Lack of Commitment on the Short Side Hurts Offensive Position Does Shorting Make a Person a Good Analyst?

Preparing for the Worst by Hedging

We have consistently prepared for the worst, incurring significant hedging costs on an ongoing basis. While many of our holdings did not truly require hedges in order to be attractive, and while many of our hedges ultimately proved unnecessary because the anticipated risks failed to materialize, our hedges were quite valuable as enablers, in that they gave us the comfort and the confidence to, at times, incur fairly concentrated positions that have produced such excellent long-term, risk-adjusted results.