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Learning that drives better investment decisions

My Worst Investment Ever May 2023

Ep692: Connor Steinbrook – Do Due Diligence Before Visiting a Real Estate Property

BIO: Connor Steinbrook is the Founder of the EXP realty Wolfpack Revenue Share Organization, with more than 2,700 agents operating in all 50 states and 12 countries. The group closed almost 10,000 houses and 3.5 billion in sales in 2022.

STORY: Connor came across a house in a high-priced area that was being sold for dirt cheap. It caught his attention, and he decided to buy it. It turns out the person who sold the house to Connor had killed the homeowner and stolen his identity.

LEARNING: Always be careful when going into properties to meet strangers. Before you go to view a property, ask the right questions and do due diligence.

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Ep691: Zachary Resnick – Invest in People Not Just Ideas

BIO: In 2013, Zachary Resnick began to make a living from playing poker cash games and investing in other poker players, providing a unique understanding of risk management that is largely shaped through leveraging volatility to outperform others in the high-risk, high-reward situations of poker.

STORY: Zach invested in two founders with a brilliant idea and overlooked the fact that they were not A+ founders. He ended up riding the company down by more than 80%.

LEARNING: Back people that completely blow you away. People are super important, especially at the earlier stage of the business that you invest in.

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Ep690: Chris Mamula – Take Responsibility for Your Financial Situation

BIO: After poor experiences with the financial industry early in his professional life, Chris Mamula educated himself in investing and tax planning.

STORY: Because Chris trusted his parents, he also blindly trusted their financial advisor. It was only after he stumbled upon better financial advice that Chris realized he’d wasted well over $100,000 in fees and another $100,000 in taxes.

LEARNING: Gain financial literacy and take responsibility for your financial situation. Don’t trust financial advisors blindly.

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Ep689: Michael Howell – Liquidity Is the Main Driver of Asset Markets

BIO: Michael Howell is CEO of CrossBorder Capital, a London-based FCA-registered, independent research and investment company he founded in 1996.

STORY: Michael was once in a meeting with the governor of the Bank of Thailand, who told him they would cut interest rates the following week. Even though all possible data showed this would be a wrong move, Micahel believed him. The bank didn’t lower the rates; instead, it increased them.

LEARNING: Don’t listen to what people say, particularly central bankers; watch what they do. When participating in macro investing, understand where you are on the liquidity cycle and where investors are positioned.

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Ep688: Brady Slack – What to Look For in a Coach or Mentor

BIO: Brady Slack is the owner of High Country Finance, LLC, a full-service tax and accounting firm based in Utah in the US. His purpose is to be a resource that helps everyone experience wealth while paying the fewest taxes possible.

STORY: Brady came across a coaching group on Facebook that was good at marketing its coaching package. He was fascinated by the package and bought it for $50,000. While it was a good package, it wasn’t a good fit for him as it didn’t align with his business goals.

LEARNING: Vet the mentor, coach, or advisor before you engage with them. Pick a mentor or a coach who embodies what you want to be. Don’t decide out of desperation or pressure.

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Ep687: Richard Lawrence – Avoid the Stock That’s the Hype of the Day

BIO: Richard H. Lawrence, Jr., is the Founder and Executive Chairman of Overlook Investments Group, an independent fund management company established in Hong Kong in 1991.

STORY: Richard invested heavily in a successful Korean company that brought him great returns until the founder died. The son took over and brought the stock to its demise.

LEARNING: If it’s not working, get out. Invest in a company with no or minimal debt. Operating return is the purest way to measure profitability.

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Ep686: Vineer Bhansali – You Create Real Value by Being Different

BIO: Vineer Bhansali is the CIO of LongTail Alpha. The firm was founded in 2015 to help provide risk mitigation strategies.

STORY: In early 1993, most investors held a significant long position on the Eurodollar futures contract, betting that interest rates would go down. Vineer decided to follow the herd. The Fed increased rates, and Vineer kept buying until he lost his investment.

LEARNING: Don’t follow the herd blindly. Success in the markets is all about timing. Have an investment framework within which you operate.

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Ep685: Brenden Kumarasamy – Follow the Data, Not Your Emotions

BIO: Brenden Kumarasamy is the founder of MasterTalk; he coaches ambitious executives & entrepreneurs to become the top 1% of communicators in their industry.

STORY: Brenden decided to promote his YouTube channel by sending 500 cold emails per day to university professors. After sending 2,000 emails, he received very negative responses. Instead of reviewing his strategy, he sent more emails for three months and got nothing out of it.

LEARNING: Follow the data and remove emotion as much as possible when making decisions. Make sure your marketing content offers undeniable value.

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Ep684: Julian Klymochko – Arbitrage Trades Don’t Always Turn Out to Be Risk-free

BIO: Julian Klymochko is the CEO and Chief Investment Officer of Accelerate, a leading provider of alternative investment solutions.

STORY: Julian got into an M&A trade where the acquirer had to stage a shareholders’ vote. This led to a hostile acquisition where the target company was bought by another acquirer that was not part of the deal. Julian made a significant loss in this trade.

LEARNING: Never put on an M&A trade that has the buy side vote. Arbitrage doesn’t always mean a riskless trade.

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Ep683: David Hay – The Importance of Range Expansion

BIO: David Hay has been employed in the securities industry since 1979 when he joined Dean Witter Reynolds, now Morgan Stanley.

STORY: A colleague told David about a business that was going to sell books online. David wasn’t convinced that the business had a competitive edge. So while his colleague invested $50,000 into this company, David chose not to invest. The company was Amazon. Had David invested then, he’d now be a multimillionaire.

LEARNING: Invest only what you can afford to lose. Keep challenging your thesis. Have a systematic quantitative framework to help you keep an open and agile mind when investing.

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Ep682: Rex Salisbury – Quitting Can Be a Very Important Skill to Exercise

BIO: Rex Salisbury is the Founder & General Partner at Cambrian Ventures, a pre-seed & seed focused fintech fund.

STORY: Rex’s biggest mistake ever was sticking with his initial career too long, even though he knew he shouldn’t have been working that job.

LEARNING: Invest in the skill that you want to move into as much as you. Build networks early in your career.

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ISMS 23: Larry Swedroe – Do You Allow Yourself to Be Influenced by Your Ego and Herd Mentality?

In this episode of Investment Strategy Made Simple (ISMS), Andrew and Larry discuss chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this fourth episode, they talk about mistake number five: do you let your ego dominate the decision-making process? And mistake number six: do you allow yourself to be influenced by herd mentality?

LEARNING: Don’t let your ego influence your decision-making. Stay disciplined and avoid becoming irrationally exuberant.

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Ep681: Harvey Sawikin – Do Your Own Homework

BIO: Harvey Sawikin is the co-founder and co-manager of Firebird. Launched in early 1994, Firebird’s funds were the first dedicated to the stock markets of Russia and the former Soviet Union.

STORY: Harvey invested twice in a bank and a vodka company without due diligence. Instead, he believed that other companies who had invested in those investments had done the job of verifying their viability. Harvey lost huge amounts in both investments.

LEARNING: You’ll fail if you rely on someone else’s due diligence and work. The most dangerous time to invest is when it’s the easiest to invest.

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Ep680: Paul Krake – Surround Yourself With Experienced People

BIO: Paul Krake is a global strategist focusing on mega themes of climate, China, digitization, and demographics.

STORY: Paul quit a prestigious job where he had seasoned mentors to start a hedge fund. After a few years, he realized he wasn’t mature enough or emotionally prepared to run a business on his own.

LEARNING: Surround yourself with people who are more experienced than you are. Think about all the scenarios where an investment can go wrong.

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Ep679: Noel Smith – Always Have Risk Measurements in Place

BIO: Noel Smith is the Chief Investment Officer of Convex Asset Management and the Head of Options Trading at Tanius Technology.

STORY: Noel and his partner invested in Enron stock whose price kept falling. Every time the price dropped, Goldman Sachs would come in and buy like 50,000 out-of-the-money calls. This made the partners hold onto the stock, eventually riding it to zero.

LEARNING: Have risk measurements in place that you know you will not break. Have some percentage that you’re willing to lose.

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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.