Tuesday, April 20, 2010

My Meeting with Michael Price

I spent the day with Michael Price of Price Capital Management and about 40 other advisors and investors in Houston this weekend. I have referred to Michael as my mentor in the past. As a manager of six hedge funds totaling over $200,000,000, he is one of the best in my book.


Michael's management style is both pragmatic and adaptive. I asked him if he could give a simple description of his investment style. What he tells his clients is simply that he invests his client’s money the exact same way he invests his own.

The key to Michael’s success is his belief that the much touted buy and hold strategies are to be shunned in favor of an active management style that seeks to reduce risk. He made it very clear that neither he nor his clients will ever ride a bear market down.

Michael believes that volatility is the investor’s enemy. Consequently, he structures his portfolios to minimize risk and to provide consistent performance year after year. So while some investors may brag about huge returns from time to time, the real key is consistency and sustainability over the long run.

I once again got to spend the whole day with Michael as well as having a great dinner with him and his wife and a few of his investors. I definitely feel privileged and appreciate whatever time I can spend with these marvelous people.

Most successful people in the investment community try to keep their investment methods and strategies under lock and key. Michael always shares exactly how he does what he does with his clients and fellow advisors. I ask so many questions of Michael that I sometimes feel embarrassed, but he answers each question with eloquence and generosity.

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