In a recent conversation about asset allocation with an astute growth investor, I was surprised he dismissed the possibility of a socialist as President. He simply could not see that happening and, therefore, it could not serve as a reason for changing a traditional 60% equity/ 40% bond mix in a target allocation. He may be right about that risk which was known, but what about something unknown like Covid-19?
I deeply respect smart money opinions, but I am a value investor and value investors are trained to expect the unexpected. At the heart of value investing is a conviction the future is unknowable. Whether it is a socialist in the White House, Covid-19, or Trump defeating Clinton, Brexit, or a Saudi oil price war, investing is merely “speculation” for guys like Howard Marks, Joel Greenblatt, Warren Buffet, Bruce Greenwald, and Seth Klarman, unless it has a margin of safety.… Read this article