To become a great investor, focus on a multidisciplinary mindset (become a generalist).
"Most of us study something specific and don’t get exposure to the big ideas of other disciplines. We don’t develop the multidisciplinary mindset that we need to accurately see a problem."
"An engineer will often think in terms of systems by default.
A psychologist will think in terms of incentives.
A business person might think in terms of opportunity cost & risk-reward.
Through their disciplines, each of these people sees part of the situation."
Applying a "multidisciplinary mindset" forces inspiring portfolio managers to have knowledge in psychology & human behavior, ancient & modern history, fundamental securities analysis, accounting, macroeconomics, experience in negotiating, running a business, and so much more.
Our portfolio allocation is somewhat planned, but to a great extent very much accidental, as it's based upon "value" offered in different assets, regions & capital stack positions at any given time in the cycle.
In other words, it is more of an art than science.
It can be added that many other market participants do not behave under such mandate, since they are far more authoritarian in their allocation approach.
Rather than searching for value currently on offer, they'll keep buying overpriced assets as it's within their comfort zone.
Flexibility & patience are our edges to mitigate risks & outperform.
As public equities become overpriced we're likely to sidestep into real estate. And when it becomes overpriced, we'll consider special niches like litigation funding, mezzanine debt, or distressed PE deals.
"If you have $10,000 and you haven't been able to compound it at 30-40% for a long time, then you shouldn't even think about starting a fund or raising capital."
But of course, asset gathering & AUM is a shortcut to wealth in the finance industry. 😂
"If you have an engine which is getting you high CAGR the power of compounding is such that if you never raised any funds, you will still be enormously wealthy.
The criteria for getting into the fundraising business is you should already be independently wealthy."
I completely agree with this!
This is also why I disagree with so many hedge fund managers, real estate GPs, newsletters, and those selling courses encouraging others to get fast riches on the back of other people's savings without a proven track record with their own money.
The way we look at it, the vast majority of the China tech regulation is currently being discounted into the price as investors panic and the sector is down -60% from its all-time high.
When it comes to US & EU tech regulations, that is where REAL risks await at all-time highs.
Amazon is looking very weak here.
The company's stock consolidated for a while & finally attempted to break above the $3,500 resistance only to fail
This is known as a "2b pattern" or a "bull trap."
Bull traps are often followed by sharp moves in the opposite direction. $AMZN
And of course, the cherry on top is Cramer is now recommending Amazon as a buy — the same way he recommended "Alibaba as a buy & hold" before it had its sharp correction due to tech regulation. $AMZN $BABA
The European Commission said it would seek to boost the international role of the euro and build European financial infrastructure so that the EU becomes more independent of outside financial centres and the dominance of the U.S. dollar.