"There’s one thing you have before you put on the trade that you immediately lose once you put on a trade and that’s objectivity."

@jackschwager with @SeanDeLaney23

whatgotyouthere.com/portfolio/270-…
"I sometimes will say, not facetiously, that people think I write books about trading, but they’re really books about psychology."
"I often say if I was asked, you can give advice to traders, but you could only use ten words. I know what those 10 words would be. It’s a sentence that Bruce Kovner said, and he said, “I know where I’m getting out before I get in.” Or know when you get out before you get in."
"We as humans have evolved so that our instincts will lead to worse than random decisions. ... cliche you could take a monkey to throw darts ... will do as well as the professional traders.

The monkeys could do better because the monkey is not inhibited by our human emotions"

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More from @NeckarValue

4 Nov
More Money Than God by @scmallaby is the best book to understand history of hedge funds - and therefore a lot of the participants and styles in public markets today.

The footnotes alone are worth the price.
“Rarely do portfolio managers articulate why they are successful. Sometimes they try to do so but are wrong. I have worked with hundreds of PMs and found that articulating why they are successful is quite difficult for them—although often they are not aware that it is.”
“Trading can be intuitive. We are looking at so many factors in the markets [that] a lot of our analysis operates on a subconscious level. All of a sudden you just know this is the right trade. If somebody really quizzed you, you probably couldn’t clearly articulate your views...
Read 37 tweets
4 Nov
"As people are educated in a more and more homogeneous way, the gains to specificity and accuracy that you enjoy, and the gains to certainty, are offset in a way because everybody shares the same blind spots."

"this role of jester, the one person allowed to insult the king as a necessary corrective. There seems also to be an evolutionary mechanism, where we accept that you can say things in a funny way and the social response to that has to be different to if they are said seriously."
“If you want to tell people the truth, you’d better make them laugh or they’ll kill you”
Read 4 tweets
2 Nov
Finally got around to reading the letters of Nick Sleep and Zak Zakaria's Nomad Partnership. These guys crushed the market and left behind a legacy of insights and worldly wisdom.

Going to share some favorite lessons and quotes:
Sleep was an analyst at Marathon Asset Management and Zakaria at Deutsche Bank. The two connected over finding cheap stocks after the Asian financial crisis. In 2001, they set up their own investment partnership.

They closed it after 13 years. Such a mic drop..
Intrinsic motivation.

They ran their partnership because they loved the intellectual challenge and craft, not just for money (but yes, they did earn enough to retire from performance fees). They closed the fund repeatedly and kept management fees low.
Read 42 tweets
2 Nov
As you gain experience it gets harder to change how you invest. How do you know whether you're adapting to a changing world or just chasing the latest fad?

Rather than looking for a eureka moment, build a mosaic of incremental insights that connect and get you to the next level.
I wrote a little case study about @B3_MillerValue, who was criticized for investing in Amazon, and his early integration of value investing and technology/internet companies.

It was a learning journey connecting different disciplines and the deep study of new business models.
He grasped that accounting failed to capture value creation for a new crop of companies: “we are interested in the underlying economic reality of the business and not how they report what is going on."

But what may seem obvious today required a departure from dogma and tribe.
Read 5 tweets
1 Nov
Deep dive interview with @mcannonbrookes of $TEAM

"We were voracious readers. ...every business book between 1998 and 2004. Half of it was bullshit, red herrings, endless amounts of crap. But we decided that we had to evolve into a software company.."
"We ran the business cheaply for long enough, revenue was always higher than expenses on a cash basis. This seems crazy now...

if you have technical founders, as long as your own salaries are low enough, ...you can get a wheel going.

We could afford to be a little slower."
"I always try to be very intentional with my time. Time is the one thing you can't get back. By intentional, I mean that I choose as carefully as I can where to spend my time. Everything flows from that as it creates constraints."
Read 7 tweets
26 Oct
How did an overambitious Apple engineer end up owning the Grizzlies NBA team?

@RobertPera started his networking firm Ubiquiti with $30,000 from savings and credit cards. Today, it's a $20 billion company.

The crazy part: he still owns 89% of the stock!
Pera left UC San Diego with degrees in engineering and Japanese and joined Apple in 2002 to work on Wi-Fi

"I wanted to build products. I idolized Steve Jobs."

Pera wanted to join a design group but his manager told him to slow down. Pera got a 2-out-of-5 performance rating.😔
Pera noticed Apple could boost the signal and range of its routers. But nobody was interested.

You can guess what happened next: He spent nights and weekends building his own prototype.

In 2005, he left - just when his manager told him he was "finding his stride."
Read 25 tweets

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