Interesting piece in Bloomberg over the weekend interviewing various billionaires about their current investment perspective.  I thought the most interesting question was the best piece of investing advice they ever received.  It’s a diverse group with some thought provoking insights.  The whole piece is a fun read just for a change of pace.  The advice follows:

Mikhail Prokhorov, Russian billionaire entrepreneur: “Keep your back straight and don’t fidget” — a piece of Russian folk wisdom.

Donald Trump, real estate mogul: “My father, Fred C. Trump, told me to know everything you can about what you’re doing. He believed in being thorough and was wary of blind spots.”

Eli Broad,  American businessman: “Don’t bet the farm.”

Patrick Soon-Shiong, South African-American surgeon who was founder, chairman, and CEO of Abraxis BioScience: “Invest in yourself and the people you believe in.”

John Paul DeJoria, billionaire businessman: “How to buy a put, told to me by a woman named Rebecca.”

Joe Jamail, Lebanese American attorney and billionaire: “My dad told me, “Don’t buy any g—— stocks, OK?” He had a chain of grocery stores. He liked that cash coming in.”

Randal J. Kirk, founder, chairman and chief executive of New River Pharmaceutical: “Good deals are like bus stops; there is one on every corner.” Told to me by Red Robertson of Grundy, Virginia, who invested in my first deal. The advice illustrated he was not so interested in the deal as in my dedication to it. One invests in the guy behind the deal, above all else.

Rubens Menin Teixeira de Souza, Chairman & CEO of MRV Engenharia: “Buying Brazilian C bonds when they were trading at 40 cents on the dollar. The securities, issued in the 1990s, traded at par in 2005 when the government bought back the last of them.”

Source: Bloomberg



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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  1. Was there not a post regarding Warren Mosler’s recent thoughts about his DC trip here at TPC? In the original post, it seemed as if you took a little less bearish view. Is your position changing upon further reflection?

  2. Has anyone done any analysis on the effect of the negative interest rates on excess reserves in Sweden? Given the fact that in macroeconomics terms Sweden is outperforming pretty much every country in the last two years, can some of this outperformance be attributed to the negative int. Rates? Also it seems that these negative rates have had absolutely no effect on inflation as well. As far as I understand Sweden-is the first and only country at the moment to have introduced negative interest rates on excess reserves so if anyone can point to any good research on this would be much appreciated.

  3. Buffet, paraphrased and interpreted: buy stuff worth a dollar for less than a dollar; cultivate down home image; insert proboscis into all money-like objects.

  4. Anton,

    Negative interest rates are a tax on banks, pure and simple. They decrease the aggregate demand and have no impact on lending. Upon making a loan the reserves on the bank’s balance sheet don’t decrease by one cent – so banks cannot get rid of the hot potato by lending, such belief that underpins the negative interest rate idea is based on faulty understanding of how banking works.

    So Sweden works *despite* negative interest on reserves, not thanks to it. Look at sectoral balances – the cash to Sweden’s private sector flows either from the govt (big deficits) or from abroad, at the cost of sending stuff outside Sweden (big exports).

  5. Ron T: thank you for your answer. My question was not regarding really the theoretical aspect of negative interest rates from a MMT perspective (on which I completely agree as per your description as well), but more on some proper empirical evidence of them. For example, did excess reserves decrease? Did consumer or corporate lending increase? I just thought because Sweden is such a unique case it would have been interesting to actually see in practice how all this works. And if you can “prove” with some proper data the theoretical aspect of negative nominal interest rates it would do MMT very good and make it more legitimate.

  6. number 1 piece of advice these guys follow: be willing to lose other people’s money

  7. I’m surprised none of these billionaires said “buy low, sell high”. Surely that is the best investment advice ever given.

  8. Anton,

    Say lending increased and excess reserves decreased. Would it prove that negative interest is a good policy?

    Absolutely not.

    As I said: there is zero mechanism from reserves to lending. Excess reserves decrease if the central bank accepts them back, not via lending (it is not a theory but an operational fact: reserves cannot be transferred outside Fed accounts – and only banks have those not firms – so a bank cannot give them to a firm even if they both wanted that to happen). And lending increases if firms see more demand and banks agree and give them loans. Reserves do not cause lending.

    Not about Sweden, but the US: empirics of reserves and lending: reserves do not cause lending, so fiddling with them changes nothing.

  9. Investment advice vs trading advise. They sometimes get bundled together. As for the markets Mon. AM… it sure feels good to be optimistic. It’s just the cool thing to do. So, hook a ride, but don’t be afraid to take a profit.