WHAT MAKES AN EXCEPTIONAL INVESTOR

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

Thank You,

Long Trend Of Jobs Data Shows Zombie Recovery for Professionals

Suspicions among white-collar professionals that the recovery is an illusion, or at least has left them behind, are validated by official government data buried in the monthly employment reports, based on household surveys, which few bother to actually read.

Even more worrisome is the continuation of a decade-long decline in the number of self-employed, a category which includes many of these same professionals.

While even the seasonally-adjusted employment data show an uptick in five of the six unemployment measures (Table A-15 of the January 2015 jobs report, available at http://www.bls.gov/news.release/empsit.t15.htm), the unadjusted numbers in the same table show a measurable increase in unemployment.

For More:  Long Trend Of Jobs Data Shows Zombie Recovery for Professionals

Thank You,

Financial Policy Best Practice Framework

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.

For More:  Financial Policy Best Practice Framework

Thank You.

Monetizing your skills and network

Folks

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.

Basically,

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

For More: Monetizing your skills and network

Thank You,

Things About Being Wealthy

I am often asked what is it to be wealthy that most people don’t know much about.

Well here are some facts that may surprise you and that you may or may not have imagined along with some tips as to how to best deal with it.

1. Being wealthy is an incredibly isolating experience. What I mean by that is you can’t really complain about your problems except within your small circle of rich friends. Otherwise, you will sound like an asshole. Even if you do, non-rich people can’t really empathize with you. There are a few other problems associated with being rich such as family/friends asking for money, unexpected jealous reaction from friends/family, pressure to deal with more complex tax, estate planning and investment planning, etc… The joy of “set for life” doesn’t seem to offset the anxiety from hoarding the huge sum of money.

In addition, when you don’t work because you are rich but can’t hang out with your friends who have to work during the week, you feel like an outcast of society. Best way to deal with it? Stay focused, keep working at what you do best – Work is healthy – and enjoy what you have with people you carefully selected and feel comfortable with.

For More: Things About Being Wealthy

Thank You,

Time To Wake Up America and Tell Arabs to shove their Oil

There’s a legitimate debate right now about what America should do about ISIS, Syria and the Middle East at large.
 
No one in Washington though wants to talk about the real reason we’re there in the first place: Oil.

We’re dependent on foreign oil and OPEC has it, so keeping peace in the Middle East has been our top foreign policy priority for over 30 years. Over the last decade alone we spent more than $4 trillion and lost thousands of American men and women on military missions to protect Middle East oil.

How long is this going to last?

It was over 40 years ago, November 7, 1973, that President Nixon first called in a major speech for action on an energy plan called “Project Independence”

For More:  Time To Wake Up America and Tell Arabs to shove their Oil

Thank You,

How Disruptive Is your Investment Model?

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?

Thank You,

Austrian v/s Mainstream Economics

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 stifle 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.

For More:  Austrian v/s Mainstream Economics

Thank You,

About Those Mad Egomaniacs We Call Economists

“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

Thank You,

The US Global Geopolitical Future

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

For More: The US Global Geopolitical Future

Thank You,

War With a Very Islamic Global Terror Network

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:  War With a Very Islamic Global Terror Network

Thank You,

OPEC – Facts v/s Fiction

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

Thank You,

Would Further Economic Sanctions Against Iran Ever Stop Its Nuclear Weapons Development?

My short answer is YES but it will all depend on a number of factors including but not limited to the intensity of those sanctions.

So far, the new sanctions are wreaking havoc on the Iranian economy, which relies on oil exports for about 8% of its public revenue. But while the economic impact of sanctions is becoming apparent, the political impacts have not yet crystallized.

One of the most pressing problems in Iran today is inflation. Inflation is not a new problem in Iran, due in part to sanctions in recent years that have resulted in disrupted supply chains and higher operating costs. But spiraling inflation is being felt by ordinary Iranians like never before.

Recently, Iran’s Central Bank reported inflation to be at 22.2 percent, although economists say this figure is grossly underestimated. In one week alone, the price of chicken rose 30% and the price of vegetable almost 100%. Prices are unstable, budgets are being stretched thinner and thinner, and people are seeing the value of their savings quickly disappear.

For More:  Would Further Economic Sanctions Against Iran Ever Stop Its Nuclear Weapons Development?

Why Financial Education?

It is a sad fact today that most people starting with students are financially illiterate.

Here are some sobering facts:

• The average score on a freshman "financial literacy exam" was 59%, according to the JumpStart Coalition.

• The average student has roughly $23,000 in student loans, $4,000 in credit card debt and four credit cards.

• An average of 7% percent of graduates default on their student loans within the first few years.

Here’s what students are begging to understand:

• 84% say they need more education on financial management, according to Sallie Mae.

• 62% say their knowledge of credit reports is either fair or poor, according to the Consumer Federation of America.

• 60% have only a vague understanding of their debt, according to TheFreeLibrary.com.

 

For More: Why Financial Education? 

Thank you,

 

Using the Levers of Power: Art or Science?

“It is much safer to be feared than loved,” writes Niccolo Machiavelli in The Prince, his classic 16th-century treatise advocating manipulation and occasional cruelty as the best means to power.

Guided by centuries of advice like Machiavelli, we tend to believe that attaining power requires force, deception, manipulation, and coercion. Indeed, we might even assume that positions of power demand this kind of conduct—that to run smoothly, society needs business or political leaders who are willing and able to use power this way.

I cannot disagree more….. In fact, I would take it one step further and say that as seductive as Machiavelli’s notion is, he is dead wrong.

I believe power is wielded today most effectively when it’s used responsibly by people who are attuned to, and engaged with the needs and interests of others. It is a fact that empathy and social intelligence are vastly more important to acquiring and exercising power than are force, deception, or terror.

For More:  Using the Levers of Power: Art or Science?

Thank You,