Ep 59Inside the Mind of a Jewish Hedge Fund Manager
If it's such a great investment, why is it coming to you?
Why is it coming to me? If it's such a great investment, it probably wouldn't come to me.
Jason Lieber
Inside the Mind of a Jewish Hedge Fund Manager
with Jason Lieber
Why is it coming to me? If it's such a great investment, it probably wouldn't come to me.
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Quotes
“We don't try to make people rich, we try to keep people rich.”
“A gold mine is a hole in the ground with a liar standing next to it. (quoting Mark Twain)”
“Anytime anyone says guaranteed 15, 20%, you could pretty much run the other way.”
“You should never invest because some rich guy in the neighborhood is investing in their deal.”
“I don't invest in people who tell me how honest they are because I believe honest people are just honest.”
“If you get rid of the two or three disaster investments, most people would do far better.”
Takeaways
- 1 Friends and family ask for investments far more than we think. The goal is knowing what questions to ask when someone brings you "the best deal you've ever heard of."
- 2 Day trading fails over 95% of the time. For most people, index funds bought monthly for 25-30 years always worked. Wedding or bar mitzvah money goes into index funds first; only extra money goes elsewhere, and he'd keep at least half in index funds.
- 3 Invest in what you understand (Peter Lynch). Ask two questions: is it a good, useful business, and what price am I paying?
- 4 Past performance matters only when it's real: an audited track record from a recognizable firm, an independent administrator holding the money, and steady results rather than wild swings. Most real estate deals can't show a full record.
- 5 Red flags: guarantees, flashy people juggling many deals, name-dropping (go ask the named investor yourself), and people who keep telling you how honest they are.
- 6 The best deals go to Blackstone, Goldman and big family offices first. What reaches us is usually lower quality - so skip the FOMO.
- 7 Friends and family deals: best avoided. If you do one, keep it small enough that you won't resent them if it fails.
- 8 Private companies: minority investors often never see money - the founder's salary rises, relatives get hired, and there's no way to sell. If you invest, get legal advice, a board seat, a real accountant, and spread money across several companies. Management matters more than the product.
- 9 Real estate: check the sponsor's own money in the deal, their reputation, and the real upside (a 96% occupied building has little). With a 5% risk-free rate, deals need to be much better.
- 10 Frauds surface in downturns. Whether to report one to the authorities is a real halachic question - protecting a fraudster can hurt the next victims. Never make an investment you'd hide from your wife, and never take a risk that knocks you out of the game.