It’s the age-old question in the investment world. Truth to tell, no one has a really good answer. There is no true science to investing, and certainly not for Private Equity/VC investments. The ugly truth is that most professional investors aren’t very good at it; That’s one of the reasons so few of them outperform major indexes over any reasonable period of time. VCs, on average, are even worse. Most of their investments are dogs, and few ring up truly superior returns.
Well after 30 years in the money business, dealing with some of the most sophisticated and savvy super investors in the world, here are my 10 tips which I hope will broaden your minds further.
1. Correct conceptual understanding of investing.
There are plenty of investment theories around. Some are valid, others are nonsense. Your ability to choose a solid investment philosophy is critical. Whatever theory you choose, make sure you understand it inside out. As Warren Buffett keeps saying ” Never invest in a business you can’t understand”. So the first step of being an exceptional investor is to know your stuff like a “master”.
For More: WHAT MAKES AN EXCEPTIONAL INVESTOR
On March 18th 2014 the US Federal Reserve Chair Janet Yellen stated the need for “reasonable confidence” in order to effectuate a more conservative monetary policy focusing on interest rate raise. Chair Yellen has indicated four macroeconomic factors that need to be further monitored.
• The labor market with further unemployment rate decline;
• A continued rise in currently slumped wages;
• Core inflation stabilization (independent of energy ‘push’);
• A higher “market-based” expected inflation rate.
The Fed’s decision to hold off on short term rate hikes comes one week after its macroprudential bank stress tests. Notable amongst the results was the “conditional approval” of Bank of America’s capital plan, with complete rejection of Deutsche Bank and Santander’s capital plans. It is clear that under Yellen the Federal Reserve is attempting to uphold the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
From a general standpoint, it is also quite glaring that the Federal Reserve as a central bank is fast adopting more of an eco-political role as a quasi-indirect financial system regulator through financial system monitoring. As has been mentioned before, monetary policy is the fastest mechanism to quell financial system defects, as fiscal policy results tend to lag.
For More: Financial Policy Best Practice Framework
First off, thank you for being part of my social media “inner circle”…. You are in here because we have much in common and I always appreciate your insight.
As we’re entering the latter part of the year, I thought I’d share and explore with you ways I can best help you “monetize” your skills and network and see where we go from there.
1. I am one of the Founding Partners, President & CEO of Blackhawk Partners, Inc. a private “family office” that is in the business of originating, structuring and acting as equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings, and trading key physical commodities
2. I am the Founder & Chairman of the Board of the Financial Policy Council ; a 501 (c) (3) non-profit organization designed to give its select group of supporters the opportunity to have direct face-to-face dialogue with the nation’s quintessential powerbrokers and policymakers along with members of the media at large while educating both as to the implications of the actions being currently taken by the Obama Administration and proposing alternative solutions designed to influence the decision making process when it comes to overall fiscal policy.
For More: Monetizing your skills and network
I believe success is all about empowering people. The more people you empower, the more money and power one acquires in addition to having an ever increasing impact on his/her constituency. Empowering people is in fact and in my opinion better than education and management hierarchy combined.
The Key question then becomes: How do you truly empower people?
I believe there are several ways to do it. Empowering is really like fueling them with the guns they need to shoot. Here are some ways:
1. Build a culture. Empowerment will not happen if there is a culture that doesn’t back it. A culture where challenges are thrown at people and their perspective is accepted, appreciated in handling the challenge. Form a team that helps , supports in getting team members do things. Let them realize that what they are doing is good even if they fail. Help them do things that are one step ahead and not in their job roles.
For More: About Empowering People
I am often asked what are the key industries that are positioned to be today the most disruptive ones out there and which we at Blackhawk Partners would be very keen on taking a real close look at.
So I thought of sharing some of them with you in the hope of catching your attention and sharing feedback.
1. Natural Gas:
I believe Natural gas is still in the very early stages of general adoption, and that there is a huge potential in the making in here … at least to become a more self-sufficient energy focused nation. Though natural gas engines currently comprise 3 percent of truck engines, I predict that penetration will rise to 10 or 15 percent by 2020–allowing investors to capitalize on “niche truck and bus applications.”
For More: How Disruptive Is your Investment Model?
Austrian Economics is a school of economic thought that is based on methodological individualism. It originated in late-19th and early-20th century Vienna with the work of Carl Menger, Eugen von Bohm-Bawerk and others…
Some of the key principles of the Austrian school include but are not limited to:
1. Individualism. First and foremost, Austrians are believers in individualism, as opposed to forced government collectivism. The most efficient economies are free economies because they tap into people’s unique, innate incentive structures. Government involvement in economies stifles individual incentive because they take capital from all and reallocate it to some, creating an inequality and inefficiency which undermines the natural free incentive structure. Individualism does not mean selfishness, it literally just means the freedom for individuals to choose for themselves. People are naturally motivated to provide for other people, including their families, communities, and causes they believe in. Rather than ‘donating’ their income to the government, Austrians believe that under truly free market economies prosper and that greater wealth both improves the general standard of living and allows privately funded charities to prosper as well.
For More: Austrian v/s Mainstream Economics
“Anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist.”
― Kenneth E. Boulding
Yes it is always easy to poke fun at economic forecasts, especially because they usually turn out to be wrong, often by a large margin. However, before laughing them off, think about what is being asked of those forecasts and the economists making them by considering the below analogy.
I presume that most of you reading this own a car and have a license to drive it. The license certifies you to be minimally competent drivers, sort of the way a Ph.D. certifies an economist to have a minimal command of economics. Nonetheless, it is very easy to prove that you are all incompetent fools who know nothing about how a car works or how to drive it and thus to prove that drivers’ licenses are a big joke.
For More: About Those Mad Egomaniacs We Call Economists
Well this encapsulates the American psyche to the letter for people who are still trying to figure out what American Power really means.
While I don’t approve of the American Global Empire, I respect the intelligence and drive of those tasked with maintaining and expanding it–and they number in the millions.
Bottom Line: There is only one nation-state which can project hard power today and it is the U.S. A missile is not power-projection, because it exerts control over nothing; it is deterrence or threat, but not power that can be projected. Only aircraft carrier groups and the ability to transport an army by sea and air to any locale in the world is power projection.
It is a fact to everyone today that the U.S. is the only great power with true power projection because it alone has hegemony over the world’s reserve currency. The U.S. skims a stupendous arbitrage profit from creating dollars and exporting them in exchange for real goods.
For More: The US Global Geopolitical Future
The horrendous attacks on Charlie Hebdo and a kosher market excited the entire world. No matter what President Obama said, the attackers did not “randomly shoot a bunch of folks in a deli in Paris.” There was a very deliberate plan in place. The targets were obvious: a magazine that made fun of the Prophet Mohammed and Jews. However, there was a target that was not so obvious. The Kouachi brothers fled Paris to a printing shop in a nearby industrial park. This was not just a panic escape; it was deliberate and a pre-planned destination. It is that part of the plan that attracted the attention of many intelligence analysts.
The shop was seven miles from Charles de Gaulle International Airport and along major flight paths. The brothers were carrying an M72 anti-tank rocket launcher or the Yugoslav copy of that weapon. The range for both is 3300 ft. We now know that the brother’s plan included an attack on aircraft along the flight path. Keeping the attention on the smaller attacks was deliberate so as not to cause panic as the French police and intelligence services sought out others who may be part of this larger, and more dangerous, plan. Statements by the brothers made it plain that they had brought the war by ISL to Europe
For More: We are at War With a Very Islamic Global Terror Network. Like it or Not
The recent collapse in oil prices has arguably been the most startling and far-reaching market development since the Global Financial Crisis. It has also and again shifted the world’s eyes towards OPEC – The Organization of the Petroleum Exporting Countries – an organization established in Baghdad, Iraq in September 1960 and headquartered in Vienna.
For those not familiar with OPEC, the organization’s mandate is to “coordinate and unify the petroleum policies” of its members and to “ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.
In 2014 OPEC comprised twelve members: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
For More: OPEC – Facts v/s Fiction