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TIP343: How to Invest like the Best w/ Ted Seides

Apr 4, 2021

Guest

Ted Seides

In this discussion, Ted Seides, an allocator with a wealth of experience from the Yale Endowment, shares his insights on investing like the best in the business. He discusses the unique advantages retail investors can leverage and when to invest in hedge funds. The conversation also dives into his famous wager with Warren Buffett, revealing what he learned from that experience. Ted emphasizes the importance of strategic partnerships in investment management and highlights the evolving landscape of cryptocurrency as a hedge against currency Debasement.

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ANECDOTE

Early Career

Ted Seides started his career at the Yale Endowment, working under David Swensen.
This experience shaped his investment style by providing valuable lessons early on.

insights

INSIGHT

Yale's Diversification

Yale's investment approach emphasizes diversification beyond US equities.
Seides learned about hedge funds and stocks simultaneously, developing a broad perspective.

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ADVICE

Manager Selection

Focus on identifying and partnering with top-tier managers instead of competing directly.
Develop expertise in finding, partnering with, and structuring those partnerships.

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The Art of Strategic Investing

04:08 • 10min

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Navigating Cryptocurrency and Hedge Funds

14:00 • 9min

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Navigating Hedge Fund Access and Fees

22:44 • 8min

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Investment Strategies and Hedge Fund Dynamics

30:19 • 10min

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Insights from Hedge Fund Conversations

40:43 • 12min

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Investing Insights and SPACs

52:27 • 6min

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The Model

37 Years Investing in Asian Equities

Richard Lawrence

The Model explores Overlook Investments' journey in Asian equities, detailing the philosophies and practices that have driven its success. The book includes case studies on the 1997/98 Asian Crisis and TSMC, along with insights into Overlook's investment model and experiences in China. It also discusses future challenges and opportunities for sustained success.

The intelligent investor

Jason Zweig

Benjamin Graham

Written by Benjamin Graham, 'The Intelligent Investor' is a seminal work on value investing that has inspired millions since its original publication in 1949. The book emphasizes the importance of distinguishing between investing and speculation, calculating the intrinsic value of companies, and maintaining a margin of safety. The revised edition includes updated commentary by Jason Zweig, who provides modern examples and insights to help readers apply Graham's principles in today's market. Warren Buffett, a disciple of Graham, has praised the book as 'the best book about investing ever written'.

Mastering the market cycle

Getting the Odds on Your Side

Howard Marks

In 'Mastering the Market Cycle: Getting the Odds on Your Side,' Howard Marks provides a comprehensive overview of market cycles, emphasizing the importance of understanding the patterns of ups and downs influenced by economics, markets, companies, and human psychology. Marks draws on his decades of experience to explain how investors can position their portfolios to take advantage of market cycles by studying past cycles, understanding their origins, and remaining alert for the next cycle. The book highlights that market cycles are driven by cause-and-effect relationships and that investors should prepare rather than predict market outcomes. It also delves into the psychological markers and emotional factors that influence investor behavior during different phases of the cycle.

The Science of Hitting

John Underwood

Ted Williams

This book, written by Ted Williams and revised in 1986, offers comprehensive advice on hitting in baseball. It includes detailed illustrations, anecdotes from Williams' career, and concise coaching on various aspects of hitting such as thinking like a pitcher, developing a smooth line-driving swing, hip and wrist action, pitch selection, bunting, and hitting the opposite way. Williams, who was the last player to break the . 400 batting average barrier, shares his analytical approach and emphasizes the importance of practice and adjusting techniques to achieve mastery in hitting.

Margin of Safety

Risk-Averse Value Investing Strategies for the Thoughtful Investor

Seth Klarman

In 'Margin of Safety', Seth Klarman discusses his views on value investing, drawing from the concepts of Benjamin Graham and David Dodd. The book critiques speculative investing and institutional investing practices, advocating for a disciplined and risk-averse approach. Klarman emphasizes the importance of understanding the intrinsic value of investments, avoiding false precision in valuations, and maintaining a margin of safety to mitigate potential losses. The book is divided into sections that cover the philosophy of value investing, the critique of institutional investing, and practical strategies for determining value and managing portfolios.

Narrative Economics

How Stories Go Viral and Drive Major Economic Events

Robert J. Shiller

In this book, Robert J. Shiller argues that economic events are significantly driven by contagious narratives or stories that spread among the public. He contends that these narratives, whether true or false, can go viral and impact economic decisions, such as investments, spending, and saving. Shiller uses historical examples, including stock market crashes, the rise and fall of Bitcoin, and the Great Depression, to illustrate how these narratives shape economic outcomes. He advocates for incorporating the study of these narratives into economic analysis to better predict and mitigate financial crises and other major economic events.

Poor Charlie's Almanack

The Essential Wit and Wisdom of Charles T. Munger

Charles T. Munger

Peter D. Kaufman

Originally published in 2005, Poor Charlie's Almanack is a collection of eleven talks delivered by Charles T. Munger between 1986 and 2007. Edited by Peter D. Kaufman, this book draws on Munger's extensive knowledge across various fields to provide a framework for rational and rigorous approaches to life, learning, and decision-making. It is renowned for its sharp wit and rhetorical flair, making it an essential read for investors, entrepreneurs, and anyone seeking to enhance their wisdom and critical thinking skills.

Principles

Ray Dalio

In 'Principles: Life and Work', Ray Dalio shares the principles he has developed over his career that have helped him achieve success. The book is divided into three sections: the first section explains how Dalio's principles were formed from his personal and professional experiences; the second section outlines life principles, such as embracing reality, being radically open-minded, and understanding the importance of pain and reflection in personal growth; and the third section focuses on work principles, including the use of radical truth and radical transparency to transform an organization. Dalio advocates for systematizing decision-making into algorithms, learning from failures, and building a culture where it is okay to make mistakes but unacceptable not to learn from them.

The essays of Warren Buffett

Lessons for Corporate America

Warren Buffett

This book is a comprehensive collection of Warren Buffett's annual letters to Berkshire Hathaway shareholders, edited by Lawrence A. Cunningham. It provides valuable insights into Buffett's investment philosophy, corporate management, and business strategies. The letters are organized into thematic chapters, making it easier for readers to understand Buffett's views on various topics such as value investing, executive compensation, and market fluctuations. The book is praised for its clarity, wisdom, and practical advice, making it a definitive source for understanding Buffett's approach to business and investing.

Pioneering portfolio management

An Unconventional Approach to Institutional Investment, Fully Revised and Updated

David Swensen

This book provides a comprehensive guide for actively managed investment portfolios, drawing from David F. Swensen's experience as Yale's Chief Investment Officer. It outlines an unconventional approach to institutional investment, focusing on non-traditional assets such as private equity and venture capital. Swensen offers insights into asset allocation, risk management, selecting investment advisers, and navigating market pitfalls. The book is filled with real-world examples and strategies that have contributed to Yale's endowment's remarkable annualized returns of 16. 2 percent.

More Than You Know

Finding Financial Wisdom in Unconventional Places

Michael J. Mauboussin

This book offers a unique blend of practical advice and sound theory, drawing from various sources and disciplines such as casino gambling, horse racing, psychology, and evolutionary biology. Mauboussin emphasizes the importance of a multidisciplinary approach to investing, covering topics like investment philosophy, psychology of investing, innovation and competitive strategy, and science and complexity theory. The book is written for professional investors but extends beyond the world of economics and finance, providing tools to better understand concepts of choice and risk. It includes fresh thoughts on human cognition, management assessment, game theory, and the mechanisms driving market mood swings, making it a valuable resource for long-term financial results.

Thinking in bets

Making Smarter Decisions When You Don't Have All the Facts

Annie Duke

In this book, Annie Duke teaches readers how to make better decisions by treating them as 'bets' on uncertain outcomes. She emphasizes the importance of distinguishing between the quality of a decision and its outcome, acknowledging the role of luck, and avoiding biases such as 'resulting' and hindsight bias. Duke draws on her experiences as a professional poker player and combines these with insights from cognitive psychology and other fields to provide tools for making more objective and thoughtful decisions. The book encourages readers to get comfortable with uncertainty, seek truth through diverse opinions, and learn from outcomes to improve future decision-making.

Capital Allocators

Ted Seides

Capital Allocators by Ted Seides offers insights into the world of institutional investing, drawing from interviews with top professional investors. The book covers best practices in decision-making, leadership, and investment frameworks, providing a unique perspective on how elite money managers operate. It serves as a reference manual for current and aspiring Chief Investment Officers and those involved in capital allocation.

In today’s episode, Trey sits down with Ted Seides to talk about how the world’s elite money managers lead and invest. Ted has had an incredible career as an allocator, having started under the tutelage of David Swensen of the Yale Endowment, before starting his own multi-billion dollar alternative investment firm.

IN THIS EPISODE, YOU'LL LEARN:

The playbook for Chief Investment Officers of hedge funds or institutions
Where retail investors can have an edge
When to and when not to invest in a hedge fund
Deeper dive into Ted's infamous bet with Warren Buffett
What Ted has learned from his relationship with Warren over the years

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Capital Allocators Podcast
Capital Allocators Book
Listen to our previous interview with Ted Seides

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