My Worst Investment Ever October 2023
Ep743: Sam Burns – Understand What You’re Really Betting On
BIO: Sam Burns is Chief Investment Strategist at Mill Street Research, an independent investment research firm based near Boston, MA. For 25 years, he has focused on global asset allocation and quantitative stock selection, primarily for institutional investors.
STORY: Sam decided to short-sell options that went horribly wrong after the Russian default. Even though he knew how options work in principle and that he could lose money, Sam didn’t have a plan for what if some geopolitical event happened, causing the market to fall suddenly. And so he lost a whole lot of money in the trade.
LEARNING: Understand what you’re really betting on. Every option trade is about volatility. Have a plan for what could go wrong and what you’ll do about it before you look at the headline to see what’s happening.
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Ep742: Jay Pelosky – You Can Be Right but at the Wrong Time
BIO: Jay Pelosky has over 35 years of both buy and sell side financial market experience. While at Morgan Stanley, he was ranked # 1 in Institutional Investor in Global Equity Strategy and Global Asset Allocation Strategy.
STORY: In the 90s, Jay was bullish about Mexico even though people were concerned about foreign currency debt and the country’s risk of devaluation. He remained adamant that people shouldn’t worry because Mexico wouldn’t devalue, and everything would be fine. Lo and behold, the Mexican government devalued in the middle of the night.
LEARNING: You can be right but at the wrong time. A forward-thinking approach is precious as an investor. You must have a thick skin to be an investor because you’ll get stuff wrong often.
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Ep741: Reuben Mattinson – Have Solid Proof That Trading Is Happening and It’s Regulated
BIO: Reuben Mattinson graduated with a degree in physiotherapy in 2012. He followed this up in 2013 with a degree in Science teaching. During this time, Reuben began building his first company, RJM Tax Exemption.
STORY: Reuben got attracted to a company doing forex crypto trading and invested hundreds of thousands of dollars even though he had no solid proof that the trading was happening and that it was regulated.
LEARNING: Have solid proof that trading is happening. Ensure that your money is being held in a regulated brokerage or platform. Ensure the trader is using proven risk management strategies.
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Ep740: Jerry Parker – Understand Your Investing Capabilities and Limitations
BIO: Jerry Parker started his trading career in 1983 in the Richard Dennis Turtle Program. He started Chesapeake Capital in 1988. Chesapeake manages about $200M in private funds, mutual funds, ETFs, and managed accounts.
STORY: Jerry has had some stinker investments in real estate and gold over the years. Two things that have cost him money in his real estate investment are overpaying and not being patient. Often, Jerry would find himself buying homes by speculating and thinking that he knew what he was doing, only to realize that he didn’t.
LEARNING: Understand what you’re capable of and your limitations as well. Be afraid of situations you’re unfamiliar with and assume the worst.
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ISMS 33: Fed Success! High LT Rates & Recession Coming
Fed Success! High LT Rates & Recession Coming
- World yield curve inversion is falling because of rising LT rates
- Rising LT rates are reducing yield curve inversion fastest in DM Americas and DM Europe
- Rates are high across EMs, crushing in FMs, and low in EM Asia
- France and Germany ST rates rising; DM countries have past peak yield curve inversion due to rising LT rates
- Rates are low in China, which, together with India, never inverted
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Ep739: William Cohan – Get the Numbers Right Before You Invest
BIO: William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven non-fiction narratives, including his most recent book called Power Failure: The Rise and Fall of an American Idol.
STORY: In 1990, William asked a trader to buy him 10 shares in Berkshire Hathaway, thinking a share was selling at $1,200, only to be told it was $12,000. He decided to keep two shares and sold the other eight. Had William invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.
LEARNING: Get the numbers right before you invest.
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Ep738: Neil Johnson – Take the Profit When You Can
BIO: Neil Johnson is a renowned finance expert with over 30 years of experience in investment banking, merchant banking, and research analysis in Canadian and UK capital markets.
STORY: Neil invested in an internet company building website templates when the internet was just starting. The company filed to go public, but the financiers kept delaying the process and never went public. Six months later, the company went to zero. Neil lost his entire investment.
LEARNING: Take the profit when you can. Take some money out and play with the rest. Do your due diligence.
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Ep737: Jeremy Deal – Use Differentiated Insight to Evaluate an Investment
BIO: Jeremy Deal manages the Survivor & Thriver Fund LP, a private investment partnership for high-net-worth families globally.
STORY: In 2012, Jeremy bought Tesla for about $2 a share and sold it eight months later for 50% more. He didn’t have a real differentiated insight to continue believing in Elon Musk’s ability to convince consumers to keep buying Teslas even though the product was of mediocre quality initially.
LEARNING: Use differentiated insight to evaluate an investment. When evaluating a company, see the bigger picture and look at it for what it is, not just how expensive or cheap it is.
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Ep736: William Bernstein – Never Invest Based on the Headlines
BIO: William Bernstein is a neurologist, a co-founder of Efficient Frontier Advisors – an investment management firm, and has written several titles on finance and economic history.
STORY: William lost money after investing in palladium futures under the belief that a couple of physicists had perfected the technique of cold fusion to get helium.
LEARNING: Never invest based on the headlines. Something that everyone knows isn’t worth knowing.
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ISMS 32: 5 Signs of Impending Recession
5 Warning signs of impending recession
Warning Sign #1 – Inverted yield curve
Warning Sign #2 – Peak employment
Warning Sign #3 – Slowdown in bank lending
Warning Sign #4 – Leading indicators falling & bankruptcies rising
Warning Sign #5 – Weakening consumer
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ISMS 31: Global CPI saw 2nd MoM uptick in August
Will the global CPI slowdown continue? Or will it rebound?
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Ep735: Swen Lorenz – Carefully Consider Liquidity in Your Portfolio
BIO: Swen Lorenz is a passionate public equity investor and the face of Undervalued-Shares.com. With over 30 years of experience in investing, Swen has a knack for finding exciting investment opportunities in very unexpected places, which he discovers while traveling the globe.
STORY: Swen had a 12.5% stake in a German fund manager performing well. A competitor wanted to buy up companies in that space and approached Swen to ask other shareholders if they would sell. The company didn’t like this, asked the regulator to look into Swen’s affairs, and accused him of all sorts of things. It ended with Swen narrowly losing a contentious proxy battle.
LEARNING: Carefully consider the liquidity of the investments you’re holding. Going above the disclosure threshold as an investor is dangerous.
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Ep734: Paul Merriman – What You Do When You Are Young, Is Golden
BIO: Paul Merriman is a nationally recognized authority on mutual funds, index investing, and asset allocation. After retiring in 2012 from Merriman Wealth Management, which he founded in 1983, Paul created The Merriman Financial Education Foundation, dedicated to providing investors of all ages with free information and tools to make better investment decisions.
STORY: Paul has had a series of bad investments, and they were all driven by emotions. It wasn’t until Paul got the emotion out of that process that his money started to grow.
LEARNING: The first five years of the money you put away can, theoretically, represent 40% of the value of your portfolio over the long term. Start investing early so that you can benefit from the compounding effect.
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Ep733: Vikram Mansharamani – Liquidity Will Not Always Be There
BIO: Dr. Vikram Mansharamani is a global trend-watcher who shows people how to anticipate the future, manage risk, and spot opportunities.
STORY: Vikram invested in a small commercial condo that he hoped to rent to Ph.D. students, but they weren’t interested. He had to sell it after a few years of no income. He took a 50% loss.
LEARNING: Liquidity is not a constant. If the timing of your thesis is off, then you’re wrong. The market can stay irrational longer than you can remain liquid.
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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.