different instruments) which should be very profitable in very challenging circumstances for different markets around the world. We can buy these instruments at prices that are very, very cheap.
Lee Ainslie
[In August 2014.] We don’t talk about individual shorts - sorry.
Lee Ainslie
[In September 2014.] Clearly we’re having these volatility spikes with ever greater frequency…
Lee Ainslie
[In September 2014.] There’s a great contrast between the threats of the world we live in both in terms of monetary policy and the impact of tapering, the fact of what’s happening in Europe and Japan but also just in terms of crises that we’re facing around the world today. And I don’t think it’s being appropriately priced today as we’ve seen in the past when those sorts of volatility spikes happened… A really challenging environment so we’re keeping those risks in mind as well.
Lee Ainslie
[In September 2014.] The greatest concern we have right now is the unnatural suppression of risk premiums as a result of very aggressive monetary policy.
Lee Ainslie
Bonus
[At the end of October 2007.] I would argue that we are beginning a period of long-short nirvana. My guess is that we’ve seen the bottom and we’ve got the best ahead of us.
Steven Galbraith – (Partner - Maverick Capital)
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