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A PRUDENT MAN WILL THINK MORE IMPORTANT WHAT FATE HAS CONCEDED TO HIM THAN WHAT IT HAS DENIED Gracian Prudence and high leverage: how can they be combined? As each reporting period, be it calendar month or year, draws near its end, prudence takes precedence over high leverage. In public performance all eyes become the arbiter, in a private account there is only one arbiter - the "private client". Arguably unpublished performance has a better chance of success, for the simple fact that the pressure of producing double digit returns or other targets increases prudence and reduces the willingness to face high risks. There are some fortunate (and wise) investors who joined not at the highest, but at or near the lowest levels. Again, as one can see, performance is relative. One investor's sorrow may carry the seed for another investor's joy. Timing is everything. |
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