Continuing with my new protocol, here I’m going to share content I consumed and learned from. This week, I spent time doing general learning about a variety of topics.

What I consumed this week and what I learned from it:

• Focusing downside lets you play offense in down markets – YouTube interview with Seth Klarman, CEO of Baupost Group. Klarman joined Baupost at the age of 25 when it was being formed. He owned no equity, but seven years later, he was CEO and owned 40% of the firm. Klarman believes that focusing on risk and a bottom-up approach puts you in a position to be aggressive and play offense when others are panicking. In about three months, he raised roughly $4 billion as the great financial crisis hit, and his firm was a big buyer, deploying $100 million per day across various asset classes!
• The next generation of market wizards – YouTube interview with Jack D. Schwager, author of the Market Wizards series of books. I love learning about the strategies of people who’ve achieved outsized success, so I’ve enjoyed Schwager’s books because that’s what they’re about. He just released a new book, which I bought, that explains how some people, mostly working from their homes, generated astronomical sums over roughly a decade. For example, one person went from around $50,000 to over $500 million in about a dozen years working from home. Schwager won’t write about someone until he verifies their results through account statements and tax returns, which adds lots of credibility to his books. One of the interesting things I picked up on in this latest book was the power of compounding. Key to the success of these people is sticking with their winners long enough to enjoy compounding while cutting losers so the losses don’t impact their overall compounding. This is a common theme I’ve seen before that leads to power-law results for venture capital and other famous public market investors.
• She has to spend +$200k/month – YouTube interview with Anne Mahlum, an entrepreneur who sold her business to private equity. This interview was interesting because she’s transparent about her $100+ million net worth and how it’s invested. She has to remind herself to spend enough money some months, and in some months spends $400,000 without impacting her overall wealth at all. Her experiences with family members made sense. Gifting her husband a substantial amount of money before they got married to avoid fights about money was unconventional but has worked well for her.

That’s what I learned from what I consumed last week.