Prompted by all the “Mr. Market” manic-depressive excitement about Facebook, tech, and the world at large, I’m thrilled to offer an exclusive excerpt from a new 81-page book: A Few Lessons for Investors and Managers from Warren E. Buffett.
In it, author Peter Bevelin distills hundreds of pages of annual reports and Berkshire’s An Owner’s Manual into bite-sized principles and key quotes. Of this lightweight handbook, Buffett himself says, “It sums up what Charlie and I have been saying over the years in annual reports and at annual meetings.”
For this post, I’ve chosen one of my favorite chapters, which relates to Buffett’s criteria for investments (and acquisitions): Business Characteristics: The Great, the Good, and the Gruesome… Read More
Part I explained how, instead of getting an MBA, I invested the tuition dollars into angel investing. To recap, my current stats for the two-year “Tim Ferriss Fund” look like this:
15 or so total investments
2 successful “exits”, or sales (including my own company)
If we look at the value of my remaining start-ups on paper, based on subsequent funding and valuations, the portfolio is probably up well over 4x. This means nothing (remember Webvan?), but it’s fun to look at the spreadsheet.
This post will look at how I’ve found deals, how I filter deals, and the rules I’ve set for myself. The latter can teach broader business lessons, even if angel investing never enters your life… Read More
Too many choices. Using automation to reduce choices and dominate your money.
I have known Ramit Sethi for several years now, first through PBWiki, which he co-founded, and later as someone I turned to with questions about the world and workings of finance. In a world of gurus who promote one method of investing and then follow another, it was refreshing to talk with someone who was willing to share real numbers and case studies from their experiments.
Ramit and I have also able to share a bottle (OK, many bottles) of wine and laugh about the downstream effects of titles we’ve tested and chosen, as both of our book titles sound like scams to most people: The 4-Hour Workweek and I Will Teach You To Be Rich.
Despite this self-imposed handicap, Ramit’s blog and advice have been featured in media such as NPR, The New York Times, and Fortune magazine. I specifically asked him if I could excerpt a few of the diagrams and call scripts from his new book. He and I both share a love of templates that enable us (and others) to duplicate results without reinventing the wheel… Read More
Is it possible to become invisible without breaking the law? (Photo: gravitywave)
LOS ANGELES, MID-JUNE 2008
Sitting on a plush couch in the neon-infused nightclub, I asked again:
“What’s it about?”
Neil Strauss glanced around and looked nervous, which I found strange. After all, we’d known each other for close to two years now. In fact, he was – as New York Times bestselling author of The Game and others – one of the first people to see the proposal for The 4-Hour Workweek and offer me encouragement.
“C’mon, dude, give me a break. Don’t you trust me?”
“Guilt. That’s good. Use guilt,” Neil said. But the Woody Allen approach wasn’t working.
“I can’t let the meme out early” he said, “I trust you—I’m just paranoid,” he offered to no one in particular as he downed another RedBull. So I fired a shot in the dark.
“What, are you writing about the 5 Flags or something?”
Neil’s heart skipped a beat and he stared at me for several long seconds. He was stunned.
“What do you know about the 5 Flags?”
I was in.
The 5 Flags
Neil’s new book, Emergency, teaches you how to become Jason Bourne.
Multiple passports, moving assets, lock-picking, escape and evasion, foraging, even how to cross borders without detection (one preferred location: McAllen, Texas, page 390)–it’s a veritable encyclopedia of for those who want to disappear or become lawsuit-proof global citizens… Read More
The Daily Show: Jim Cramer Interview – Hulu. Having trouble? Try installing AnchorFree, and if that fails, get a taste with this clip.
The unanimous conclusion after stockmarket pundit Jim Cramer appeared on The Daily Show with Jon Stewart last week was: Jim got his ass kicked.
Be that as it may, were the facts straight? I will defer here to Mark Hanna, Trust Officer at Clayton Bank and Trust in Knoxville, TN. I first met Mark at the 2008 Berkshire Hathaway Annual Shareholder’s Meeting, where he was wearing a manager badge and discussing complex financial instruments.
Clayton Homes was sold to Berkshire Hathaway in 2003, and founder Jim Clayton hired Mark to start a Trust Department within his bank — Clayton Bank and Trust — to manage proceeds from the sale. Mark didn’t want me to share his personal annualized track record, but trust me: it’s phenomenal… Read More
“If the market felt fidgety, if people were scared or desperate, he [senior Salomon Brothers bond trader] herded them like sheep into a corner, then made them pay for their uncertainty.”
-Liar’s Poker, Chapter: A Brotherhood of Hoods
There were 4-6 screens per person, and chairs were lined up at a single 30-foot desk in hierarchical pecking order. Commands would come down the line and trades were made.
“Who the f*ck are you?” asked one of seniors, swiveling back to his glowing screens before I could answer.
It was my first time inside one of the largest investment banks on the planet, and I was just observing a friend in the hopes of learning something. Before I knew it, lunch had arrived and a 20-minute break was announced in a poetic slew of 4-letter words.
“Name a company.” It was a voice I didn’t recognize, but it was clearly directed at me.
“Uh… sorry. Excuse me?” I asked to the room and no one in particular.
“Name a company.”
“Any company — doesn’t matter.”
“OK. Ah… Genentech.” It was a shot in the dark with no rhyme nor reason.
“F*ck Genentech!!!” came the chorus.
“OK, we just sold 100,000 shares of Genentech. F*ck those guys. Lost a ton on them last week.”
100,000 shares of Genentech sold because a no-nothing guest had pulled the name out of thin air.
That was my introduction to how truly rigged the stock market is… Read More
I first saw this video at the May 2nd, 2008 Berkshire Hathaway shareholder meeting. Prophetic and not to be missed.
I’ve learned quite a few things in the last 18 months of exploring—and experimenting with—the world of investing. This post is my first attempt to share the findings.
The lessons have come from not just reading books, but trial and error, and picking the brains of some diverse and fascinating people:
-Warren Buffett, the richest man in the world, and CFOs/financiers at Berkshire’s portfolio companies
-Chief economists at top investments banks
-Dot-commers who have turned $40,000 into $2,000,000 in stocks using massive leverage
-Conservative entrepreneurs (still self-made millionaires) with all-bond portfolios
-Money managers of the ultra-rich and ridiculously famous
-Ivy league professors who not only trade options exclusively but also bet up to $500,000 per night as no-limit hold ‘em poker players.
In all cases, excluding blog reader feedback (how could I know?), the principles I will offer are from people who have made millions in their respective investments, not armchair quarterbacks (advisers) who take a management fee from the people willing to take real risks… Read More
I’m in the process of preparing a series of posts on the investment lessons I’ve learned in the last 18 months.
To preface the series with some humor (and insight), I thought one particular farewell letter would be appropriate. The author is hedge fund manager Andrew Lahde, who produced a one-year 866 percent return betting on the subprime mortgage collapse.
Today, he announced he was leaving the hedge fund business with a rather hysterical letter… Read More
The richest man in the world — $62 billion and counting. (Photo: CBS/AP)
“Excuse me. Where is the most difficult to reach microphone?”
I was out of breath from running up the steps but had managed to find one of the microphone stands, manned by two headset-wearing volunteers.
More than 10,000 people had waited on the sidewalks overnight to be first in the doors of the Berkshire Hathaway annual shareholder meeting, and I had made a choice: I would go for the mics instead of the front row.
Given a choice of shaking Warren Buffett’s hand for a five-second photo op or asking him a question, I opted for the latter, and in ten seconds, I’d be sprinting to the corner of the top floor. After all, lunch with Buffett once auctioned off for $620,100, and I’d planned it all out.
These are my notes on what happened and what I learned… Read More