Karl-Mikael Syding was a hedge fund manager for 15 years. In 2010, Futuris, his 1.3 Billion dollars global long and short equity hedge fund received Hedge Fund Review's award as "The European Hedge Fund of The Decade". As one of three partners at Futuris, his responsibilities included investments in financials, software & IT services, plus professional support services and leisure. Before joining Futuris, he was the head IT analyst at Sweden’s largest bank, covering mainly Nordic Software and IT services stocks.
Mikael has a Master’s degree in financial economics from the Stockholm School of Economics. He retired from Futuris in 2014 to pursue the meaning of life.
In this episode, Mikael shares his worst investment ever story, how their Futuris hedge fund lost over $100-million during the Greek government debt crisis. Because of this experience, he realized the importance of neutrality when making big financial decisions.
“Do not be afraid. Losing is the lesson that you will benefit the most from.”
- Karl-Mikael Syding
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Topics Covered:
01:01 – Karl Mikael Syding’s professional and personal background
02:12 – His breakthrough moment realizing gratification from luxury lifestyle is not the true fulfillment
04:15 – His advice for people who want to pursue buying luxury things, the importance of awareness in identifying wants and needs
04:15 – His advice for people who want to pursue buying luxury things, the importance of awareness in identifying wants and needs
06:22 – The financial backstory of his worst investment
08:01 – Massive debt build-up: Impact of low-interest rate and Greece overspending habits
12:35 – The defining moment of his worst mistake- European Central Bank’s reinterpretation of the Rulebook of Central Banking and the support to the Government
15:33 – His partner’s decision to close the position
17:07 – Lessons from the experience, taking neutrality, relearning old lessons of finance
19:03 – Andrew’s takeaways from Mikael’s experience, taking about zero-based thinking
22:17 – Mikael’s actionable advice to help listeners protect their investment: Avoid hiding and hoping. Talk about the situation and explain it in details to others.
Main Takeaways
- Lesson 1: Take some kind of a pause or break. If it is in financials, just neutralize the position for a while and think about it. Because then you might get another kind of perspective on what you are doing. Because as long as you are in the heat of it is difficult to think clearly.
- Lesson 2: Realize that if things are going against you in such a big way, then there is something you are not understanding. Even if it is not on the fundamental level it could be something completely different. It could be the flow of money, other people’s perceptions. Just be open to the idea that an unsustainable situation can actually be prolonged for a very long time.
- Lesson 3: Politicians will really do anything. It doesn’t really matter what the rules are. They will bend and reinterpret certain wordings and get central bankers in line. Assume that the current rulebook will be honored.
- Lesson 4. Try not to invest in things that you are relaying in the government. When you are waiting for the government to give permission to do something. Government’s change and they do not have your interest at heart when it comes to investing. One political group could be out and another one in.
- Lesson 5. Do zero-based thinking. In stocks, if you do not own it today, will you add it to your positions? If the answer is no, then it is probably a good sign to get out.
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My Worst Investment Ever Podcast