Two Books That Turned A Goat Farmer Into The Best Investor In History
Founder, Owner, and CIO of a Hedge Fund with a 70% return per year
⚠️WARNING⚠️ Before presenting two life-changing books, we want to ask all our paid subscribers to be very attentive to the mail on Friday-Saturday as they will receive a surprise.
At just 16 years old, Mark had the opportunity to learn from one of the best Corn and Soybean traders of all time, Everet Klipp. From him, he acquired his interest in raw materials, livestock, and, above all, finance.
This way of understanding finance is what has made him the best investor of all time.
“The market is a completely subjective thing, it can do anything. And it is always right, yet always wrong!” — Everet Klipp
At the age of 22 after graduating from New York University with a degree in mathematics, Mark joined the Chicago Board of Trade as a pit trader, where he had the opportunity to work for the king of the bond pit, Lucian Thomas Baldwin III (“BAL”).
What surprised him most about this trader was his disciplined control in alternating between tremendous patience and overwhelming aggression.
“The question of profit size was, of course, not about trade size, which was a simple function of account size, and which, of course, would impact both losses and gains proportionately. This was about the size of the profits relative to the size of losses, the payoff.”
Two books have been the ones that Mark has publicly acknowledged made him the investor he is today:
“Economics in One Lesson” by Henry Hazlitt
Although it is quite old, it is surprising to see that today exactly the same mistakes are being made that the author referred to years ago.
“Everything we get, outside of the free gifts of nature, must in some way be paid for.”
However, the key lesson is that economic policies are often designed for the most immediately affected group, but ignore the long-term secondary and tertiary effects for everyone else.
Central Banks (ECB and FED) have lamented the amount printed before the great recession of 2008. However, they have continued to print in unprecedented quantities. In fact, fiscal support after Covid-19 has caused US GDP to grow for CY21 about 6%.
They are creating an unreal economy full of money but generating very little wealth in society. Quite the opposite, with resource scarcity and inflation.
“The larger the percentage of the national income taken by taxes the greater the deterrent to private production and employment. When the total tax burden grows beyond a bearable size, the problem of devising taxes that will not discourage and disrupt production becomes insoluble.”
Every task in the world should be done by the person/country/company that can do that task most efficiently in terms of least capital, resources, and personnel and not for free.
These mistakes are paid dearly in a timely manner by the markets and that is precisely what Mark is dedicated to finding.
He has benefited from market asymmetries, for example during the month of March 2020 he achieved a return of 4,400%.
“Human Action” by Ludwig Von Mises
Spitznagel has defined himself as a faithful follower of the Austrian school of economics. One of its first thinkers, Von Mises, leaves us this work dating from 1949.
“He who only wishes and hopes do not interfere actively with the course of events and with the shaping of his own destiny.”
It introduces a systematic method of analysis in sociology that demonstrates that capitalism is humanism applied in practice. It also provides the most devastating destruction of socialist ideas and clearly presents the tragic consequences of their application in society. Whether at the national or international level, the application of socialism always leads to the same result: the liquidation of human beings.
One of the main questions that this book answers is why 1% of the wealth belongs to 99% of the population and why there are a number of countries that are poor and others that are rich.
A harsh social criticism that certainly does not leave you indifferent, and certainly opens the reader’s mind.
“Religious wars are the most terrible wars because they are waged without any prospect of conciliation.”
This is a truly comprehensive analysis of the fundamentals of the free market and the errors of interventionism. Mises touches on many of the same points he discussed in The Theory of Money and Credit.
The objective of our portfolio is to benefit from stock market crashes that are repeated over and over again throughout history. We have blind faith that in 1 month or 3 years this crash will come and we will benefit tremendously from having cash to buy cheap when no one else has. If you want to know the distribution of the portfolio in more detail:
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