When we write our Long Ideas, we try to anticipate every possible outcome. We discuss and attempt to refute the bear case, model multiple DCF scenarios, and try to account for how macroeconomic factors, competitive pressures, and management incentives might impact future operating performance.

Nevertheless, sometimes we get things wrong. Maybe, we underestimate the validity of the bear case or place too much faith in the management team. Maybe, there are unexpected macroeconomic or industry-specific shocks that throw the company’s business into disarray. Figure 1 shows four Long Ideas that have faced issues we did not anticipate and compares their performance to the S&P 500 (SPY).

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    1 Response to "4 Long Ideas That Didn’t Go as Planned"

    • Coleman Robinson

      good job..

      It’s refreshing to see somebody in your business who admits they’re less than perfect.

      I have been impressed with the breadth of securities that show up in your work. Stuff like FF, AXL, etc.

      With the situation in the equity market at the moment, I don’t mind buying stuff that may go( and does, go down). It is a comfort to know that the good stuff will rebound when things get back to normal. (Not the NEW normal, however).

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