Value investing is risk aversion.

Most institutional investors feel compelled to swing at almost every pitch and forgo batting selectivity for frequency.

We suppose that could be considered a hedged position for the awards committee, one that would never occur in the hard sciences such as physics and chemistry, where a prize shared among three with divergent views would be an embarrassing mistake or a bad joke. While a Nobel Prize might well be the culmination of a life’s work, shouldn’t the work accurately describe the real world?

The near absence of bargains works as a reverse indicator for us. When we find there is little worth buying, there is probably much worth selling.

We buy expecting to hold a bond to maturity and a stock forever.

Always remembering that we might be wrong, we must contemplate alternatives, concoct hedges, and search vigilantly for validation of our assessments. We always sell when a security's price begins to reflect full value, because we are never sure that our thesis will be precisely correct.

A simple rule applies: if you don't quickly comprehend what a company is doing, then management probably doesn't either.