My Worst Investment Ever Podcast

BIO: Gisela Hausmann graduated with a master’s degree in film & mass media from the University of Vienna. She’s one of a dying breed of adventurers – she digs in and researches topics of interest from the ground up, then tells things as she sees them.STORY: Gisela joins the podcast again, discussing her new book Winning @ Amazon. Today she shares advice on how employees can allocate their creativity in a way that’s appreciated. She also talks about why employees need to start thinking outside the box and focus on problem-solving and innovation instead of feeling sorry for themselves and staying stuck where they’re not appreciated.LEARNING: Encourage and appreciate your employees’ creativity. “Appreciated creativity creates more creativity.”Gisela Hausmann Guest profileGisela Hausmann graduated with a master’s degree in film & mass media from the University of Vienna, the oldest university in the German-speaking world.She is one of a dying breed of adventurers – she digs in and researches topics of interest from the ground up, then tells things as she sees them.An author of two dozen books, her work has been featured in regional, national, and international publications, including GeekWire, Inc, Success (print magazine), Entrepreneur, and Bloomberg’s podcast ‘Decrypted.’ She is also the winner of the 2016 Sparky Award “Best Subject Line.”Born to be an adventurer, she hiked in the Himalayas and the Gobi Desert, crossed Russia on the Trans-Siberian Railway twice, and meditated in the Dalai Lama’s private room at the Potala Palace in Lhasa, Tibet.Her motto is: “Don’t wait. The time will never be just right.” – Napoleon HillEncourage employee creativityGisela Hausmann first appeared on the podcast in episode 539, where she narrated how Amazon implemented suggestions she’d made in her book Inside Amazon: My Story. Gisela is back with a new book Winning @ Amazon. Today she shares advice on how employees can allocate their creativity in a way that’s appreciated. She also talks about why employees need to start thinking outside the box and focus on problem-solving and innovation instead of feeling sorry for themselves and staying stuck where they’re not appreciated.According to Gisela, companies consistently ignore the input from clever, hardworking, dedicated people and—seemingly—perceive them as “irrelevant little cogwheels in a big machine.” Senior management is often threatened by subordinates who seem more innovative than them, and it’s no wonder they ignore their creative suggestions. This has led to employees choosing to keep suggestions to themselves, and this is killing most organizations, especially the big ones.Gisela advises organizations that want to encourage employee creativity to make a written plan. Define how employees who come up with ideas implemented in the company will be rewarded. Ensure that your rewards are something better than an in-house product. It should be something special that makes the employee feel appreciated. Gisela insists on the written plan because if you don’t encourage creativity in black and white, it won’t happen.You create positive energy in your business by acknowledging that you need creative ideas from your people and encouraging them. When you create positive energy, everybody wants to stay with you, and they carry this energy into the rest of the world.Parting words “If your employees carry forward who you are, they will bring the people to you.”Gisela Hausmann [spp-transcript] Connect with Gisela HausmannLinkedInTwitterBooksAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Connor Steinbrook is the Founder of the EXP realty Wolfpack Revenue Share Organization, with more than 2,700 agents operating in all 50 states and 12 countries. The group closed almost 10,000 houses and 3.5 billion in sales in 2022.STORY: Connor came across a house in a high-priced area that was being sold for dirt cheap. It caught his attention, and he decided to buy it. It turns out the person who sold the house to Connor had killed the homeowner and stolen his identity.LEARNING: Always be careful when going into properties to meet strangers. Before you go to view a property, ask the right questions and do due diligence. “Just because you wouldn’t do something or you wouldn’t think that this could happen doesn’t mean that people think the way you do and that they’re not setting you up.”Connor Steinbrook Guest profileConnor Steinbrook is the Founder of the EXP realty Wolfpack Revenue Share Organization, which has more than 2,700 agents operating in all 50 states and 12 different countries. The group closed almost 10,000 houses and 3.5 billion in sales in 2022.Worst investment everWhen Connor started in real estate, he got a regular appointment to check a property out. The property was an old house that looked like a single-family house but was built in a duplex-type way. The property was in a high price point area, and the owner asked for a very low amount that didn’t make sense. The owner was not there, and after waiting for a while, Connor decided to go home. After about 15 minutes on the highway, the owner called him, and since the numbers looked so good, he decided to go back.Connor found the door open, and when he went in, he couldn’t believe his eyes. It was quite a rundown house. While doing a tour of the place, he had this strong intuition that there was something off about it. But he shook off the feeling and went ahead and bought the property.About six weeks later, Connor got a phone call from a detective of a famous murder detective show in Dallas. The detective informed Connor that a resident had found a dead body at one of his properties, and he needed him for questioning.It turns out the guy Connor had bought the rundown house from was not the actual owner. The guy had murdered the homeowner, buried him in the backyard, and stolen his identity to sell the house.Lessons learnedAlways be careful when going into properties to meet strangers.Andrew’s takeawaysThings happen when you’re least prepared and least expecting it.Actionable adviceBefore you go to view a property, ask the right questions and do due diligence. When you go for the viewing, take another person with you.Connor’s recommendationsConnor recommends several books for self-education and development:Think and Grow RichOutwitting the Devil: The Secrets to Freedom and SuccessAs A Man ThinkethThe Richest Man in BabylonNo.1 goal for the next 12 monthsConnor’s number one goal for the next 12 months is to get his EXP organization to 10,000 agents. He also wants to develop properties in North Dallas as a long-term investment plan. Connor also wants to get his new YouTube channel to 10,000 subscribers this year.Parting words “Believe in yourself and never stop trying. In the end, it will all work out for you.”Connor Steinbrook  Connect with Connor SteinbrookLinkedInFacebookInstagramYouTubeAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast

BIO: In 2013, Zachary Resnick began to make a living from playing poker cash games and investing in other poker players, providing a unique understanding of risk management that is largely shaped through leveraging volatility to outperform others in the high-risk, high-reward situations of poker.STORY: Zach invested in two founders with a brilliant idea and overlooked the fact that they were not A+ founders. He ended up riding the company down by more than 80%.LEARNING: Back people that completely blow you away. People are super important, especially at the earlier stage of the business that you invest in. “When investing in early-stage companies, the qualities of the founders are paramount and almost inarguably the most important thing for that company.”Zachary Resnick Guest profileIn 2013 Zachary Resnick began to make a living from playing cash games and investing in other poker players, providing a unique understanding of risk management that is largely shaped through leveraging volatility to outperform others in the high-risk, high-reward situations of poker.In 2016 he made his first personal investment in Bitcoin and, by 2017, was focused on investing and trading crypto full-time.In 2018 he founded Unbounded Capital, an early-stage venture capital firm focused on payment infrastructure.He is also the founder of FlyFlat - a luxury concierge service that specializes in last-minute, heavily discounted business and first-class air travel.Worst investment everZach’s company invested in these two founders, who loved the company’s media content on the blockchain world. The founders were building a solution that Zach believed was A+. It would be a 100x improvement to existing solutions. There was one problem, though; the founders were not A+ founders. This became the first startup Zach’s company rode down by more than 80% since he started the investment firm.Lessons learnedBack people that completely blow you away.People are super important, especially at the earlier stage of the business that you invest in.Know your investing style.Andrew’s takeawaysWhen investing in a startup, you’ve got to trust the founders, believe in the idea, have a ready market and ensure the startup has the muscle to execute the vision.Actionable adviceIf you’re in the startup investing business, especially in the early stage, meet with founders in-person before investing.Zachary’s recommendationsFor frequent, flexible travelers who fly business class and want to save money, Zach recommends checking out Fly Flat.To enhance deeper thinking, Zach recommends reading great books such as The Elephant in the Brain: Hidden Motives in Everyday Life and Thinking Fast and Slow.Zach recommends reading his first e-book, How A Scalable Blockchain Will Win, to learn more about how scalable and efficient blockchains will transform the internet and how data and payments operate worldwide.No.1 goal for the next 12 monthsZachary’s number one goal for the next 12 months is to have more spaciousness in his life so he can spend more quality time with his amazing partner. Zach is now focused on working smarter and a little less hard.Parting words “Thank you for having me today, Andrew. I’ve learned a lot today.”Zachary Resnick [spp-transcript] Connect with Zachary ResnickLinkedInTwitterInstagramYouTubeBlogPodcastBookAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast

BIO: After poor experiences with the financial industry early in his professional life, Chris Mamula educated himself in investing and tax planning.STORY: Because Chris trusted his parents, he also blindly trusted their financial advisor. It was only after he stumbled upon better financial advice that Chris realized he’d wasted well over $100,000 in fees and another $100,000 in taxes.LEARNING: Gain financial literacy and take responsibility for your financial situation. Don’t trust financial advisors blindly. “The less money you spend on your financial advice and financial products, the more money you’ll have to invest.”Chris Mamula Guest profileAfter poor experiences with the financial industry early in his professional life, Chris Mamula educated himself in investing and tax planning.He now draws on his experiences to write and speak about wealth building, investing, financial planning, financial independence and early retirement (FIRE), and lifestyle design at the blog “Can I Retire Yet?”.Chris is also the primary author of the book ChooseFI: Your Blueprint to Financial Independence.In addition, he works one-on-one with those looking to improve their finances and use them to create a better lifestyle as an advice-only financial planner with Abundo Wealth.Worst investment everChris was a college graduate with a master’s degree starting to learn how to make and spend money. Like many people, he was overwhelmed and intimidated by the technical parts of finance, investing, and tax planning. The advice Chris would hear everywhere was; if you need help, seek a recommendation from someone you trust. So he went to his parents, whom he trusted more than anyone else. Chris’s parents were generally decent with their money as far as stretching a paycheck, managing a budget, and taking care of their children’s needs.Chris didn’t realize that his parents used a financial advisor because they had no idea what they were doing. And because Chris trusted them so much, he started using the same advisor and blindly trusted everything he told him—no questions asked.After a decade of this, Chris finally stumbled into some better investment advice and found out all the mistakes he had made. He realized that over a decade, he had wasted well over $100,000 in fees and another $100,000 in taxes. Because he’d started it so early in life, it could easily be a million-dollar mistake when you compound it over time.Lessons learnedSo many conflicts with financial advice exist, so you can’t blindly trust anyone.When looking for an advisor, ask as many questions as possible. What does this person know well? Is there a conflict between your interest and theirs? Are you getting the best advice?Gain financial literacy and take responsibility for your financial situation.Andrew’s takeawaysInvesting is actually quite simple, but financial professionals often make it complicated.Never invest in anything that somebody calls you about.A piece of advice could work for someone but not necessarily for you.You have the right to ask for further clarification if you don’t understand the fees you’re being charged.Actionable adviceBe widely diversified and focus on the things you can control. You can’t control what market returns you’ll get or the sequence they’ll come in. But you absolutely can manage your own personal finances. So build your savings, put more money into the market, and draw down at low rates.Chris’s recommendationsChris recommends reading his book ChooseFI: Your Blueprint to Financial Independence. The book has taken many different stories and distilled them down into common principles that you can use to create your own adventure and story.He also recommends The Simple Path to Wealth: Your road map to financial independence and a rich, free life and any book by John Bogle to learn about tax efficiency, limiting your trading, locating your assets, being widely diversified, and more.No.1 goal for the next 12 monthsChris’s number one goal for the next 12 months is not to have a goal. He simply wants to decompress, refine his life, and return to a normal lifestyle. Chris wants to enjoy life over the next year.Parting words “It’s really not that hard. If you just take a little bit of time to educate yourself and find that confidence, you’re going to be very grateful in the long run.”Chris Mamula [spp-transcript] Connect with Chris MamulaLinkedInTwitterBlogWebsiteBookConnect with Michael HowellLinkedInTwitterWebsiteBookAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Michael Howell is CEO of CrossBorder Capital, a London-based FCA-registered, independent research and investment company he founded in 1996.STORY: Michael was once in a meeting with the governor of the Bank of Thailand, who told him they would cut interest rates the following week. Even though all possible data showed this would be a wrong move, Micahel believed him. The bank didn’t lower the rates; instead, it increased them.LEARNING: Don’t listen to what people say, particularly central bankers; watch what they do. When participating in macro investing, understand where you are on the liquidity cycle and where investors are positioned. “Don’t buy a market with a low PE because you think it’s cheap. It actually tells you a lot more about the liquidity background or about the investors’ positioning, which may be structural features of the markets.”Michael Howell Guest profileMichael Howell is CEO of CrossBorder Capital, a London-based FCA-registered, independent research and investment company that he founded in 1996. The firm provides asset allocation and capital markets advice to institutional investors and manages US$1 billion of assets.Worst investment everIn the mid-1990s, when Michael was working at ING Barings, there was evidence of some economies beginning to overheat. Michael had a lot of discussions with central bankers, and one of those meetings in early 1995 was with the governor of the Bank of Thailand. Michael remembers the governor saying that the bank would cut interest rates. Michael assumed that the governor wanted to inform people, so it’s not a shock that interest rates will be cut.In context, that was a crazy decision to make because Thailand was already overheating. The Chinese had previously overvalued the renminbi by about 30%, and the Japanese yen was beginning to strengthen significantly.The governor wasn’t honest because the Bank of Thailand raised interest rates instead of cutting them. This taught Michael never to listen to what central bankers are saying. Instead, he now looks at the numbers and the underlying backdrop.Lessons learnedWhen participating in macro investing, understand where you are on the liquidity cycle and where investors are positioned.Equity markets are best valued against inflation, not against bonds.From a global perspective, liquidity will likely be the primary driver of asset markets.Big currency appreciations destroy earnings, and currency devaluations boost earnings.PE multiples work very well at the individual stock level but certainly don’t work at the macro level.Andrew’s takeawaysDon’t listen to what people say, particularly central bankers; watch what they do.PE multiples are not a great measure when looking at the overall macro picture.No.1 goal for the next 12 monthsMichael’s number one goal for the next 12 months is to get more people to understand that liquidity is the key thing going forward.Parting words “Just watch the markets and understand what’s going on. Look at the data. Don’t read the central bankers’ lips; watch their hands.”Michael Howell [spp-transcript] Connect with Michael HowellLinkedInTwitterWebsiteBookAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever PodcastFurther reading mentionedBenjamin Graham (September 2008) Security Analysis: Sixth Edition, Foreword by Warren Buffett (Security Analysis Prior Editions)

BIO: Brady Slack is the owner of High Country Finance, LLC, a full-service tax and accounting firm based in Utah in the US. His purpose is to be a resource that helps everyone experience wealth while paying the fewest taxes possible.STORY: Brady came across a coaching group on Facebook that was good at marketing its coaching package. He was fascinated by the package and bought it for $50,000. While it was a good package, it wasn’t a good fit for him as it didn’t align with his business goals.LEARNING: Vet the mentor, coach, or advisor before you engage with them. Pick a mentor or a coach who embodies what you want to be. Don’t decide out of desperation or pressure. “If you’re going to make a decision or buy something, or spend money, go to bed first. If you still feel the same in the morning, do it. But if anything’s changed, rethink it.”Brady Slack Guest profileBrady Slack is the owner of High Country Finance, LLC, a full-service tax and accounting firm based in Utah in the US. His purpose is to be a resource that helps everyone experience wealth, all while paying the fewest taxes possible.Worst investment everWhen Brady turned 23, he quit his job at an accounting firm and started a business. He didn’t have the expertise or the experience to create an accounting firm, but he decided to do it anyway. A close friend, a successful businessman, told Brady that the quickest way to learn and grow is to hire someone. So Brady started seeking out mentors, coaches, and development opportunities.Brady connected with a group on social media that asked him to speak at their event. He felt this would be an excellent way to reach more people and boost his business. He later found out the group had an offer attached to the back end of the speaking engagement, including some coaching, marketing and advertising, and websites. This was an even better deal for Brady. This all came as a coaching package that cost over $50,000. Brady purchased it.While the coaching program was great, Brady soon realized that it didn’t necessarily align with where he wanted to go with his business. It just wasn’t the right fit for him.Lessons learnedIf you need more financial resources to pay for an opportunity, wait until you have it.Vet the mentor, coach, or advisor before you engage with them.Before you pick a mentor or coach, define your goals, your intentions, and what you want your outcome to be.Andrew’s takeawaysPick a mentor or a coach who embodies what you want to be.You may get less value from a generalist, so go for a specialist in your interests.Avoid getting sucked into the flashy coaches on your Facebook feed because those guys are great at selling but not necessarily great at coaching.Don’t decide out of desperation or pressure.Actionable adviceTake time to define what you want out of your venture clearly, and then look for someone who has already done that and reach out to them to mentor or coach you.Brady’s recommendationsBrady recommends getting as much information and education as possible from the numerous free online resources. Further, vet someone who can accelerate the growth within your venture and ask them to mentor you.No.1 goal for the next 12 monthsBrady’s number one goal for the next 12 months is to get his newly launched software to a point where it pays all its capital back and is profitable.Parting words “Just keep going. The road to entrepreneurship or becoming successful is 75% hard work, grit, and determination. The other 25% is just a little bit of luck.”Brady Slack [spp-transcript] Connect with Brady SlackLinkedInTwitterInstagramYouTubeWebsitePodcastAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Richard H. Lawrence, Jr., is the Founder and Executive Chairman of Overlook Investments Group, an independent fund management company established in Hong Kong in 1991.STORY: Richard invested heavily in a successful Korean company that brought him great returns until the founder died. The son took over and brought the stock to its demise.LEARNING: If it’s not working, get out. Invest in a company with no or minimal debt. Operating return is the purest way to measure profitability. “I’m a big believer in modest self-financed growth.”Richard Lawrence Guest profileRichard H. Lawrence, Jr., is the Founder and Executive Chairman of Overlook Investments Group, an independent fund management company established in Hong Kong in 1991. Overlook invests US$6 billion in a concentrated portfolio of public equities throughout Asia, excluding Japan.Richard and his wife, Dee, have founded several non-profit organizations; he’s a philanthropist who is devoted to climate change. He has two grown kids and lives in San Francisco, California.Worst investment everIn 1992, Richard discovered that stocks in Korea were incredibly cheap. He owned everything at 2-4x earnings. Richard owned a hair dye company and all kinds of oddball companies. Within that mix, there was one company that stood out. Korea, at the time, had massive debt. But this one company didn’t have any debt, so Richard was immediately attracted to it.Richard purchased shares in the company initially in 1992. At the time, the company was the largest synthetic fiber producer in South Korea, making spandex. It was a formidable company going from strength to strength. It became among Richard’s most significant holdings, the strongest of this cohort of Korean companies he owned.The company was founded by one of the greatest titans of the Asian textile industry. The founder was Korean and a larger-than-life figure in a manner unlike any other business leader in Korea in the lead-up to the Asian financial crisis when Korea went burst. He was a nonconformist in a culture that admired conformity. That was one of the reasons his company had no debt. He had the confidence and independence of someone who knew how to run a company for cash flow. Just as he disliked debt, he also disliked paying taxes. He was the most aggressive executive Richard had ever encountered in Asia or anywhere else. In one instance, he built a US$400 million facility, depreciated it over two and a half years, then revalued it and depreciated it a second time. By doing so, the founder minimized reported profits to minimize taxes and used cash savings to avoid debt. Richard liked this business model, so he invested heavily in it.The company did very well in the start-up years until the founder died. His son took over, but he struggled to fit into his father’s giant shoes. Richard thought he could help him be successful and worked on it from 1997 to 2000 during and after the Asian financial crisis. Richard gave him all the advice he could, but he was ignored. By 2000, with no concrete action taken by management, and no upward movement in the sock, Richard’s patience wore thin. Then the new leader crossed a red line and blatantly undertook an unfair related party transaction that effectively bailed out an insurance company owned by the family with cash from the spandex company.Richard, at that time, requested a reversal of the acquisition. He asked management to initiate paying cash dividends, execute a series of share splits, establish an IR department, and appoint additional directors that are at least partially independent. The largest internationally managed Korean fund cast the deciding vote against Richard ending the investment in a huge loss.Lessons learnedBeing an activist publicly doesn’t help.If it’s not working, get out.Invest in a company with no or minimal debt.Avoid the stock that’s the hype of the day.Operating return is the purest way to measure profitability and should be high. The higher it is, the better it is.Andrew’s takeawaysAn activist type of shareholder has its limits.There’s value in owning a diversified portfolio of stocks over a long period.Actionable adviceGo for companies with modest growth, don’t look for something off the charts. Build a portfolio of roughly 12 companies that can deliver a good operating return and rebalance it regularly.Richard’s recommendationsRichard recommends reading a lot of investing books. You can start with Buffett’s letters and then go to John Train’s books as you grow your library.Parting words “Beginners in this industry can learn from the tough lessons that we all went through.”Richard Lawrence [spp-transcript] Connect with Richard LawrenceLinkedInWebsiteBooksAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Vineer Bhansali is the CIO of LongTail Alpha. The firm was founded in 2015 to help provide risk mitigation strategies.STORY: In early 1993, most investors held a significant long position on the Eurodollar futures contract, betting that interest rates would go down. Vineer decided to follow the herd. The Fed increased rates, and Vineer kept buying until he lost his investment.LEARNING: Don’t follow the herd blindly. Success in the markets is all about timing. Have an investment framework within which you operate. “You’ve got to be very humble and disciplined with your loss thresholds and risk limits.”Vineer Bhansali Guest profileVineer Bhansali is the CIO of LongTail Alpha. The firm was founded in 2015 to help provide risk mitigation strategies. Vineer was a partner at PIMCO and started their first hedge fund and also started and managed their quantitative investment portfolio teams from 2000-2015.He has a Ph.D. in Theoretical Physics from Harvard University and has written six books on finance. He has also run over 60 ultramarathons. He is also an Airline Transport Pilot rated to fly jets and helicopters and has over 4,500 hours of flight time.Worst investment everVineer started at Citibank in late 1992, just after the 1987 big stock market crash. He was participating in a bull market created by an extremely easy central bank policy. At that time, probably the easiest trade to do was just to buy anything like fixed income or stocks, and it would go up.Veneer was at some dinner in late 1993, and everybody in that room held a pretty significant long position on the Eurodollar futures contract, betting that interest rates would go down. That should have been a signal that something was amiss. But as a young trader, seeing everything was going up, Veneer also got long Eurodollar futures.Then as a surprise, the Fed got a little worried in February of 1994 and raised interest rates by 25 basis points. The Treasury market started to fall, and Vineer thought it was a good time to buy, so he bought some bond futures contracts. The interest was raised again in March, and the market sank a little bit more. He kept buying more, hoping the rates would soon go down again. Eventually, his trades were blown over, and he lost his investment.Lessons learnedHaving an original idea is always good because you create value by being different.Don’t follow a herd blindly.Success in the markets is all about timing.Have an investment framework within which you operate.The markets are very demanding, and to survive, you need to take care of everything about yourself; your mind, your body, and your health.Andrew’s takeawaysThe market is a predator.Original ideas create value.Markets are a human construct, and you never know which way they can go.Don’t get too hooked on your creative idea because it may not be time right for it.Have an investment framework and follow it.Vineer’s recommendationsThere’s a lot of stuff that’s on Vineer’s website that can help with risk management. He also recommends reading The Feeling of Risk: New Perspectives on Risk Perception. Veneer highly advises people at this stage of the game to abandon some of the preconceptions about how stock markets or bond markets work and just go back and do some honest, independent research on what risk management means for themselves as an individual.No.1 goal for the next 12 monthsVineer’s number one goal for the next 12 months is to stay healthy. For his investors and portfolios, he wants to be very disciplined and positioned on the right side so he can deliver a stellar performance that matches the kind of strategies he has.Parting words “Take care of yourselves, stay healthy, and be passionate about what you do.”Vineer Bhansali [spp-transcript] Connect with Vineer BhansaliLinkedInTwitterWebsiteBooksAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Brenden Kumarasamy is the founder of MasterTalk; he coaches ambitious executives & entrepreneurs to become the top 1% of communicators in their industry.STORY: Brenden decided to promote his YouTube channel by sending 500 cold emails per day to university professors. After sending 2,000 emails, he received very negative responses. Instead of reviewing his strategy, he sent more emails for three months and got nothing out of it.LEARNING: Follow the data and remove emotion as much as possible when making decisions. Make sure your marketing content offers undeniable value. “If you want to be in the top 1% of any category, you need to behave in a way that 99% of people aren’t willing to.”Brenden Kumarasamy Guest profileBrenden Kumarasamy is the founder of MasterTalk; he coaches ambitious executives & entrepreneurs to become the top 1% of communicators in their industry. He also has a popular YouTube channel called MasterTalk, with the goal of providing free access to communication tools for everyone in the world.Worst investment everWhen Brenden started MasterTalk, he had this brilliant idea to send 50,000 cold emails to university professors in Canada and the US. His thought was pretty strategic. Even if 10% or even 1% of the recipients shared his videos with their college students every year, Brenden’s distribution would be unlimited, and his YouTube channel would explode in popularity.Brenden didn’t know how automated email campaigns worked, so he’d manually send 500 emails each day. He would open universities’ websites, pull up their faculties, find their emails, and start sending emails. About 2,000 emails into it—about a week into it—he started getting negative responses from the university professors. Brenden got so much hatred; it was insane.Despite the hate and realizing his strategy wasn’t working, Brenden didn’t stop after 2,000 emails. Being the 22-year-old knucklehead he was then, he spent the rest of that summer sending 500 emails daily for the next three months. After all that dedication, Brenden got just two positive responses.Lessons learnedFollow the data and remove emotion as much as possible when making decisions.There’s no silver bullet to entrepreneurship, just hundreds of lead bullets. So don’t push just one primary strategy, have hundreds of little different strategies.When something starts working for you, instead of guessing why it’s working, ask your customers. You’ll get to see what’s working, and through that, you’ll get the results you’re looking for.Andrew’s takeawaysTry A/B testing across many different things to determine where you’re making a breakthrough.When you send any marketing content, make sure it has some benefit to the recipient.Be relentless when you’ve got the right target, and follow up without giving up.Brenden’s recommendationsBrenden recommends subscribing to his YouTube channel to access hundreds of free videos on how to speak. He also does free live communication training on Zoom every two weeks. If you want to join that, go to Rockstarcommunicator.com and register for the next one.No.1 goal for the next 12 monthsBrenden’s number one goal for the next 12 months is to scale his business to another level to create more impact for everyone around him.Parting words “Realize that the relationship successful people have with failure is very different than the one unsuccessful people have with failure.”Brenden Kumarasamy [spp-transcript] Connect with Julian KlymochkoLinkedInInstagramYouTubeWebsiteAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast

BIO: Julian Klymochko is the CEO and Chief Investment Officer of Accelerate, a leading provider of alternative investment solutions.STORY: Julian got into an M&A trade where the acquirer had to stage a shareholders’ vote. This led to a hostile acquisition where the target company was bought by another acquirer that was not part of the deal. Julian made a significant loss in this trade.LEARNING: Never put on an M&A trade that has the buy side vote. Arbitrage doesn’t always mean a riskless trade. “The best way to learn is to practice by doing. So, try it out yourself, and don’t risk more than you can lose.”Julian Klymochko Guest profileJulian Klymochko is the CEO and Chief Investment Officer of Accelerate, a leading provider of alternative investment solutions. Accelerate helps investment advisors, institutions, and individual investors diversify their investment portfolios, manage risk, and improve their portfolio’s risk-adjusted returns. Prior to founding Accelerate in 2018, he was the Chief Investment Officer of Ross Smith Asset Management. He started his career as an Analyst at BMO Capital Markets. Currently, Julian is a Director of the CFA Society Calgary.He has been featured in some of the world’s top financial and business media, including Bloomberg, CNBC, The Wall Street Journal, BNN, Business Insider, and The Globe and Mail.Worst investment everJulian started out in the mid-2000s as a young investment banking analyst working 100 hours weekly. He was handling mergers and acquisitions (M&A) and advising. During that period, Julian worked on some exciting deals. He got excellent insights into the inner workings of M&A, equity offerings, and capital markets. It was a great place to start a career.From that, Julian went to a startup hedge fund. He cut his teeth doing closed-end fund arbitrage, which was a fantastic trade, specifically during the great financial crisis of 2008. He could generate nearly risk-free returns that, at one point, were yielding 50% to 100% annualized returns because there was very low liquidity in the market, and people were desperate to sell. So arbitrage spreads were extensive. After that, Julian got into different arbitrage strategies; volatility arbitrage, convertible arbitrage, and one of his and Warren Buffett’s favorites, risk arbitrage.In 2012, Julian launched a standalone risk arbitrage strategy. He started with a $5 million investment from a handful of wealthy investors to conduct this risk arbitrage investment strategy. Risk arbitrage aims to generate high returns consistently—ideally, double-digit annualized returns and no down years.For the first four months, Julian put a lot of pressure on himself and was sick to his stomach every morning. But he still had a terrific first year with low volatility. Julian produced a double-digit return with low volatility and minimal drawdown. So investors were happy. The fund continued with that excellent trend for the first three years and grew significantly.2015 was an interesting environment in the M&A business. It was open season for pharmaceutical mergers. There was this popular trend called tax inversion. Tax inversion was where pharmaceutical companies would take over a foreign company to re-domicile offshore to lower their tax bill significantly. That trend buoyed M&A activity as domestic US pharmaceutical companies rapidly sought to conduct tax inversions by acquiring non-domestic competitors.At the time, a company called Valeant Pharmaceuticals was rapidly consolidating the pharmaceutical space. Their business model was dramatically different than their competitors—the old-school pharma companies. The company hired a former McKinsey consultant, Michael Pearson, to run Valeant. The company had already conducted a tax inversion and was now Canadian-based and not part of the S&P 500. It was part of the Canadian benchmark, the TSX. With that, their attitude toward growth was utterly different. Michael Pearson’s thesis was such that R&D is wasteful. The company grew through acquisitions. They would do hostile takeovers and gobble everyone up. This strategy was working. Their stock was doing exceptionally well.Everyone was praising the accolades of Michael Pearson and his business model. It became a highly respected strategy on Main Street and Wall Street. Analysts were going gaga over it, and investors loved it, creating copycats.Tax inversions were still all the rage, and Julian was active on these within the fund’s portfolio. Julian had this one particular M&A trade that looked quite attractive. The company, QLT, was a failed biotech company with just a bunch of cash. They were trading at roughly cash value, with few prospects aside from the money they had on the balance sheet and perhaps some tax losses. But one redeeming factor was that they were Canadian, not American, making it a prime candidate for an inversion. That inversion came through a definitive merger agreement with a US company called Auxilium. Auxilium was looking to run this new pharma playbook, re-domicile offshore by a tax inversion merger, then conduct M&A growth like Valeant.The requirements to consummate this merger were a successful shareholder vote by QLT shareholders. Additionally, since Auxilium was issuing approximately 25% of its outstanding shares in this merger, its acquirers’ shareholders would have to approve the deal. So they struck a deal with a 5% spread that would close in three months. A 5% spread over three months would be about 20% annualized, a handsome return.This trade was 4% of Julian’s fund’s portfolio, both long and short. Over time, Julian felt that a lot of consolidation was happening. He was worried that someone could make a play for Auxilium and acquire the stock in which his fund had a significant short position, which could lead to a considerable loss. So Julian decided to buy call options on Auxilium, utilizing some of that spread available to protect his fund in that awful potential scenario.A few months after putting on this trade, the worst-case scenario Julian had imagined happened. A pharmaceutical company run by Michael Pearson’s protege came and made a hostile takeover bid for Auxilium, the target acquirer in this M&A deal. Julian’s fund suffered a massive loss from this deal.Lessons learnedNever put on a merger arbitrage trade in which the acquirer has to stage a shareholder vote because it makes you vulnerable to a hostile takeover.Andrew’s takeawaysBe careful when dealing with arbitrage. It doesn’t always mean riskless arbitrage.Julian’s recommendationsJulian recommends Twitter as an excellent resource for information. You can follow him @JulianKlymochko. Julian also posts a lot of research and insights on his website that can help you, especially if you’re starting out. You can also check out other investment websites, such as Value Investors Club, where you’ll find professional research.Julian also has a couple of favorite investment books that he recommends:You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market ProfitsMargin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful InvestorThe Intelligent Investor Rev Ed.: The Definitive Book on Value InvestingAny book from Peter LynchParting words “Teach a man to fish, feed him for a day. Teach a man to arbitrage, feed him for life.”Julian Klymochko [spp-transcript] Connect with Julian KlymochkoLinkedInTwitterPodcastWebsiteAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramTwitterYouTubeMy Worst Investment Ever Podcast