Einhorn’s youthful persona—his boyish looks, his habit of bringing his parents to public speaking events, his tendency to litter PowerPoint slides with cartoons and animal pictures—helps to obscure that he’s already lived through much of the textbook life cycle of the superstar hedge fund manager. Impossibly smart at a young age, he hung his own shingle at 27, then made billions for his clients by discovering the one investing strategy that he was extremely good at—producing fanatical levels of research and unapologetically embracing the short sale—and doing it over and over again.
Category: Finance
Landlord Blackstone Rushes To Capitalize On Housing Bubble
Blackstone is the largest asset manager in the sector, and demand for a securitization is thought to be so strong that any deal could go forward without needing credit ratings.
A Resurgent Goldman Can Reshape Wall Street
Indeed, had such a plan been in place in the years leading up the collapse of Lehman, I bet the bank would still be around, because former Chairman Richard Fuld and his acolytes would have been far more prudent. They would have taken the time to analyze the risk the company was taking on, which is exactly what Goldman Sachs did in late 2006 when it decided to short the mortgage market to take advantage of its competitors’ foolishness.
William D. Cohan is certainly right about his statement. But the problem doesn’t simply lie behind prudent behavior, it is also Goldman not being in-line with its clients, to the mind of general public. Take a look at the comments, no one seems to care about Goldman changing its internal compensation model for the top-tier of the payroll, because to most people’s mind Goldman is morally bankrupt.
Greed + Confirmation Bias = Disaster
It’s a natural human tendency to seek out conforming opinions – people who agree with us. It makes us feel “right” and good about our decisions. In the investing world, however, this is dangerous. When I form an investment thesis, I’m always trying to figure out why it’s WRONG, not why it’s RIGHT. I want to know the thesis of the guy on the other side of the trade as me – and then I can evaluate whose thesis is stronger.
The Religion of Entrepreneurship
In relgious communities, when someone is in need, the community rallies around them. People do kind things to other people just because it is the right thing to do. The startup world has a similar shared value; investors, CEOs, and service providers throughout the entrepreneurial ecosystem are always willing to lend a hand, donate time, and provide guidance and counsel.
Abnormal Capitalist 