Baker says the key trait for public equity investors is the ability to be rational when wrong.
“If I could know one thing about a person to know whether or not they would be a good public equity investor, it would simply be, are you capable of being rational when you're wrong?”
Baker says great public equity investors are often wrong more than right, with best batting averages around 55%.
“They're wrong more than they're right, but because they make more money when they're right, they still have a great track record.”
Baker recounts how Sunu Kalra's simple iPod vs Walkman comparison gave him conviction to hold Apple long-term.
“And as soon as I heard that, it's like, wow. It really doesn't matter. Apple went on to be seven x, 10 x, 15 x from there.”
post Baker argues 'I don't know' are the three most important words in investing, not 'margin of safety'
https://x.com/GavinSBaker/status/2082169852408856615