Value Defined - An Interview With Eric Cinnamond

“Instead of relying on central banks as the foundation of my risk mitigation strategy, I plan to remain committed to my absolute return process and discipline.” –Eric Cinnamond

The world’s oldest investment philosophy, buy low and sell high, is not only the most logical but it is also most neglected when it matters.

Outside of the financial markets, we seek deals on everything. We drive past three gas stations to find one that is a nickel cheaper. We shop at the Costco in the next town instead of the grocery store around the corner. We haggle with car dealers for hours to save a few hundred dollars. Juxtaposed to rational consumer behavior, investors frequently take the opposite tack. Interest in buying stocks and many other financial assets tend to rise as prices increase and decline when they get cheaper.

Toilet paper, gasoline, and most other consumer items in which we seek the best price lack potential financial rewards. Said in current jargon they do not provoke FOMO or the “fear of missing out” in us. This condition which preys on hope and greed is a trap that drives investors to pay top dollar for some assets.

It is said that being a contrarian when markets are at major turning points can be lonely. To help those of you currently in this camp we introduce the rationality of professional value investor Eric Cinnamond (EC). In answering questions we posed to him, Eric provides insights into how he thinks about investing as well as the current investment environment. While he may not win a popularity contest, the logic he shares is irrefutable and extremely valuable.

Eric puts out a free investment letter that we consider a must read. His insight into small cap companies and the broader macro messages we can glean from these companies is invaluable. For access to his commentary, please email Eric at [email protected].

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