How to Get Lower Returns

Aug 2004 //
Risk vs. Volitility

A good investment environment for us is one in which we have opportunities to buy underpriced stocks and sell overpriced ones—i.e., an environment of moderate volatility.  Although some investors prefer lower volatility to higher volatility, I don’t think they necessarily appreciate that with lower volatility come lower returns, because with lower volatility there are fewer opportunities to buy low and sell high.