Stanley Druckenmiller recently did an interview with Bloomberg TV in which he called hedge fund investors idiots for paying 2 and 20, and for excusing poor performance by considering it risk-adjusted. He also said, nostalgically, that he and his peers were expected to make 20% a year (even in down markets).
Druckenmiller is right. There are too many people in the money management business who want to moderate volatility in exchange for a lower return. This is criminal. It is a crime to know that you are 100% right on the direction of a stock and not take a greater than 30% position.
Be intellectually honest about your stock picking ability. Do you know what you’re doing? If not, don’t concentrate. But if 8 out of 10 of your ideas have worked—in down, flat or up markets—you should be taking 30% plus positions.
Stableboy Selections 