Sunday, May 16, 2010


This is just the beginning of a very interesting, and exciting time. I think one of the parts that I like the most about this new chapter in my life is all the life advice and feedback from family and friends. So far (and what I hope to be just the beginning):

The Dad - "Don't f*** it up"

The Mom - "Before I say yes, there are 3 things I want you to do: 1) be her "champion" 2) Don't let fear prevent you and her from living life or trying new things and 3) Don't stick to the conventional advice of others, this is your life, you should do what works for you."

The friend from high school - "I'm surprised she said yes too!"

My Psychologist / Jedi / Trader Mentor - "So this means she has 24 hours to shop for competing offers?"

My old private equity boss and friend - "Don't do it... just kidding"


Sunday, May 09, 2010

CM - On Courage

Perhaps my favorite quote from the meeting:

"I developed courage, once I learned I could endure hardship." - CM.

Saturday, May 08, 2010

Munger - Opportunity Cost

I went to the annual Berkshire and Wesco meeting this year, and while I'm not going to try to summarize 10 hours of learning right here, there were several quotes and analogies that just lit my brain on fire. It almost feels like those Japanese Anime super heroes that power up to discover new powers and strengths.

One analogy that CM gave on opportunity cost was incredibly powerful to me. After Berkshire bought $300mn of BYD (Chinese electric battery / car company) and the stock has proceeded to rally ~400%, CM has gotten several solicitations to consider investing in other Chinese companies. Your logical instinct should probably be that after this initial success he would be all over any potential Chinese ideas. But its the exact opposite!

CM, indicated that he wouldn't even looking at them, just given that the opportunity cost was so high given that he liked BYD, the product, the management, even though it had traded up 400%! He had more faith in BYD growing over time, (and had already done the work) than considering other investments!

It doesn't make 100% sense to me (as I'm younger - mid-twenties vs. 86 and try to be constantly looking at new ideas), but it's something I've been reflecting on, when considering potential investments (i.e. does this meet the opportunity cost? Even better, does it raise the opportunity cost for future investments?).

How Not to Finish the Game...

6th Inning (February 1999):

7th Inning (autobiography - where this blog got its name - November 2003):

8th Inning (At the Citi testimony before the Financial Industry Inquiry Commission explaining why Citi needed $45 billion in bailouts and $300 billion in tax payer guarantees under their watch - April 2010):

Thursday, May 06, 2010


S&P 500: 1,128 (only -3.24% after falling intraday over 8%)

I'd be lying if I said I didn't have the evil "muah haha" laugh in my head today as I watched my short position lurch 8%+ today (and ultimately pullback). I don't expect tomorrow's performance to be anything like today, and if I had to bet on a direction I'd probably say up.

That said, to paraphrase WEB, I have no idea what the market will do in the next day, month or year. The game I play, is that I look for small, cheap companies at 10x or under free cash flow (mostly looking at companies under 6x free cash flow unless management is active in paying out the cash or it's an amazing business) that make a lot of sense to buy and don't warrant the corresponding 10% yield equivalent. There's less competition and the returns can be disproportionate with the uncertainty taken.