Especially on carpet.
First time I ever opened an envelope of loose diamonds, one fell onto the carpet and was "lost".
Small loose diamonds are very hard to find especially on carpet.
After a lot of searching, on my hands and knees, it still could not be found.
What I learned later: the trick is to vacuum the carpet and go through the vacuum bag.
If only I knew how then, oh well, live and learn
Thursday, August 28, 2008
Friday, August 22, 2008
Why invest in shorts?
You can find a more detailed but still very simple explanation here, but really basic initial reasons are:
1) It is a good way to make money
2) It is a good way to hedge your longs, similar to "hedging your bets". If you have some long and some short you make it possible to make sure you make money either way the stock goes.
Both have their risks but if you do your research you can have both shorts and longs and end up with more money in the end.
1) It is a good way to make money
2) It is a good way to hedge your longs, similar to "hedging your bets". If you have some long and some short you make it possible to make sure you make money either way the stock goes.
Both have their risks but if you do your research you can have both shorts and longs and end up with more money in the end.
Wednesday, August 20, 2008
How I became a short seller
I had a very interesting route to becoming a short seller.
I have never followed tradition: from not finishing high school to playing professional poker in order to supplement my income when I first started in the market.
For example, shooting pool was a big part of my high school life. While other 16-year-old kids were out drinking and messing around, I was using a different approach. I wanted to make money. This was in the ‘60’s and playing pool for 5 or 10 dollars a game wasn’t going to lead to riches. But I did learn that being a student wasn’t really something I was cut out for.
After leaving high school, I lived in Israel for 18 months on a kibbutz. I was just 17 when I left. The kibbutz had apple and orange orchards and also turkeys. I worked in the turkey area and most days started at 5 a.m. and finished at 5 p.m. All of the people I worked with there put in long hours. It always felt good to work and this was where I learned the value of hard work and putting your time in on a project. I followed this with a trip around Europe staying in youth hostels, camping out and meeting people. I still have a friend or two that I met on that trip.
Upon returning to the States, I tried going to junior college, but again higher education wasn’t for me. I ended up working in a gum factory for $2.50 an hour. I lasted about 9 months and haven’t had a real job since.
For the next few years I tried selling various things including gold and diamond jewelry. In 1978 I met a diamond and estate dealer who put me in business in the diamond and estate jewelry trade. He is still a dear friend and one of many who gave me a good starting chance in life.
In order to supplement my income from the diamonds, I started playing poker. I started in a relatively small game playing for 100 to 200 dollars. By 1980 I had graduated to a very large game for its day. The game I played in then took $3000 to get into. It was a no limit game, so every hand all your chips were at risk. Even today it could be considered a BIG game and in 1980 it really was. Often times there was $50,000 to $100,000 on the table.
Learning about value started with diamonds, learning about people started with judging poker players. You can also learn value from understanding the value of cards in your hand. Do they have it or don’t they, can you call someone with all of your chips if that will put you out of the game?
Then there was the worry of whether you could pay the rent or feed your family. There really was only one option, which was not necessarily to win, but to survive. Basic economics applied to poker. If you didn’t have any money left, you couldn’t play. It was exhilarating and quite fun.
During that time, I made my first investment in the stock market. It was 1978. And I made my first short sale, an oil company, in 1981.
I continued playing poker until about 1984 when our business was growing so fast that I just didn’t have any time. It has been interesting to see the popularity of poker and tournament play grow over the last years. I rarely play anymore, although I enjoy watching some of the tournaments on T.V.
In 1980 I left the diamond business and started doing financial public relations for small oil and gas companies. At that time I met one of my early mentors who taught me how to read balance sheets and income statements. He showed me over and over again how to do valuations and how to understand business and their economics.
During that period oil and gas were all the rage and learning asset values was part of my training. It was simple back then: reserves plus acreage minus the debt gave you the value. It was amazing how many came up at zero.
I started managing money for a few friends in 1981 and then founded Feshbach Brothers along with my brother Matt in 1982; Falcon Research was started in 1984. The bull market of ‘91 made it particularly hard to be 100% short and we lost a few too many investors to keep going. My brothers and I trained 2 dozen short side analysts, many who are still active and successful today.
I have shorted hundreds of stocks over the years; many are no longer around. My scope has included energy, entertainment, financials, retail, restaurants, fads, frauds, dumb ideas, uneconomic ideas and companies who have missed the mark entirely.
No one I worked with in the early ‘80’s dismissed me because I hadn’t finished high school, hadn’t gone to college or business school. I was extremely lucky to have had people who taught me skills that have been useful for the past 28 years.
I was also guided by these same investors to do investigatory research and to dig into companies’ businesses. Learning about businesses from the outside instead of the companies themselves keeps you balanced. Doing the research and finding the key elements to a story is fun for me.
And finding a good short is one of those things that still gets my heart rate up.
I have never followed tradition: from not finishing high school to playing professional poker in order to supplement my income when I first started in the market.
For example, shooting pool was a big part of my high school life. While other 16-year-old kids were out drinking and messing around, I was using a different approach. I wanted to make money. This was in the ‘60’s and playing pool for 5 or 10 dollars a game wasn’t going to lead to riches. But I did learn that being a student wasn’t really something I was cut out for.
After leaving high school, I lived in Israel for 18 months on a kibbutz. I was just 17 when I left. The kibbutz had apple and orange orchards and also turkeys. I worked in the turkey area and most days started at 5 a.m. and finished at 5 p.m. All of the people I worked with there put in long hours. It always felt good to work and this was where I learned the value of hard work and putting your time in on a project. I followed this with a trip around Europe staying in youth hostels, camping out and meeting people. I still have a friend or two that I met on that trip.
Upon returning to the States, I tried going to junior college, but again higher education wasn’t for me. I ended up working in a gum factory for $2.50 an hour. I lasted about 9 months and haven’t had a real job since.
For the next few years I tried selling various things including gold and diamond jewelry. In 1978 I met a diamond and estate dealer who put me in business in the diamond and estate jewelry trade. He is still a dear friend and one of many who gave me a good starting chance in life.
In order to supplement my income from the diamonds, I started playing poker. I started in a relatively small game playing for 100 to 200 dollars. By 1980 I had graduated to a very large game for its day. The game I played in then took $3000 to get into. It was a no limit game, so every hand all your chips were at risk. Even today it could be considered a BIG game and in 1980 it really was. Often times there was $50,000 to $100,000 on the table.
Learning about value started with diamonds, learning about people started with judging poker players. You can also learn value from understanding the value of cards in your hand. Do they have it or don’t they, can you call someone with all of your chips if that will put you out of the game?
Then there was the worry of whether you could pay the rent or feed your family. There really was only one option, which was not necessarily to win, but to survive. Basic economics applied to poker. If you didn’t have any money left, you couldn’t play. It was exhilarating and quite fun.
During that time, I made my first investment in the stock market. It was 1978. And I made my first short sale, an oil company, in 1981.
I continued playing poker until about 1984 when our business was growing so fast that I just didn’t have any time. It has been interesting to see the popularity of poker and tournament play grow over the last years. I rarely play anymore, although I enjoy watching some of the tournaments on T.V.
In 1980 I left the diamond business and started doing financial public relations for small oil and gas companies. At that time I met one of my early mentors who taught me how to read balance sheets and income statements. He showed me over and over again how to do valuations and how to understand business and their economics.
During that period oil and gas were all the rage and learning asset values was part of my training. It was simple back then: reserves plus acreage minus the debt gave you the value. It was amazing how many came up at zero.
I started managing money for a few friends in 1981 and then founded Feshbach Brothers along with my brother Matt in 1982; Falcon Research was started in 1984. The bull market of ‘91 made it particularly hard to be 100% short and we lost a few too many investors to keep going. My brothers and I trained 2 dozen short side analysts, many who are still active and successful today.
I have shorted hundreds of stocks over the years; many are no longer around. My scope has included energy, entertainment, financials, retail, restaurants, fads, frauds, dumb ideas, uneconomic ideas and companies who have missed the mark entirely.
No one I worked with in the early ‘80’s dismissed me because I hadn’t finished high school, hadn’t gone to college or business school. I was extremely lucky to have had people who taught me skills that have been useful for the past 28 years.
I was also guided by these same investors to do investigatory research and to dig into companies’ businesses. Learning about businesses from the outside instead of the companies themselves keeps you balanced. Doing the research and finding the key elements to a story is fun for me.
And finding a good short is one of those things that still gets my heart rate up.
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