My Worst Investment Ever April 2023
ISMS 22: Toyota vs. EV Extremists Who Is Right?
What’s interesting about Toyota is that if you buy today, you get its future growth for free
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Ep678: Guillermo Cornejo – Don’t Underestimate the Value of Experience
BIO: Guillermo Cornejo is the CEO of Riders Share, the Airbnb of motorcycles he started while attending grad school at UCLA.
STORY: Guillermo had an insurance company handling claims for his customers. When he realized the insurance company had a 50% profit margin, he decided to start his own insurance business. This became a costly and challenging venture because he had no experience handling claims.
LEARNING: Don’t underestimate the value of experience.
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Ep677: Eugene Ng – Keep Playing the Long-Term Game of Investing
BIO: Eugene Ng is the Founder and Chief Investment Officer of Vision Capital & Vision Capital Ventures. He is also the author of the Amazon best-selling book Vision Investing: How We Beat Wall Street & You Can, Too!
STORY: Eugene invested in a three-day course in a bid to accelerate investment learning. The course involved playing a simulated stock investment game. Eugene lost in the early stages of the game due to overconfidence.
LEARNING: It’s okay to make a mistake. Keep playing the long-term game of investing.
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ISMS 21: CPI Collapsing Across the Globe
Will the global CPI slowdown continue?
Download the PDF with all charts and graphs
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Ep676: Nick Maggiulli – Don’t Buy Individual Stocks
BIO: Nick Maggiulli is the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he oversees operations across the firm and provides insights on business intelligence.
STORY: Nick invested in a stock he wasn’t familiar with just because his friends were doing it. He suffered a 78% loss.
LEARNING: Don’t buy individual stocks. Trust your gut.
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ISMS 20: Larry Swedroe – Do You Extrapolate From Small Samples and Trust Your Intuition?
In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this third episode, they talk about mistake number three: Do you believe events are more predictable after the fact than before? And mistake number four: do you extrapolate from small samples and trust your intuition?
LEARNING: Know your investment history. Don’t be subjected to confirmation or recency biases.
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Ep675: Larry Shumbres – Invest in What You Know and Is Regulated
BIO: As an accomplished entrepreneur and respected leader in the fintech industry, Larry Shumbres’s mission is to continuously enhance the investing experience for both advisers and investors through innovative technology.
STORY: Larry tried to create a hedge fund, 50% tied to digital gold and 50% tied to the top five cryptocurrencies but faced so many setbacks in the process. He spent too much time and money on this venture, which never paid off.
LEARNING: Don’t try to build an investment product around an unregulated industry. Don’t invest in what you don’t know.
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Ep674: Jesse Felder – Don’t Rationalize a Lousy Trade
BIO: After starting his career at Bear Stearns and then co-founding a multi-billion-dollar hedge fund firm, Jesse Felder left Wall Street to focus his energies on research and writing. Today he publishes The Felder Report and hosts the Superinvestors podcast.
STORY: Jesse found a cigar butt stock that was cheap and performed extraordinarily well in just a few months after he took a pretty sizable position. A friend convinced him to hold the stock long-term instead of short-term as he had planned. Government legislation affected the business, and Jesse lost about 50% of his investment.
LEARNING: Don’t rationalize a bad trade; get out. Be very careful when you’re in a situation that’s being primed by the government.
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ISMS 19: 5% March 2023 CPI Could Fall to 4% By Year-End; If Oil Doesn’t Fly
Remember that CPI is not inflation
- Mar 2023 US CPI was 5%, down from 6% in Feb and off its June 2022 peak of 9.1%
- Mar 2023, the food component was up 8.5% but has come off its Aug 2022 11.4% peak
- Mar 2023, the energy component was down 6.4, a massive fall from its 41.6% June 2022 peak
- In Mar 2023, all other items were flat MoM at 5.6%, down from Mar 2022 6.5% high
- Without a surge in oil US, we forecast CPI could end 2023 at 4%
Download the PDF with all charts and graphs
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Ep673: Sachi Wickramage – Target the Customer With the Problem at Scale
BIO: Sachi Wickramage is the Co-founder, COO & CPO of i4T Global, a disruptive Field Service Management ecosystem.
STORY: Sachi and his partner created an app that they thought would solve a problem for suppliers. Turns out, the suppliers didn’t need the app at all.
LEARNING: Sometimes, you have to take a step back to take a step forward. Understand the moment of intent for each of your customer segments.
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ISMS 18: Dave Collum – What Makes Your Investments Good or Bad
In this episode of Investment Strategy Made Simple (ISMS), Dave joins Andrew again as he shares more about his good and bad investments, among other things.
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Ep672: Vincent Deluard – Know the Difference Between a Trade and an Investment
BIO: Vincent Deluard is the global macro strategist for StoneX Group Inc., where he authors weekly commentary on global macro topics and advises pension funds on asset allocation.
STORY: Vincent decided to overleverage an ETF during the financial crisis of 2008 in the belief that the economy would bounce back. Interest rates, however, fell, and he lost 70% of his investment.
LEARNING: Take into account falling yields and falling inflation. Understand the difference between a trade and an investment.
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Ep671: Igor Yelnik – Think About Non-Market Risks
BIO: Igor Yelnik founded Alphidence Capital Ltd in 2020 and holds the positions of CEO and CIO. Alphidence is a systematic macro hedge fund management firm based in London, UK.
STORY: Igor’s company entered into a forward contract with one of Russia’s biggest banks and sold a very significant amount of the Russian ruble against the US dollar. The company made a considerable profit, but the bank decided not to pay. After a lengthy court battle, the company gave up and counted its losses.
LEARNING: Infrastructure and systematic risks can affect your trade significantly.
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Ep670: Bogumil Baranowski – Be Careful With Businesses in Secular Decline
BIO: Bogumil Baranowski is a founding partner of Sicart Associates, LLC, a New York City investment firm. He has almost two decades of investment experience.
STORY: Bogumil invested a lot of time and money in two companies that were drowning in debt, had poor management, and had a secular decline.
LEARNING: Just because it’s cheap, don’t compromise on debt, management, and secular decline. Debt is the number one risk for an existing company.
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ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss a chapter of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this second episode of the series, they talk about mistake number two: Do you project recent trends indefinitely into the future?
LEARNING: Hyper-diversify and rebalance your portfolio.
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ISMS 16: Top 5 EM Country Interest Rates – Normal China Yield Curve
Emerging Countries – China and Russia with stable rates, LT rates up only slightly, yield curve inversion less severe except Russia
- India, Korea, and Brazil raised ST rates significantly; China and Russia were stable
- LT rates are up slightly in all EM countries but increased less than World
- Brazil and Korea saw yield curve inversion recently, Russia remains worst
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ISMS 15: Top 5 DM Country Interest Rates – Steep US Inversion
Developed Countries – Vast DM Country increases in ST and LT rates, Japan stays an outlier, US looks worst based on yield curve inversion
- Aggressive ST rate hikes led by the US and followed by European developed countries
- LT rates seem to have peaked and fell MoM
- Japan with different policy sees almost no movements in both ST and LT rates
- US faced steepest inversion among developed countries; Japan maintains positive yield curve
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ISMS 14: Regional Interest Rates – Low in Asia, Egypt and Frontiers on Fire
Developed Market Regions – ST rates about to peak, LT rates are falling, inverted yield curve in DM Americas and Europe widened
- ST rates in DM Americas and Europe risen more aggressively than World, DM Pacific much slower
- Small increases in LT rate in all DM regions YoY, but fell MoM
- DM Pacific maintains a positive yield curve while inversion worsened in DM Americas and Europe
Emerging Market Regions – Massive ST rate hikes in ME&A and Frontier, LT rates more stable, no yield curve inversion in Asia
- ST rates exploded in ME&A and Frontier, EM Asia and Europe were more cautious in raising ST rates
- LT rates of all EM regions rose and remained above World; only EM Europe saw falling yield YoY
- Asia remains the sole EM region with no yield curve inversion, inversion looks painful for EM Europe, ME&A, and Frontier
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ISMS 13: Global Interest Rates – Hikes Slow, Inversion Signals Recession
World – End of DM ST rate rise, inverted yield curves remain, high rates in EM
- High ST global and EM rates, yield curve inversion
- ST rates up massively YoY, small increase in LT rates
- ST rate rise stopped in DM, DM LT rates fell MoM
- Yield curve inversion steepened, especially in EM
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Ep669: Peter Ricchiuti – Don’t Fall in Love With a Stock
BIO: Peter Ricchiuti is a graduate of Babson College and began his career with the investment firm Kidder Peabody in Boston. He later managed Louisiana’s $3 billion investment portfolio while serving as the assistant state treasurer.
STORY: Peter made the mistake of falling in love with a particular stock and hyped it to his clients. The company had no moat and couldn’t stand the competition. Peter’s reputation was severely affected after the stock price fell significantly.
LEARNING: Don’t fall in love with a stock. Diversification is key.
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Ep668: Jason Hsu – The Market Can Be Crazy for Longer than You Have the Conviction
BIO: Jason Hsu is the founder, chairman, and CIO of Rayliant Global Advisors (RGA), a global investment management group with over US$15+ billion in assets managed using its strategies as of June 30, 2022.
STORY: Jason bet against the GameStop short squeeze and learned that John Maynard Keyens’ saying that “markets can remain irrational longer than you can remain solvent” still holds true.
LEARNING: The market can be crazy for longer than you have the conviction to stay invested. Apply position constraints and diversify.
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Ep667: Shreekkanth Viswanathan – Qualitative Strengths of a Company Matter Too
BIO: Shreekkanth (“Shree”) Viswanathan is the founder and portfolio manager of SVN Capital, a Chicago-based, concentrated, long-only, global equity-focused fund.
STORY: Shree’s biggest mistake is an error of omission. That is, after studying a particular business, he decided not to invest in it for various reasons. The stock turned out to be a multi-bagger a couple of years later.
LEARNING: The qualitative strengths of a company are not always readily apparent in the financials. Get out and work in business; it will make you a better analyst and investor.
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DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.