Learn From The Masters: Invest Like The 0.001%

Section 6          Invest like the 0.001%: The billionaire’s playbook

Chapter 6.0 Meet the masters

Chapter 6.1 Carl Icahn: Master of the universe

Chapter 6.2 David Swensen: A $23.9 billion labor of love

Chapter 6.3 John C. Bogle: The Vanguard of investing

Chapter 6.4 Warren Buffet: The Oracle of Omaha

Chapter 6.5 Paul Tudor Jones: A modern day Robin Hood

Chapter 6.6 Ray Dalio: A man for all seasons

Chapter 6.7 Mary Callahan Erdoes: The trillion-dollar woman

Chapter 6.8 T. Boone Pickens: Made to be rich, made to give

Chapter 6.9 Kyle Bass: The master of risk

Chapter 6.10 Marc Faber: The billionaire they call Dr Doom

Chapter 6.11 Charles Schwab: Talking to Chuck, the people’s broker

Chapter 6.12 Sir John Templeton: The greatest investor of the 20^th century

We have come a long way now from the first part of this book review series.

Here, Tony interviews twelve investing icons.
He starts at ‘Meet the masters’ with four common obsessions they all share:

1.      Don’t lose. All of these masters, while driven to extraordinary returns, are even more obsessed with making sure they don’t lose money. Paul Tudor Jones said, “I care deeply about making money. I want to know I’m not losing it.... The most important thing for me is that defence is ten times more important than offense... You have to be very focused on the downside at all times.”

If you lose 50%, it takes 100% to get back to where you started- and that takes something you can never get back: time.

2.      Risk a little to make a lot. While most investors are trying to find a way to make a ‘good’ return, each of these hall of famers, without exception, looks for something completely different: home runs! They live to uncover investments where they can risk a little and make a lot. The call it asymmetric risk/reward.

3.      Anticipate and diversify. The best of the best anticipate; they find the opportunity for asymmetric risk/reward. They really do their homework until they know in their gut that they are right –unless they are not! And to protect themselves, they anticipate failure by diversifying.

4.      You are never done. Contrary to what most people would expect, this group of achievers is never done! They’re never done learning, they’re never done earning, they are never done growing, they are never done giving! No matter how well they’ve done or how well they’ve continued to do, they never lose their hunger- the hunger that unleashes human genius.

You can check out their profiles at the web app link. 

Carl Icahn: Master of the universe. Carl is an investor activist who forces poorly performing boards to sit tight or be forcefully taken over. Word on Wall Street is that he creates opportunity with his activism. And statistics in the book show the value of his activist board membership.

David Swensen: A $23.9 billion labor of love. David is the chief investment officer of Yale who turned $1 billion into more than $23.9 billion. He believes asset allocation explains more than 100% of returns in investing. And advocates for diversification.

John C. Bogle: The vanguard of investing. Creator of the Index Fund, founder and former CEO of the Vanguard group. He founded Vanguard with the belief that the investor’s interest should be paramount and protected above all else.

 Warren Buffet: The oracle of Omaha. Warren Buffet probably needs no introduction. He is arguably the most quoted of all investors.

Paul Tudor Jones: A modern-day Robin Hood who is the founder of Tudor investment corporation. He talks about Five to one, asymmetric risk/reward for investment where you risk one dollar to make five.

Ray Dalio: A man for all seasons. His strategy had been extensively discussed in Chapters 5.1 and 5.2.

Mary Callahan Erdoes: The trillion dollar woman. Mary is the CEO J.P. Morgan Asset Management division with over $1 trillion in Assets under management. She talks about how to balance family and work life.

T. Boone Pickens: Made to be rich, made to give. The Oil oracle wants to reduce America’s dependence on OPEC oil. He talks about how he overcame poverty and squalor to becoming a billionaire, and then giving away $1 billion to charity.

Kyle Bass: The master of risk. Kyle successfully predicted the US housing market crash of 2008 and made his first billion thereby.

Marc Faber: The billionaire they call Dr Doom. One of the most knowledgeable Asian markets investor, Marc Faber talks about asset allocation and the opportunity of investing in international markets in chapter 6.10.

Charles Schwab: Founder and Chairman of Charles Schwab corporation, Chuck made buying shares/individual trading very easy for the average investor.

Sir John Templeton: The greatest investor of the 20^th century? The late Templeton was a philanthropist and grandmaster investor who knew how to make the most of the opportunities a stock market crash offers. His legacy lives on after him with the myriad of mutual funds he created that now helps many investors make good returns on their investments.

I will complete this series next week.