Investing

One of the reasons I can have a concentrated portfolio is because I understand what I own…. If you own six or eight great things, or at least great bets, that’s more comforting if you actually know what you own. If you don’t know what you own, if you don’t know how to value a business, you’re just going to react to the emotions, because you don’t actually understand what you own. But if you actually understand what you own, and the premise that you bought those things with is still intact, that’s actually the only way I think you can deal with the emotion, because you realize what you own is still good

—Joel Greenblatt 

In their classic 1934 text, Security Analysis, Benjamin Graham and David Dodd described “investment” as buying a security at a valuation that is associated with a reasonable expectation of acceptable long-term returns, based on a careful analysis of the relationship between the current price and expected future cash flows. In contrast, “speculation” means buying a security on the expectation that its price will advance. If you are not using well-defined and historically reliable valuation measures as a basis for investment, and you don’t have a well-defined and historically validated basis on which to expect speculative behavior from other investors, you’re probably gambling. 

— John Hussman

… the best solution for illiquidity is to build portfolios for the long term that don’t rely on liquidity for success. Long-term investors have an advantage over those with short timeframes (and I think the latter describes the majority of market participants these days). Patient investors are able to ignore short-term performance, hold for the long run, and avoid excessive trading costs, while everyone else worries about what’s going to happen in the next month or quarter and therefore trades excessively. In addition, long-term investors can take advantage if illiquid assets become available for purchase at bargain prices

— Howard Marks (https://www.oaktreecapital.com/docs/default-source/memos/selling-out.pdf)