Key insights
- The author argues that value investing is inferior to growth investing, citing the inefficiency of markets in the short term and the potential for higher returns through a growth-focused approach. They believe fortunes are made by understanding market sentiment and developing non-consensus theses, rather than relying on diversification and value principles. This perspective suggests a preference for higher-risk, higher-reward investments, potentially leading to increased volatility in individual portfolios.
Value investing is based on the efficient market hypothesis. Anyone who has been in the market know that hypothesis is bullshit (at least in the short term).
Fortunes are won on lost based on sentiment and understanding market psychology, on concentration over diversification, and on being able to develop a non-consensus thesis.
Over 10 years, sure you can get 2-3x using value-based approach, but I don't get out of bed for 2-3x over 10 years. If you're looking to 10-100x, you must embrace the growth mindset - which is where the truly great investors like Druckenmiller stand.