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How to make and lose fortunes
I co-ran the #1 mutual fund in the world, up 495% in 1999
Why am I not sitting on a beach on my own island?
Or at least selling courses on investing?
Or tweet about investing? ... except this thread
I co-ran the #1 mutual fund in the world, up 495% in 1999
Why am I not sitting on a beach on my own island?
Or at least selling courses on investing?
Or tweet about investing? ... except this thread
1. Know your style
I could see a trend and wait like a big cat for the contrarian moment to enter.
I thought semis couldn't go any lower in July 1996 and chose $AMD as my play as it had more worries about solvency than $INTC.
Right time, right stock.
I could see a trend and wait like a big cat for the contrarian moment to enter.
I thought semis couldn't go any lower in July 1996 and chose $AMD as my play as it had more worries about solvency than $INTC.
Right time, right stock.
2. Investing for a time vs investing for all time
In 1999, I co-ran a fund up 495% vs tech index up 150%
Fundamentals could not keep up
Lesson: momentum can keep working but in a different sector
Momentum favored energy and staples the next year, a good trade
In 1999, I co-ran a fund up 495% vs tech index up 150%
Fundamentals could not keep up
Lesson: momentum can keep working but in a different sector
Momentum favored energy and staples the next year, a good trade
3. Know your style, and track drift
My style was investing in strong trends using contrarian entry (timing and stock selection)
Adjusting to momentum in 1999 caused my style to drift
Who was I? Contrarian? Momentum? Thematic?
Then I met a new (to me) shiny genius...
My style was investing in strong trends using contrarian entry (timing and stock selection)
Adjusting to momentum in 1999 caused my style to drift
Who was I? Contrarian? Momentum? Thematic?
Then I met a new (to me) shiny genius...
4. Genius exposure and my wrong takeaways
I jumped on the chance to learn shorting from a genius
I love tech and moved to a phenomenal hedge fund end of 1999
Great leader, great timing, a great time to short tech, what a ride!
Now everything looked like a short trade
I jumped on the chance to learn shorting from a genius
I love tech and moved to a phenomenal hedge fund end of 1999
Great leader, great timing, a great time to short tech, what a ride!
Now everything looked like a short trade
5. Study people and their records
My "edge" was intuitively knowing the temperature of people
The genius who taught me to short had made his fortunes on the long side
My exposure to him was during down market years in tech
Where money was made shorting stocks
My "edge" was intuitively knowing the temperature of people
The genius who taught me to short had made his fortunes on the long side
My exposure to him was during down market years in tech
Where money was made shorting stocks
6. Wait, how did I get here?
In 1999, I used my own playbook:
Get in before something is in favor, ride the wave, get out when opportunities are greater somewhere else.
My strength was picking winners on sale
I learned to short and took away the wrong lesson
In 1999, I used my own playbook:
Get in before something is in favor, ride the wave, get out when opportunities are greater somewhere else.
My strength was picking winners on sale
I learned to short and took away the wrong lesson
7. Lessons from shorting
Not everything is a short
Compounding works both ways
Shorting stocks is brutal in up markets
Learning to short can make you look at everything as a short
Shorting's opportunity cost is the distraction from finding great companies
Not everything is a short
Compounding works both ways
Shorting stocks is brutal in up markets
Learning to short can make you look at everything as a short
Shorting's opportunity cost is the distraction from finding great companies
8. Shorting is the ultimate contrarian move
It is controversial, often used as a tool for more than investment
When experts write about the pains of shorting is often when it works, but not always (can be in the middle of a big multi-year move)
It is controversial, often used as a tool for more than investment
When experts write about the pains of shorting is often when it works, but not always (can be in the middle of a big multi-year move)
9. Everything has its time
Shorting
Buying on dips
Contrarian buys and sells
Investing in major disruptive themes
Shorting
Buying on dips
Contrarian buys and sells
Investing in major disruptive themes
10. Takeaways
Learn about business models
A stock is a share of the business
Understand crowd psychology
Stock prices follow emotions for longer than imaginable
Find what works over time and track style drift
Are we all merely our last trade?
Learn about business models
A stock is a share of the business
Understand crowd psychology
Stock prices follow emotions for longer than imaginable
Find what works over time and track style drift
Are we all merely our last trade?
