Michael Markels – Investing on a Hunch: Why an Exit Strategy is Important
My Worst Investment Ever Podcast
Intro
Michael Markels discusses his extensive experiences in the financial industry, highlighting his accomplishments in originating bonds and swaps, securitizing bank loans in Eastern Europe, and navigating transactions for the Resolution Trust Corporation during a banking crisis in the US.
A few of the firsts in Michael Markels’ career include the origination of the World Bank’s inaugural Sharia-compliant MYR bond and swaps back to $US libor; the first securitization of bank loans in eastern Europe, which reduced mismatches on the balance sheet of Slovenia’s largest bank; and the execution of the inaugural “N” transactions, in which the Resolution Trust Corporation sold management rights, bond debt and equity in large pools on non-performing mortgages.
Michael Markels is an expert at raising funds at scale for rated borrowers and for pools of assets in structured transactions, in times of crisis and of growth. He understands the strategy, having worked on the RTC disposition asset disposition strategy. In addition to being an MD at Standard Chartered, responsible for the P&L generated by major financial institution clients, he arranged fund management products for their private bank shelf. Mike has deep relationships in the financial markets, developed over twenty years in a series of resident assignments with the US Treasury (Bosina), the World Bank (Thailand and India) and with Stan Chart and ABN AMRO (Singapore and Thailand). Mike teaches bank examiners in BCLMV countries, in the context of ASEAN integration. Mike has been using his experience in the bond markets and in development to help UNDP take a leadership role in SDG finance.
In this episode, Michael shares the marital risk of financial investments, the importance of managing expectation when investing on a hunch and setting an exit strategy.
“Platinum moved away from us. Gold moved away from us. We just hung in there in the view that it will turn around. It never did.”
- Michael Markels
What do you want to hear from the My Worst Investment Ever Podcast?
Resources:
Topics Covered:
00:26 – Michael Markels professional and personal background
03:21 – Gold and platinum trading investment Michael and his wife ventured in, and the circumstances leading up to their worst investment
05:16 – Their forecast on the platinum’s performance over gold causing them to lose $100,000- $150,000
07:21 – Michael describes their position on their platinum and gold investment
08:02 – What supported the investment decision?
09:28 – The emotional situation in their relationship during their exiting strategy
11:55 – Michael’s takeaways from their losers
14:55 – Michael’s actionable advice to help people protect their investment
Main Takeaways
- Lesson 1: Be careful with the massive market. It is not easy to make money. The counterparty you’re trading against has a huge balance sheet. And the ability to act very differently other you may think.
- Lesson 2: In every single trade you make, you have to think about what is your exit strategy. An exit strategy may be executed for the purpose of exiting a non-performing investment.
- Lesson 3: Consider behavioral and emotional factor especially when investing as a couple. The behavioral factors and the emotional factor within the world of finance are so powerful if you decide to get involved with a spouse. When couples want to make the most of their investment dollars, investing together can be a great strategy. But if partners don’t agree on the investment goal, the decisions made can be a recipe for a relationship disaster.
You can also check out Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
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