Valuewalk's ValueTalks

Hello Listeners, Today is a very special episode with Nassim Nicholas Taleb, author of the INCERTO. The INCERTO is a multivolume essay that includes The Black Swan, Fooled by Randomness, Anitfragile and most recently Skin in the Game. He spent 21 years as a quantitative trader and risk taker. Today is a very short episode about his most recent book, “Skin in the Game”. Below is an excerpt from our conversation. Raul: What is the main premise of the book? Nassim: You cannot look at my books anymore as body parts because they are a continuation of a project called Incerto and that would be volume 5 of the Incerto. A lot of people know Black Swan, Antifragile, and some like Fooled by Randomness. So its part of a project, the idea, and Antifragile is about the symmetry and there was some mental asymmetry at the end of Antifragile. The symmetry means someone has an option, I make money if I am right and lose very little if I am wrong, so volatility would benefit me. And of course, some people abuse that option by inflicting losses onto others, transferring losses unto others. So you make the upside and you transfer the downside unto others. So I thought about it at length and it hits me that there is something beyond the unfairness of the asymmetry. So let me present the idea of skin in the game in general. Skin in the game for a lot of economists is seen as incentives. So if you are incentivized you work harder. That is level one. That is not it. There has to be level 2 which actually presides this notion of incentives. The Hammurabi’s Law, if you cause harm to others, you ought to be penalized and compensate your victims. That is the idea. In others words I shall not hide risk. There is the story of the architect who built a house and of course can cut corners with something weak in the foundation and you immediately make your money. One day the house collapses. Well in the Hammurabi’s Law finds the architect punished. Of course there is various punishment depends on who is injured. So that level two means there is disincentive in the idea of skin in the game. But that is not enough…” Enjoy and thanks for the listen!

Good Morning Listeners, Today is a very special episode with Whitney Tilson. We talk about the early days of running a hedge fund with no prior experience, why he shut down Kase Capital, and why he launched Kase Learning. Whitney is a graduate of Harvard College and Harvard Business School. He previously managed T2 Partners and Kase Capital. Whitney also coauthored several books such as “The Art of Value Investing: How the World's Best Investors Beat the Market” and “More Mortgage Meltdown: 6 Ways to Profit in These Bad Times”, “Poor Charlie's Almanack”. If you would like to attend any of the boot camps, we have a special discount code for Valuewalk readers! Please use Code: VW10 to receive 10% off and follow the link: www.kaselearing.com Below is an excerpt about how Whitney started his fund. “It was back in late 1998, late 90s in general, for the first time in my life, I had 10,000 bucks in my bank account. Necessity being the mother of invention, I wanted to know what to do with it. This was a few years after I graduated Harvard Business School, my wife was working in the city as a lawyer and we finally paid off all my debts and had a little bit of money in the bank. I remember calling Bill Ackman, who was a friend of mine from college, and asked him about investing. He said read all of Warren Buffet’s letters and that is everything you need to know. So I did and keep in mind the 90s was a decade long in a very long bull market and was a great time to be in stocks. Every stock I picked one up and said this is great, I am God’s gift to investing. In hindsight I was more of a bull market genius. It is sort of ironic because I see a lot of them today, 9 years into this bull market. After a couple of years making a lot of money, I remember the biggest winner was AOL back in the early days and made 6 times my money in that one year. That really convinced me that I was God’s gift to investing. In late 1998, the idea just struck me that I should follow in my friend, Bill Ackman’s footsteps, and start my own hedge fund. He at that point was managing his original fund, Gotham Partners and Bill and his partner, David Berkowitz, had grown from 3 million to maybe 500 million under management and were doing incredibly well. That was an inspiration for me as well. So I decided to hang out my shingle as the world’s smallest hedge fund about 6 weeks later. So 6 weeks after I decided to start my own fund, I had opened my doors. I had 3 investors and 1.1 million dollars under management of my own money, my parents, and my in-laws and that is how I started almost 20 years ago.“ 1:14 – What led you down the hedge fund industry and why did you start your own fund? 3:29 – What were the early days like when you were launching your hedge fund? 10:49 – Did you have any mentors to learn business from in the early days? 12:01 – What lessons did you learn running your own hedge fund? 20:45 – How should you balance your time early on in your career and where should you spend it? 22:54 – What did you enjoy most about running your own fund? 24:27 – You recently closed down your fund, can you tell me what happened? 38:41 – What led to creating Kase Learning? 48:12 – Can you talk about the life lesson aspect of the boot camp? 54:08 – Can you tell me more about your experience with sleep deprivation and rebirth of ideas? 58:18 – If you were to go back in time when you first started your hedge fund, what would you have done differently with what you know now? 1:00:58 – Can you tell me more about the short selling conference and is this a good time to be short selling? 1:06:17 – What are your favorite books? 1:10:56 – What are your hobbies? Enjoy and thanks for the listen!

Hello Listeners, Today is a very special episode. I have Julie Nash Phd and Gabriel Thoumi. Both go over the Engage the Chain Case Studies. This is an excellent episode on the key points and key takeaways from these case studies. 2:29 – How did you get started in this industry and what captured your interest? 8:08 – Why did you choose this profession and what do you enjoy most about it? 11:38 – How do you define supply chain agricultural risk? 15:15 – You wrote 4 case studies, can you quickly go over all 4 of them? What were your findings? And which case studies have resonated most with investors? 26:46 – What can investors learn from these case studies? How can they incorporate in their models and investment process? 33:45 – What are the key takeaways from these case studies? 42:49 – Who are your mentors? 46:40 – What are your hobbies and what do you do outside of work? 48:57 – Closing thoughts Enjoy and thanks for the listen!

Hello Listeners, Today is a very special episode with John Reese, the founder and CEO of Validea.com. He has created a way to allow anyone to have access to the guru strategies based on some of the most successful investors of all time such as Warren Buffet, Peter Lynch, etc. In this episode, he discusses how the gurus were selected and what inspired him to create Validea.com. 1:16 – How did you get started in the finance and investment profession? What caught your interest? 7:26 – Do you have a favorite investor from the selection of gurus? Is there a particular approach from any of them that you like? 10:26 – Are there any strategies that surprised you? Are there any strategies that did well or did not as good as you initially thought? 12:38 – How would you describe your personal investment philosophy? 13:59 – With the Validea portfolio, it is pretty concentrated with 10-20 stocks, can you describe why is that? 16:43 – What are your views on portfolio concentration and diversification? 17:16 – What is your view on the value premium? 18:38 – What are your views on the small cap premium? 21:32 – What are your views on the momentum premium? 24:19 – With these factors, are there any attractive and when they would be the most effectively applied? 26:00 – How would you define mean reversion? 30:44 – Can you tell me about the guru ETF? 32:22 – Can you tell me about the Validea Legends? What was your objective and how is it accomplished? 38:25 – How do you define and measure risk? 40:44 – What are your favorite books? 41:25 – What are your hobbies? 42:24 – For angel investing, do you follow a particular philosophy or strategy? Enjoy and thanks for the listen!

Hello Listeners, Today is a very special episode. I have Eric Weiss the founder and chief investment officer of Blockchain Investment Group. This episode is packed with great nuggets. One takeaway I loved is “It is a lot easier to write a logical, thoughtful, intelligent white paper than it is to execute and build what it is you have just articulated even if you raised the capital”. 1:27 – How did you get started in finance and investments? 2:08 – What were your previous positions? 3:19 – What led you to blockchain and bitcoin? 4:23 – What is your investment philosophy and investment strategy that you follow? 11:59 –How do you go about selecting the managers and how do you know which strategies will perform the best? 15:13 – What are your thoughts and views on cryptocurrencies? 17:21 – What are your views on diversification and portfolio concentration? 24:52 – What excites you about this space? 27:18 – How do you manage the amount of new information in this space and how do you vet your informational sources? 34:42 – How would you define risk and is it defined differently in the crypto space? 42:53 – Can you briefly talk about that issue of scalability? 43:45 – What trends do you see in crytpocurrencies and what do you expect from this space? 49:36 – What are the most interesting ideas that you have found in this space? 52:27 – What are your favorite books? 54:18 – Where can people find more information on you and your work? Enjoy and thanks for the listen!

Hello Listeners, Today is a very special episode. I have both Daniel Bresler and Anthony Jew, members of Seward and Kissel's Blockchain and Crytpocurrency group, and we will be discussing about the various issues surrounding bitcoin futures. 1:31 – How did you guys get started in this field? What interested you in pursuing cryptocurrencies? 2:53 – What are bitcoin futures? How are they different from other futures? 5:19 – Are bitcoins commodities? 5:34 – Is there a need for bitcoin custodians? 6:44 – How is the CFTC regulating the bitcoin futures? 7:43 – What are the limits to the CFTC’s enforcement on bitcoin futures? 9:03 – Can you describe the valuation methodologies of the CME and CBOE bitcoin futures and how they differ? 12:45 – How do they affect different types of investors? 17:19 – What should institutional and retail investors be aware of? 19:14 – What are the potential headwinds for regulations of bitcoin futures? 20:17 – What are your favorite books? 21:32 – Are there any papers or online articles that you found useful understanding of blockchain that you would recommend? Enjoy and thanks for the listen!

Hello Listeners, Today is a very special episode with Kip Meadows. We discuss various topics about ETFs and more. 1:24 – How did you get started and why did you choose this industry and profession? 2:10 – What drew you to the industry? 2:47 – What is your role specifically and what is a typical day like? 4:57 – What is the white label ETF space? 6:57 – Why did you want to get involved with the ETFs? 7:58 – What opportunities lie ahead and what challenges do they face? 10:03 – What trends do you see in the ETF industry? 12:16 – What do you look for when you help launch an ETF? 15:23 – If someone has an idea for an active ETF, how best should they prepare? 17:23 – What is your investment philosophy and strategy? 20:20 – How do you define risk and manage it? 22:03 – What are your favorite books? 23:51 – What are your hobbies and what do you like to do in your spare time? Enjoy and thanks for listen!

Hello Listeners, Today is a very special episode. I have Kevin Quigg who is the chief strategist at ACSI funds and Exponential ETFs. Today we cover a wide variety of topics in the ETF industry. What I learned: - It is easy to become complacent during times of conventional wisdom - It is more than alpha, you should strive to help investors meet their goals - Customer satisfaction and the utilization to see which companies will outperform 1:20 – How did you get started in this career and what inspired you to pursue it? 2:46 – What drove you towards the ETF space? 5:32 – How do you educate investors now? 7:19 – How do you describe the customer satisfaction? 13:18 – Can you go more into the history 18:59 – How do you know if you are capturing trend versus phenomena? 26:39 – What is your investment philosophy? 30:32 – What are your favorite books? 32:20 – What are your hobbies outside of work? Enjoy and thanks for the listen!

Hello Listeners, Today is very cool episode with the founder of Granite Shares, Will Rhind. One insight I drew from this conversation is the to humanize the process and if you want to start a company, just go for it. 00:57 – What inspired you to be an investor? 1:33 – What did you do before Granite shares? 3:47 – What is your investing philosophy and strategy? 6:37 – How do you define and manage risk? 8:08 – What gap in the ETF market does Granite Shares address? 10:05 – How do you challenge yourself as an investor? 11:29 – How do you plan on reaching the legacy stage at a more efficient structure? 12:54 – How would you describe your brand? 15:20 – How do you go about educating clients and potential clients? 16:22 – “Investing is as exciting as it once was”, can you explain that? 17:57 – You recently launched a gold etf with really low fees, how do you stay competitive? 18:51 – For gold, what is your advice to investors? 20:25 – What were you biggest challenges when you launched your ETF? 22:58 –What is your advice for people who want to pursue ETF? 24:19 – Did you have any mentors along the way? 27:10 – Where else do you draw inspiration for your business such as books? 29:27 – Where do you see the ETF industry heading in the next 5,10 years? 31:07 –How would you explain an ETF to someone new to it? 31:59 – What are your favorite books? Enjoy and thank you for the listen!

Hello Listeners, Today is a very special episode. I have Don Steinbrugge and we will be discussing his recent report on industry trends with hedge funds. This is a great listen if you want to know more about what it takes to build a successful hedge fund and factors to consider. 1:25 – How did you get started in this profession and why did you choose hedge funds? 6:15 – What do you enjoy most about your work? 13:43 – Do you notice any commonalities that the good hedge funds do even though they have different strategies? 15:27 – You recently came out with a forecast, can you tell me about it and how you came up with it? 21:28 – Can you tell me about the out of favor hedge fund strategies heading into 2018 and why they are losing their luster? 30:53 – Do you find any of those strategies hard to market to institutional investors? 32:43 – Can you tell me about the arms race for alpha and how data scientist are becoming increasingly important? 36:09 – How are pension funds using hedge funds and can you tell me about the endowment model and how the use of hedge funds has evolved? 39:41 – Can you tell me about the growth in hedge fund distribution and what is leading to this new trend? 44:29 – Can you tell me about the rise of crypto hedge funds and the challenges they face in terms of operations and marketing? 54:21 – What are your favorite books? 1:00:30 – Do you have any advice for upcoming hedge fund managers or anyone wanting to pursue this profession? Enjoy and thank you for the listen!

Hello Listeners, Today is very special episode. I have Tobias Carlisle talk about all aspects of investing and his recent book the Acquirer's Multiple. 1:17 Tell what led you down the investment path and what interested you the most? 3:35 What do you enjoy most about what you do? 5:37 What is your investment philosophy and investment strategy? 9:13 What would you say is the underlying principles of your strategy? 11:09 How did you develop it and come about it? 17:11 What are value traps? 18:45 How does the acquirer’s multiple differ from the PE and other multiples? 21:31 What is the margin of safety and how should it be applied? 22:39 What is mean reversion? 27:18 Can you go over the 9 rules of deep value? 30:53 What are your views on portfolio diversification and concentration? 36:27 How do you define and manage risk? 37:34 What are your favorite books? 39:16 What are your favorite finance articles? 40:00 What are your favorite hobbies? 40:37 Where can people find more information on you? 42:10 Thoughts on bitcoin and crypto? There is also a giveaway: https://giveaway.amazon.com/p/4a9bba47573fecd4 Thank you for the listen and enjoy!

Hello Listeners, Today is a very special episode with William Smead. He is the CEO and CIO of Smead Capital Management. This episode is filled with great nuggets on the approach of investing and what he looks for in investments. We also discuss his recent newsletter, "Confusing Brains with a Bull Market". ​1:41 How did you get started in the investment profession and why did you choose this career path? 2:39 What interested you the most about this profession? 3:35 If you were going to do this today, would you still do it? 22:10 Can you quickly go over your report, “Confusing Brains with Bull Markets”? 38:03 What do you expect coming 2018? 41:18 How do you define and manage risk? 51:47 Quickly, what are your thoughts on cryptocurrency and bitcoin? 53:27 What are your favorite books? 54:03 Where can people find more information on you and your writing? Enjoy and thanks for the listen!

Hello Listeners, Welcome to another very special episode with William J Bernstein. He is an incredible guest and financial thought leader. We cover a wide range of topics in this episode. 1:45 Can you describe your 1972 doctoral thesis? 3:55 Can you describe that process of working on your phd and the lessons you learned pursing that? 6:29 What lessons did you learn in information gathering? 11:04 Just want to ask you about your advisor, professor Melvin calvin, how important was he to you? 17:24 What led you to finance and investing? 22:00 What are your views on the value premium? 26:26 What are your views on the small cap premium? 28:43 What are your views on bitcoin? 34:14 What is your advice for new investors? 37:42 What is the best way to vet the right informational sources? 45:25 How do you go about finding the relevant information when you write a book? 53:43 What are your favorite books and books you are currently reading now? 56:25 What are your recommended finance journal articles? Thank you for the listen and please enjoy!

Hello Listeners, Welcome to another very special live episode with Mitchell Goldberg. We had a great conversation covering various topics. One of the key takeaways from this conversation was when Mitchell said, "Can we currently live without blockchain technology and still survive?" There a few great nuggets scattered throughout our conversation. 1:42 How did you get started in this profession and why this field? 2:49 What attracted to you about it? 7:17 What about robo advisers? 10:46 What investing philosophy do you adhere to? What strategies do you follow? 14:53 How do you go about selecting for the portfolio? 20:32 What are you thoughts on bitcoin? 26:39 Any advice on how to keep you temperament and emotions in check while investing in bitcoin? 33:23 What are your views on the passive vs active? 40:09 What are your favorite books? 43:46 What are your hobbies? 45:45 Where can people find more information on you? Enjoy and thanks for the listen!

Hello Listeners, I was live with Nolan Bauerle from Coindesk. We discuss the basics of bitocoin, blockchain, and the nature of the evolving industry. 1:29 How did you get started in blockchain and cryptocurrencies? What inspired you? 3:26 What is blockchain and what are cryptocurrencies? 5:05 What is the blockchain? 8:05 What is the difference between bitcoin, Ethereum and all the others popping up? 9:43 What are smart contracts? 9:58 What are initial coin offerings? 13:20 What gives the cryptocurrencies value? 17:17 From the investor’s perspective, how should they approach investing in cryptocurrencies? 24:34 How can blockchain be applied to other industries? 28:23 What are the common misconceptions? 31:35 What is the investor’s beginning guide to get into this space? 35:01 What are the trends and future for cryptocurrencies? 41:40 What is coindesk and what do you guys do? 52:33 What are your favorite books? 53:43 Do you have any mentors in this space? 56:15 Where can we find more information on you? Enjoy and thanks for the listen!