Signals & Noise

Drukenmiller recounts buying $6 billion in tech stocks near the dot-com peak and losing $3 billion in six weeks.

Those who have done our Well 2 course will recognise this story. This is Stanley Drukenmiller, one of the world's greatest investors. Groupthink can be so powerful that even the best get caught in the fever. As Robert Shiller said, it spreads like a virus. It is contagious.

The most famous contrarian who can resist is Warren Buffett. But even Munger admitted that years before the GFC they bought into a "great" office furniture company, only to realise too late that the great numbers were partly a product of the property bubble bleeding into commercial real estate.

We appreciate valuation as a simple but effective tool. As Buffett says: price is what you pay, value is what you get.

This week's themes span global trade fragmentation, Australian property, defence spending, the compounding framework, and the commodities story unfolding around the Strait of Hormuz.