Lee Ainslie Quotes
102 Lee Ainslie Quotes
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[In 2007.] We’re very thoughtful of liquidity.
Lee Ainslie
[In 2007.] When you go through a prolonged period of losing money on the short side, you tend to become much more defensive, and we started to think more about where we would not lose money, instead of where we would make money.
Lee Ainslie
[In 2007.] We added significant value on the short side in 2006.
Lee Ainslie
[In 2007.] In certain situations, it’s really important on the short side to have the courage to maintain if not increase the position size.
Lee Ainslie
[In 2007.] We go to great lengths to evaluate a management team’s ability to think strategically and their desire to maximize shareholder value.
Lee Ainslie
[In 2007 on having been long in 1995 NeoStar Retail Group which at the time was the largest retailer of video games and his belief that with Sony set to launch it’s first PlayStation game console that the video games market was about to grow faster. Unfortunately however NeoStar went bankrupt.] We didn’t ride it all the way down, but we rode it closer than I care to remember. That was a case in which the rest of the world was right, and we were wrong.
Lee Ainslie
[In 2007 on Lexmark supplying printers basically at cost to Dell to bundle and hoping to make up the profit on the ink cartridge sales but then finding the Dell customers already had superior customers and were not buying the ink cartridges.] This was an instance where things didn’t work in reality as well as they appeared to on paper.
Lee Ainslie
[In 2009.] One thing I learned from
Julian Robertson is the concept that there are no ‘holds.’ Every day you’re either willing to buy more at the current price or, if you aren’t you should redeploy the capital to something you believe does deserve incremental capital. I sometimes hear: ‘If my target price is $45, why should we sell at $43?’ The answer is simple: I believe we have better uses for that capital than getting the last few percentage points in the move from $43 to $45.
Lee Ainslie
[In December 2011.] It will be interesting to see what happens when QE2 disappears to have such a big active participant withdraw.
Lee Ainslie
[In February 2012.] In Maverick's eighteen-year history, we have never suffered a darker year than 2011.
Lee Ainslie
[In February 2012.] The fact that recent volatility surpassed anything seen in a fifty-year period is staggering.
Lee Ainslie
[In 2012.] We’re a team of peers. There is no king of the hill.
Lee Ainslie
[In October 2013.] I had a degree in engineering.
Lee Ainslie
[In October 2013.] You have to build a culture where people really want to be part of your team.
Lee Ainslie
[In October 2013.] I think anyone that’s been fortunate enough to have a level of success feels a duty to make sure that they’re doing their part to help other’s who have been as fortunate.
Lee Ainslie
[In January 2014 on how he got started in investing.] When I was in eight grade, my father was the headmaster of a boarding school, and the school decided to start an investing club. I thought that sounded fun and interesting, so I asked if I could join that club, which they let me do. I started keeping a paper portfolio, and my interest developed from there.
Lee Ainslie
[In January 2014 on working as a Tiger Cub with Julian Robertson.] I certainly learned a great deal from Julian but also from my peers there… We all had different pockets of knowledge about investing, not only in terms of sectors and industries, but also different ways of looking at and thinking about stocks. We spent a lot of time comparing notes and playing devil’s advocate to each other, and so the collective talent of the team ended up being a great benefit to my investing education.
Lee Ainslie
[In January 2014] At one point in time, I read every single investing book I could get my hands on. Then Amazon came along, and the number of investment books has grown exponentially!
Lee Ainslie
[In January 2014] Whatever it is, I’m hopefully learning every day.
Lee Ainslie
[In January 2014] I believe I’m a much better investor today than I was twenty years ago, and I really have my colleagues to thank for that more than anything else.
Lee Ainslie
[In January 2014] At Tiger you were essentially expected to be the foremost authority on a small number of stocks. For the investments you oversaw, no other public investor should know more about those companies than you did. This objective was possible because most folks were responsible for anywhere from a handful to a couple dozen positions in the portfolio.
Lee Ainslie
[In January 2014] There’s a trade-off with having very narrow expertise. If one focuses on just a very small number of names they can develop a deep understanding of certain companies but may lose perspective of how that opportunity set compares to a broader universe.
Lee Ainslie
[In January 2014] Today, we generally hold about four investment positions per investment professional. At most hedge funds, this ratio seems to average somewhere between 10 and 20. This gives us a significant advantage in terms of the quality and depth of our due diligence behind each investment decisions and how familiar we are with the companies in which we invest.
Lee Ainslie
[In January 2014] Evaluating people and evaluating securities are two different skills.
Lee Ainslie
[In January 2014] This is a very stressful business. We are all human, and we all make mistakes. How one responds to those mistakes and whether someone can keep a level head and make thoughtful decisions is critical.
Lee Ainslie
[In January 2014] How does one respond to a few big wins? With some folks, early success leads to inflated confidence that may slow the recognition of a mistake.
Lee Ainslie
[In January 2014] Whether you’re driving a Porsche or a Ferrari doesn’t matter too much if the speed limit is 65 MPH.
Lee Ainslie
[In January 2014] I think compared to many other hedge funds, we may have a longer term timeframe and tend to think very strategically when evaluating different industries and companies. We are typically looking to understand where a business will be in two to three years. However, this is different from our average holding periods, as often others begin to recognize some of the elements of the investment that we have been focusing on and the position becomes incrementally less attractive, and of course other times we recognize that we’re wrong.
Lee Ainslie
[In January 2014] On the long side, our typical holding period is still over a year, and on the short side it is closer to nine months.
Lee Ainslie
[In January 2014] When a business is generating a strong return on capital and the cash flow stream can be reinvested effectively, then we may be able to own that stock for several years.
Lee Ainslie
[In January 2014] The greater level of diversification of our short portfolio reflects the riskier nature of these investments and that these positions turn over more frequently…
Lee Ainslie
[In January 2014] We believe that having responsibility for both longs and shorts sharpens analytical judgment and helps a team build a more complete understanding of a particular industry.
Lee Ainslie
[In January 2014] In my experience, people that are solely focused on shorts tend to become extreme pessimists. They look at any situation and immediately start to find all of the things that may go wrong, while quickly overlooking important potential positives.
Lee Ainslie
[In January 2014] Shorting is more challenging for several reasons, one of which is that the market tends to appreciate over time. So even talented short-sellers who are generating alpha tend to get rather frustrated over time.
Lee Ainslie
[In January 2014] I think that valuation is a critical component of understanding where investment opportunities may lie. But I think many ‘value investors’ purely focus on that metric and may ignore other important considerations.
Lee Ainslie
[In January 2014] It’s one thing if you have a very cheap stock and reasons to believe that the cheap valuation will not persist: there’s a new management team, there’s an activist shareholder, they’re restructuring, they just made a decision to buy back stock…
Lee Ainslie
[In January 2014] I believe it is important to identify a catalyst that should benefit the valuation. The approach of simply identifying a very cheap stock that often has been cheap for a while and then just crossing your fingers and hoping the world will wake up and be willing to assign a higher valuation one day soon is not a very effective approach in my judgment.
Lee Ainslie
[In January 2014] While we place great emphasis on valuation in our investment decisions, valuation alone should never be the driver of either a long or a short investment.
Lee Ainslie
[In January 2014] We have always considered our universe to be every stock in the world that trades more than $10 million a day and has a $1 billion market cap.
Lee Ainslie
[In January 2014] The most critical factor that we’re trying to evaluate is the quality of management – their intelligence, competitiveness and, most importantly, their desire to create shareholder value.
Lee Ainslie
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