Stop reading and play some football!

So since you are at the investingbythebooks site, I guess you have read a few books. But besides reading books ... What else can you do to become a better investor, and not to read another book about value investing?

Lets compare with something else, for example football.  “A huge football fan that knows every tiny detail about the game. He knows exactly what is going on, what the players are doing right, what they are doing wrong. But if you put him on the field, he can't throw the ball because he never did it in his life before.”  It is one thing to know what you need to do, but it is another to execute. Only way to learn how to execute is to actually play the game, or in this case, actually invest your own money”

 Below is a text who is heavily inspired from Geoff Gannon, original here, https://www.gurufocus.com/news/144029/invest-with-style

 

1) Have Skin in the Game 

Buy stocks you pick yourself. Stocks you can only blame yourself for if they lose you money. The hard work isn’t just analyzing a company and handicapping the situation. It’s putting your own money — and your own ego — on the line.


2) You have to have skin in the game.

You have to risk taking a self-inflicted blow to your money and your mind.  The most important part of investing is trying, failing, experimenting, and adapting on your own. Watch yourself work under real world stress. And be brutally honest about what you see.

3) Keep an Investment Diary

Take some time every day or at the least once a week and just write down whatever thoughts you have. Stocks you are looking at. Months from now and years from now, your memory of what you were feeling and what you read in that journal won't match. And you may not recognize the person who wrote those things. You'll have changed as an investor without realizing it.

4) Keep an Investment Bucket List

If you had to put your family’s money into five stocks before you died, which five stocks would they be? Study companies regardless of their stock price. Keep a list of your favorite companies. Imagine the following limitations:

· You have to invest all of your family's net worth in stocks.

· You can never sell a stock once you buy it.

· You can only buy five stocks between now and the day you die.

It’s amazing how quickly this exercise will force you to distill your thinking.


5) Work more

When authors list Warren Buffett's investing secrets they don't mention that he read every book on investing in the Omaha public library by the age of 11. That he owned stocks in high school. That he took a train down to Washington and knocked on GEICO's door. That he went to annual meetings of companies he knew Graham owned stock in even though he was only a student and Graham himself wasn’t going. Which brings me to the Buffett did that you can do too: 1. Work an absurd amount. 2. Become an expert .

6) Become an expert

Become an expert. You've studied some different stocks now. You've had a taste of Indian stocks, U.S. stocks, Japanese stocks, micro caps, big caps, net-nets, hidden champions, etc. What interested you? What stock was the most fun to research? What did you think you really "got"?  Think about what area you might want to learn more about.  Then become an expert in that area. Pretty soon, you'll develop your own investing style.

7) Invest with Style

Do you buy turnarounds? Hidden champions?  Wide moats?  Brands?  Companies with surplus cash? Family controlled companies? Food and beverage companies? Companies with mind share?  With cutting edge tech?  With a lack of change?  Young companies?  Old companies? Low cost operators? Stocks in industries with little price competition?  Stocks with an activist banging at the gates?

8) One example – of someone with an investment style…

One example of  investment style”, watch an interview — any interview — with Tom Russo, for example he gave three lectures at Columbia. He is a buy and hold investor. He is a global investor. He likes brands. He likes food and beverage companies. And he likes family controlled companies. He wants a high return on capital and the ability to reinvest that capital for many, many years to come. He cares about price. But he’s a lot more flexible on price than most value investors. Just Google him.

To summarize, grow your own style, and play some football!

Selling and Selling Short

Read the full text as pdf…

“Almost all of the really big trouble that you’re going to experience in the next year is in your portfolio right now; if you could reduce some of those really big problems, you would come out as a winner […].” /Charles Ellis

When it comes to investing in portfolios of individual stocks, it doesn’t matter if your benchmark is an index or an absolute return number; there are still two basic ways to beat that target…

Insurance Primer

Read full text as pdf…

Life presents us all with a wide variety of risks. This gives us a choice to either accept the consequences of those risks, should they materialize, or to try to protect ourselves from these consequences and by this reduce the exposure to various perils. Insurance companies protect against the financial risks of both retail customers and those of corporations. Those who…

Warren Buffett’s only public investment thesis

Although Warren Buffett is open and transparent about most things he never discusses the details of his investment theses. That is too bad since that is probably what most of us investors are interested in. But there is actually one investment case that he has described publicly. And it is not any investment, but his favourite and probably most important investment, Geico.

Warren wrote the article when he was 21 years old and working as a security broker at his father’s investment firm Buffett-Falk & Co. He had just received his degree from Columbia where he studied under his mentor Benjamin Graham.

What struck me is that, contrary to public perception about his old strategy, Warren was investing in a fast growing company with competitive advantages. Although he paid a value multiple of 8 times earnings, Geico was clearly not a cigar-butt or liquidation play. On the contrary, Warren discusses the advantages the company has compared to its competitors. Another thing that struck me is that he only mentions management and insider ownership briefly. That is a factor that he has focused more on as he has developed. That said, the quality of the analysis is high and impressive given his young age. Already at 21, he was good at making difficult things sound simple.

Enjoy the read: The Security I Like Best




Carl Icahn

Read as pdf… Link to Amazon…

Investor profile at InvestingByTheBooks: The book The World’s 99 Greatest Investors: The Secret of Success provides a unique opportunity to learn form the most prominent investors globally. In the book they generously share their experiences, advice and insights and we are proud to present these excerpts. Magnus Angenfelt, previously a top ranked sell side analyst and hedge fund manager, will be presenting one investor per month. For those who cannot wait for the monthly columns, we strongly recommend you to buy the book. The investor himself writes the first section below and then Angenfelt describes the background of the investor and comments on his investment philosophy. Enjoy.

There are no words in our vocabulary that define the common quality that all very successful people share, but the closest words would be ‘passion’ or ‘obsession’ relating to what they do. A second quality these people share is a lack of hubris when achieving a great victory in a game or investment. When they are victorious they do not believe they are geniuses, rather they understand how much luck is involved. As Rudyard Kipling put it, ‘if you can meet with Triumph and Disaster and treat those two impostors just the same’.

A third quality that I believe all great investors share is the ability to recognize the difference between a ‘secular’ and ‘cyclical’ change in companies they have carefully studied. If a company they have studied and believe in is down because of a cyclical change, successful investors use the opportunity to purchase as much as they can as quickly as they can. They do not care and are not influenced or frightened by market conditions, etc. However, if a company is in trouble due to ‘secular’ change, successful investors will take their losses and back away.

The ability to recognize secular and cyclical cycles cannot be taught, in my opinion. Rather, it is an instinct or talent that has been honed over many years of arduous work. In other words, the great investors, just like the great champions in other fields, can divorce themselves from their emotions and just play the game.

BORN New York, USA 1936.

EDUCATION He studied philosophy at Princeton University in 1957 and at the New York University School of Medicine, but he left without graduating.

CAREER Icahn began his career on Wall Street in 1961 as a registered representative with Dreyfus & Company. Aged 32 he bought a seat on the New York Stock Exchange and started Icahn & Co. Inc., a brokerage firm that focused on risk arbitrage and options trading. In 1978, he began taking substantial controlling positions in individual companies. Today, he is chairman of Icahn Enterprises, a diversified publicly listed holding company engaged in a variety of businesses, including investments, metals, real estate, and consumer goods.

INVESTMENT PHILOSOPHY Icahn is the most successful and famous stock market activist in the world, but his roots are in contrarian value investing. His strategy is to invest in beaten-down assets that nobody else wants, usually out of bankruptcy, then fix them up and sell them when they are back in favour. When studying a firm’s structure and operations to explore the reasons for any disconnect between the company’s stock price and the true value of its assets, ‘for the most part the reason for this disconnect is management’, as he explains it. To take the steps necessary to seek to unlock value he uses tender offers, proxy contests, and demands for management accountability. When valuing companies, he looks at replacement cost, break-up value, cash flow and earnings power, and also liquidation value.

He operates with almost all market instruments – including long and short equities and bonds, bank debt and other corporate obligations, options, swaps, etc. He regards consensus thinking as generally wrong. ‘If you go with a trend, the momentum always falls apart on you’ says Icahn. In contrast to the general view about activists, he is more of a long-term investor. The focus is on capital structure, management, and finding the best long-term owner for the assets.

OTHER Icahn Enterprices has revenues around $20billion and almost $30 billion in assets. In 2008, Icahn launched the Icahn Report, which campaigns for shareholder rights and encourages them to shake up the management and boards of underperforming companies. He has through his different vehicles taken positions in various corporations over the years and very seldom failed to wring out changes and higher valuation. Some of the most famous battles were RJR Nabisco, Texaco, TWA, Phillips Petroleum, Western Union, Gulf & Western, Viacom, Blockbuster, Time Warner, Yahoo, Motorola and recently Dell. In the fight over Time Warner, where he owned about 3.3 %, he unveiled a 343-page proposal calling for the break-up of the company. In 2013 his net worth was estimated by Forbes to be $20.3 billion, making him the eighteen richest man in the world. He has been an active participant in a variety of philanthropic endeavors through Icahn Charitable Foundation, which mainly focuses on child welfare, education, and medicine. 

Sources: Carl Icahn; Icahn Enterprises L.P.; Icahn Enterprises; the Icahn Report; Wikipedia.

The Market and Corporate Governance

Read full text as pdf…

Who is “the Market”? Or rather, how does the stock market work? Why does it react as it does? Why is our stock valued as it is? What do investors really want out of us? Board directors and executive managers at times have a strained relation to a stock market they view as short-sighted, moody and that infringes on their valuable time. Many are genuinely unsure of what makes this unruly monster tick and others…

Bank Primer

Read full text as pdf (93 pages)…

Financials is one of the really big global sectors in equity markets. In fact, measured in market capitalization it’s the largest one. It’s also a more diverse sector than many perhaps realize hosting a number of different business models. In the GICS framework the sector is made up of four industry groups, namely banks, diversified financials, insurance and real estate. Each industry…

The Zurich Axioms

Read as pdf… Link to Amazon…

The Zurich Axioms by Gunter, Max
 

1.      On Risk: Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough.

·       Always play for meaningful stakes

·       Resist the allure of diversification

2.      On Greed: Always take your profit too soon.

·       Decide in advance what gain you want from a venture, and when you get it, get out.

3.      On Hope: When the ship starts to sink, don’t pray. Jump.

·       Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain.

4.      On Forecasts: Human behavior cannot be predicted. Distrust anyone who claims to know the future, however dimly. 

5.      On Patterns: Chaos is not dangerous until it begins to look orderly.

·       Beware the historian’s trap.

·       Beware the chartist’s illusion.

·       Beware the correlation and causality delusions.

·       Beware the gambler’s fallacy.

6.      On Mobility: Avoid putting down roots. They impede motion.

·       Do not become trapped in a souring venture because of sentiments like loyalty or nostalgia.

·       Never hesitate to abandon a venture if something more attractive comes into view.

7.      On Intuition: A hunch can be trusted if it can be explained.

·       Never confuse a hunch with hope.

8.      On Religion and the Occult: It is unlikely that God’s plan for the universe includes making you rich.

·       If astrology worked, all astrologers would be rich.

·       A superstition need not be exorcised. It can be enjoyed, provided it is kept in its place.

9.      On Optimism and Pessimism: Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.

10.   On Consensus: Disregard the majority opinion. It is probably wrong.

·       Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.

11.   On Stubbornness: If it doesn’t pay off the first time, forget it.

·       Never try to save a bad investment by averaging down.

12.   On Planning: Long-range plans engender the dangerous belief that the future is under control. It is important never to take your own long-range plans, or other people’s, seriously.

·       Shun long-term investments.

Mats Larsson, September 27 2018

 

P.S. Please see the review of the book The Zurich Axioms for more color on the philosophy presented. Or read the book.

Post-Merger Integration

Read full text as pdf...

The historic evidence is quite clear, listed corporations’ acquisitions on average destroy value for their shareholders. And companies that make large and infrequent acquisitions are especially efficient in transferring their hard earned wealth to the purchased company’s shareholders. Basically, all the value of the generated synergies and then some - on average – accrue to the...

Mr. Buffett Miscalculates

Read full text as pdf... Link to Amazon...

How does one get the most bang for the buck? - The most future benefit out of ones present scarce resources? How does one decide between different options? In finance the way is often to compare the return on the various uses of ones capital and then select the one(s) with the highest return on equity, return on capital employed, return on capital invested, internal rate of...

Margin of Safety - From Engineering to Investing

Read full text as pdf...

Warren Buffett has often stated that the Intelligent Investor by Benjamin Graham is the best book ever written on investing. The two chapters that Buffett rates most highly are chapter 8, The Investor and Market Fluctuation where Graham came up with the metaphor of the manic-depressive Mr. Market, and chapter 20, "Margin of Safety" as the Central Concept of Investment. The focus for this brief and introductory text is the latter.

Margin of safety as a concept

"Long ago, Ben Graham taught me that "Price is what you pay; value is what you get" / Warren Buffett

Margin of safety is in investment terms often described as the difference between value and...

Utilities Primer

Read full text as pdf...

A utility is a company that produces and/or provides electricity, gas or water or handles waste. Electricity utilities, more commonly called power utilities, generate power, manage power transport networks and supply end users with electricity. Prior to the deregulation of the power utility industry all this was handled by the same often publicly owned organization – an...

Edward Lampert

Read as pdf... Link to Amazon...

Investor profile at InvestingByTheBooks: The book The World’s 99 Greatest Investors: The Secret of Success provides a unique opportunity to learn form the most prominent investors globally. In the book they generously share their experiences, advice and insights and we are proud to present these excerpts. Magnus Angenfelt, previously a top ranked sell side analyst and hedge fund manager, will be presenting one investor per month. For those who cannot wait for the monthly columns, we strongly recommend you to buy the book. The investor himself writes the first section below and then Angenfelt describes the background of the investor and comments on his investment philosophy. Enjoy.

The idea of anticipation is key to investing and to business generally. You can’t wait for an opportunity to become obvious. You have to think, ‘Here’s what other people and companies have done under certain circumstances. Now, under these new circumstances, how is this management likely to behave?’

One of the things I try to advocate to other investors and companies is that if you can have a large long-term investor then you have the ability to run the company for the long term.

So much time and money ends up spent ensuring that the financial statements are immune from criticism that it can become much more of a distraction than a useful tool for investors and managers.

BORN New York, USA 1962.

EDUCATION Lampert graduated with a BA in Economics from Yale University in 1984.

CAREER After school he started as an intern at Goldman Sachs. Inspired by Warren Buffett’s letters to shareholders he left its risk arbitrage department in 1988 to start his own hedge fund ELS aged 26. He still serves as chairman and CEO.

INVESTMENT PHILOSOPHY Lampert defines himself as an “aggressive conservative” investor; one could also say a ‘concentrated value’ investor. He is uncommon for a hedge-fund manager in that he is a mix of investor and businessman. He is, among other things, CEO and chairman of Sears, the gigantic retailer store which is ELS largest holding and accounting for more than a third of the assets. Lampert focuses on finding companies that are seriously undervalued, and he is willing to target poorly run ones because they can produce greater returns if the right changes are made. As a result, Lampert is more hands-on with management, and the number of investments is normally below ten, although intimately known holdings are kept for several years.

Lampert’s style of investment requires a more detailed knowledge of the business, company management, and its values, than those who invest for shorter periods of time. He seems to prefer mature and easily understandable companies that generate lots of cash. He thinks past performance used as a measure of quality is wildly overrated. When investing, he focuses intensely on how their companies allocate capital to maximize returns. Lampert has significant experience investing in retail, even if his first retail investment was only in 1997. He does not have any known shorting strategy.

OTHER Lampert has carefully studied Buffett for years. He went back and read annual reports in the couple of years preceding some of Buffett’s investments: ‘Putting myself in his shoes at that time, could I understand why he made the investments?’ He has also been nicknamed ‘the new Warren Buffett’. Lampert is most famous for forming and merging Kmart and Sears into Sears Holdings. He took control of Kmart (the third largest discount store chain in the US, then with above $20 billion in sales) by buying up debt during its bankruptcy, cutting costs and by then reduce the workforce by 34 000 employees. Due to underperformance in Sears the asset under management in ELS has recently dropped from 10 to around $2,5 billion. Lambert’s earnings in 2004 were estimated to be $1.02 billion, making him the first Wall Street financial manager to exceed an income of $1 billion in a single year. Forbes estimated his wealth to be $2.9 billion in 2013. In 2003 Lampert was kidnapped, but he managed to talk himself out of the situation and was released after two days.

Sources: Edward Lampert; CNNMoney; Bloomberg; Sears annual letter to shareholders, 2008; the Third Avenue Management Investor Conference and Luncheon, 18 November 2003; BusinessWeek, 2007; Wikipedia; online.wjs.com, the performance is estimated.

Best Practice Asset Managers

Read full text as pdf...

If you are an active asset manager your raison d’être is to outperform the market, i.e. the other investors. Yet, many pension funds, insurance companies and mutual funds haven’t specified what their competitive edge is. Instead too many mimic what others do, hire qualified personnel and give them good remuneration, close their eyes and hope for the best. The result is almost... 

Energy: An Oil & Gas Primer

Read full document as pdf...

The US shale revolution is redrawing the energy map of the world. In 2014 the US replaced Saudi Arabia as the world’s largest producer of oil. The forecaster of such a development 5 years ago would have been taken away by men in white coats. The US has also overtaken Russia as the world’s largest producer of natural gas. This secular growth of this non-OPEC supply source...

Jim Slater

Read as pdf... Link to Amazon...

Investor profile at InvestingByTheBooks: The book The World’s 99 Greatest Investors: The Secret of Success provides a unique opportunity to learn form the most prominent investors globally. In the book they generously share their experiences, advice and insights and we are proud to present these excerpts. Magnus Angenfelt, previously a top ranked sell side analyst and hedge fund manager, will be presenting one investor per month. For those who cannot wait for the monthly columns, we strongly recommend you to buy the book. The investor himself writes the first section below and then Angenfelt describes the background of the investor and comments on his investment philosophy. Enjoy.

The first key point is to focus on a relatively narrow area and become very expert in it.

The second and most important thing is to cut losses and run profits. Most people do the opposite – they tend to snatch profits and hug losses. In this way inevitably they end up with big losses and small profits instead of the other way around.

The third point is to concentrate on growth shares with forward price earnings ratios less than their future growth rate.

The fourth point is that I am great believer in the importance of cash flow. I always make sure that EPS are exceeded by cash flow on a regular basis. In this way I eliminate potential Enrons.

BORN Chester, UK 1929.

EDUCATION Slater left grammar school at the age of 16 and became a Chartered Accountant when he was 24.

CAREER Slater spent his first nine years after school in industry, culminating in his appointment as deputy sales director of the Leyland Motor Corporation. After successfully writing an investment column under the pseudonym ‘Capitalist’—the ghost portfolio of ‘Capitalist’ appreciated by 68.9 % against the market average of 3.6 % – in 1964 he launched Slater Walker Securities, which collapsed in the wake of the secondary banking crisis of 1973–75. Slater famously found himself to be a ‘minus millionaire’, owing £1 million more than his assets. Within a few years he repaid all of his debts with interest. In 1976 he started to invest in property and later in the mining industry as well as biotech and agriculture. In early 1990 he devised a public company statistical guide, Company REFS, for investing based on his investment principles. Since 1975 Slater has been a very active stock market investor and remains so today.

INVESTMENT PHILOSOPHY Slater is a small-cap growth stock market investor. The key figure in his investment approach is the price–earnings growth factor (PEG). A PEG of below one, with earnings growth higher than the multiple, is attractive. His approach is similar to Peter Lynch’s, and there is some debate over which of the two devised the PEG. There is, however, no doubt that Slater popularized it in the UK. In addition, Slater demands that a company should show cash flow in excess of earnings and it must have been growing for at least the last three years. Also the company should not be over-geared. His preference for small companies is based on the conviction that ‘elephants don’t gallop’, an expression that he coined. Slater mainly depends for his investments on public data; however, he requires at least three analysts’ forecasts before investing. The management’s behaviour in terms of their buying shares and being optimistic in their annual reports are also important parts of his approach. Slater has a humble attitude to the market and does not attempt to forecast which way it is going at any point in time. He regards running profits and cutting losses as a key factor in successful investment. His investment style is probably one of the most accessible in the book.

OTHER Despite not managing other people’s money, there is a lot of evidence of Slater’s investment strategy being successful. His business column and recommendations over the years have proved to be very profitable. A public fund based entirely on his principles would be up 188 % against the market’s 73 % in the last three years, and 77 % up over the market’s 7 % during the last five years. Slater is first and foremost known in the UK for trying to help the man in the street invest successfully. He has written five investment books as well as thirty books for children. He is still a very active investor and still answers questions about investing on his homepage.

Sources: Jim Slater; www.jimslater.org.uk; MFM Slater Growth Fund.

Primer Accounting Warning Flags

Read full text as pdf...

“At any given time there exists an inventory of undiscovered embezzlement in […] the country’s businesses and banks. This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions of dollars. It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there...

Software & IT Services Primer

Read full document as pdf...

We have arrived at our concluding and in our view arguably most interesting piece on information technology. Software & Services is the third of the industry groups that constitutes the Information Technology sector. The other two, Technology Hardware & Equipment plus Semiconductors & Semiconductor equipment, have been covered in previous issues of The Companion. Software & Services is further broken up into three industries, namely 1) Software...

Michael Steinhardt

Read as pdf... Link to Amazon...

Investor profile at InvestingByTheBooks: The book The World’s 99 Greatest Investors: The Secret of Success provides a unique opportunity to learn form the most prominent investors globally. In the book they generously share their experiences, advice and insights and we are proud to present these excerpts. Magnus Angenfelt, previously a top ranked sell side analyst and hedge fund manager, will be presenting one investor per month. For those who cannot wait for the monthly columns, we strongly recommend you to buy the book. The investor himself writes the first section below and then Angenfelt describes the background of the investor and comments on his investment philosophy. Enjoy.

Just as outright euphoria is often a sign of a market top, fear is, for sure, a sign of a market bottom. Time and time again, in every market cycle I have witnessed, the extremes of emotion always appear, even among experienced investors. When the world wants to buy only Treasury Bills, you can almost close your eyes and get long stocks.

The only analytic tool that mattered was an intellectually advantaged disparate view. This included knowing more and perceiving the situation better than others did. It was also critical to have a keen understanding of what the market expectations truly were. Thus, the process by which a disparate perception, when correct, became consensus would almost inevitably lead to meaningful profit.

Beginning at a very early age, I have made cumulatively more judgments, and more investments decisions based on the same kinds of data, than almost anyone else. This process unconsciously leads to a sharpening, a fine-tuning, that, over time, results in fewer mistakes. In this repetitious behavior, a learning occurs that is not consciously understandable but allows one to develop ‘good instincts’. Often listening to an idea led me to an entirely different conclusion to that envisaged by the proponent of that same idea, whose knowledge was far deeper than mine.

BORN New York, USA 1940.

EDUCATION In 1960 Steinhardt graduated from the Wharton School of Finance at the University of Pennsylvania in only three years.

CAREER Steinhardt began his career on Wall Street in research and analyst positions with mutual-fund company Calvin Bullock followed by a similar position at the brokerage firm at Loeb, Rhoades & Co, before founding Steinhardt, Fine, Berkowitz & Co., a hedge fund, in 1967. He retired and closed the fund in 1995. In 2004 he made a comeback through Wisdom Tree, which is the seventh largest index fund in the US based on ETF.

INVESTMENT PHILOSOPHY Even if the fundamentals were the starting-point, he usually ended up being a short-term investor with the normal holding being no longer than a month. ‘Our investment style is four yards up the middle in a cloud of dust’ as he himself described his investment style with the help of a metaphor from American football. He invested in all forms of assets, but stocks were usually in the majority. In the final years of the fund’s existence he also invested abroad, but with dreadful results. In contrast to the other traders in this book, Steinhardt was the opposite of a trend-follower. He preferred to go against the market and short his favorite companies. Neither did he care for technical analysis and graphs. Contrarian is probably the best description of his style, but in large part he was highly individual, and hard to copy. He had no rules or valuation frameworks, but tried simply to think differently. Steinhardt was known for his ability to predict the direction of the stock market. In his time, he was said to have been the most demanding boss on Wall Street.

OTHER He was one of the first prominent hedge-fund managers. No one has been so successful (over 30 % annual gross performance in 28 years) or had that stamina using such an intense investment strategy as Michael Steinhardt. One dollar invested in 1967 in his fund would have grown to $481 in 1995, compared to $19 for S&P 500 in the same period. Having in mind that Steinhardt on average only was roughly 35% net long in his portfolio over the time tells you how good he must have been on both picking winners and losers in the stockmarket. In 2001 he published his autobiography: No bull: my life in and out of the markets. Since retirement he has managed his own money and collected art. He is also a major philanthropist, active in Jewish causes.

Sources: Michael Steinhardt, No bull: my life in and out of markets (2001); Investopedia; Wikipedia.

Investment Checklists

Read full document as pdf... 

In many professions experts face a constant rise in complexity due to increased domain knowledge. The traditional way to handle this has been to specialize into an ever-smaller niche to increase skill and to be able to keep the expert status. Besides creating the undesirable second order effect that too few have the ability to overview and understand larger areas, this strategy...