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Frederik 'Neckar' Profile picture
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3 Apr, 7 tweets, 3 min read
Munger the ruler: leverage is how you go broke.

Munger the conqueror: leverage is how I'll get rich.

(Doesn't mean his advice isn't generally right.)
Munger Partnership
"Munger at one point had almost 84% of his assets in two stocks, Blue Chip Stamps and New America Fund. By employing leverage, Charlie was able to vastly amplify the potential gains if the prices of these two businesses went up."
helpforthemiddleclass.com/charlie-munger…
"Munger did enormous trades like B.C. Power, which was being taken over. He put all the money he had and all that he could borrow into an arbitrage on this single stock-but only because there was almost no chance that this deal would fall apart."
yahoo.com/entertainment/…
"how to rule vs. how to conquer"

"Rick Guerin disappeared. Warren said Rick was just as smart as us, but he was in a hurry. In the '73 downturn, Rick was levered with margin loans. The stock market went down almost 70% in those two years, and he got margin calls"
h/t @morganhousel

fool.com/investing/gene…
"Rick was forced to sell Berkshire shares at $40 a piece because he was levered."

"If you're a slightly above-average investor, who spends less than they earn, over a lifetime you cannot help but get rich if you are patient.

The lesson was: don't use leverage and be patient."
"A Look Back at British Columbia Power, merger arbitrage with minuscule risk"

Basically trading for cash in the bank with litigation upside. Buffett took an 11% position, Munger bet the farm.
bovinebear.blogspot.com/2015/11/a-look…

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More from @NeckarValue

Frederik 'Neckar' Profile picture
3 Apr
Peter Lynch on the biggest mistake investors make:

"They don't know what they own. They do more research on a microwave oven and buy based on a tip they heard on the bus. They buy into the potential of something. They hear a terrific story."
"I find when you hear that [story], you just have to black out. You have to think of a movie you went to recently because the stories are very appealing."
"The public is very careful with their money when they buy a dishwasher or a TV set, when they rent an apartment. When it comes to the stock market, for some reason they just don't do any work."
Read 9 tweets
Frederik 'Neckar' Profile picture
2 Apr
Loved this with @IAmAdamRobinson and @BillBrewsterSCG

An exercise in clear thinking and good ideas.

Ample Bruce Lee quotes. "One of the most important lessons in life, certainly in investing, is to master the ability to remain calm."
Avoiding the "stupid zone" of decision-making: "I define stupidity as overlooking or dismissing conspicuously crucial information"

Seven factors:
-Being outside your normal environment or changing your routines
-Being in the presence of a group
- Being in the presence of an expert (authority) - or being an expert
- Doing any task that requires intense focus
- Information overload
- Physical or emotional stress, fatigue
Read 4 tweets
Frederik 'Neckar' Profile picture
1 Apr
The super simple method Jack Dorsey uses to change his habits.

It's a plain sheet called "daily" with a list of "Dos" and "Don'ts."

"It gives you focus. It allows you to really ignore everything else that's going on, all the other noise."
First, find a place you will check every day. For Dorsey, it's the notes tool on his iphone. (He keeps a note on every person he talks to.)

He's in this tool every day, so that's where he puts his "daily." I started mine on paper and leave it on the desk.
The idea is to check it when your day starts and keep it close as you go along. The format is very simple:

Do: [List the things you want to start or keep doing]

Don't: [List "what you never wanna do again"]

This is very personal. Let's check out what Dorsey wrote down:
Read 6 tweets
Frederik 'Neckar' Profile picture
30 Mar
Carl Icahn famously said: “If you want a friend on Wall Street, get a dog.”

He's a tough negotiator and built a fortune for himself.

When he rose to fame in the 1980's, it was him against the world. Him and his analyst - Al Kingsley.
This is Kingsley, drowning in paper. He was responsible for the details.

“Carl and Kingsley operate like a couple of rag merchants. Carl is always yelling at Kingsley, but it all bounces off Al. Al has a great mind."
"He puts things in a language Carl can relate to. I used to explain things from a cash-flow standpoint but Kingsley would recast it into a ‘put money and here’s what you get for it’ approach. The Carl-like way.'”
Read 9 tweets
Frederik 'Neckar' Profile picture
29 Mar
Loved this conversation from 2019 @briankoppelman and @pmarca. Riffing on entrepreneurs vs. artists, finding a scene, showmen, betting on people, pivoting.

stitcher.com/show/the-momen…
"The world is busy. People don't wake up and say, 'I can't wait to find out what this person that I've never of has invented.' You have to inject yourself in the world. In our world, the successful people are the ones that are able to create and are able to push into the world."
Why @a16z doesn't invest in cold pitches aka "the test":

"If you can't get one inbound referral, that indicates you're going to have a hell of a time as an entrepreneur. Once you raise money from us, the pain begins. The pain of trying to get other people to say yes to you."
Read 6 tweets
Frederik 'Neckar' Profile picture
15 Mar
Paul Tudor Jones, summer of 1987, right before the crash.

“There are times when the risk-reward ratios are so favorable that you simply have to load up and swing for the fences”

“I work too damn hard to accept mediocre results”
1988, after the crash and a 200% year.

"We're cowboys in the purest sense."
“Ego is the single most destructive force you can confront in business. I treat every trade as a business decision. You have to be sure you have the discipline to get out of a losing trade.”
Read 4 tweets

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