In the early nineties, I was offered a job at Société Générale, a French bank called SocGen. The job was in trading in New York. I was looking for work and was doing temp work at the bank. I got the work through a recruiter. She gave me a huge break and I’m always grateful. At the time I was trying to get into investment banking, and she introduced me to all these short projects. This project was about reporting and accounting. I took the job and made a good impression, the treasurer offered me a position in the trading room. I should have taken it, it was fantastic and it was at that time the beginning of the quants; working on swaps and other interesting derivatives.
My issue was that I was talking to a junior trader who was the youngest among them. These guys were all VPs and Senior VPs. They would make about 16 thousand to 30 thousand in profits every day. These were highfliers and I was just this young, freshly out of school but a little ambitious. I was just doing the reports and maybe I felt out of place. I made friends with the young trader and he was telling me that technology was going to take over and his job would be gone. He made money, but would change.
At the same time, I was fascinated with Warren Buffett, Benjamin Graham, and Peter Lynch. I spent all my time trying to understand what these people were working on. I went to the library and read everything I could find. I lost a lot of weight, I didn’t talk to many friends. I had one friend, my best friend at the time, who was living in New York and I was his flatmate. It didn’t end well because I was antisocial. I was so into investing that I spent all my time reading. I even got a hold of what Warren Buffett was reading. I was obsessed.
When I got accepted to Westminster College in Salt Lake City, I took the opportunity and went. But looking back, the money was in that job, the one I didn’t accept, in that trading room. Years later, I would hear about the rise of the quants. Then in 2008, when Lehman Brothers collapsed, I learned one trader was making around 140 million. That was not the norm, even now.
So why am I telling you this? Even after the facts made clear the path I could have taken, if I’m honest with myself, I know I’m happy with the way things have worked out. I kinda wish other things in my life would have been different, but not in my career choice.
One of the intriguing things about Warren Buffett, he was first and foremost a business person. Not many people know this, but I had read a book on him. I had read so many books on him. He didn’t believe in “heads you win, tails the company loses” and so he tied the compensation to the CEO’s as partners instead of letting them gamble with the company’s money and resources. They were incentivised to be a team player.
A lot of times the CEO’s would send whatever money they weren’t using to Berkshire Hathaway, and Buffett would invest it. He started out operating an arcade machine. He delivered the newspapers. He went to New York to study under Benjamin Graham, then worked for him after. Buffett then started his own fund, brought Bershire Hathaway and struggled for a while trying to turn it around, unsuccesfully.
I have to say, it was Buffett’s struggle with Bershire Hathaway that ultimately definds his investment style. What I believed made him great was that he had an understanding of how the business works and how to reduce the investment noise so that he has time to think.
In contrast, I’m not comparing myself the Buffett, but, even though I studied finance and I finished grad school with a MBA in accounting, I didn’t understand what a business is and how it makes money. I understood the concept, but it wasn’t ingrained in me.
I had been invested for a few years, studied for more than 10 years before I ever started investing. In 2014, I decided to, because I had made a lot of money investing, I decided to stop. Thinking back, I should have stayed with investing. For me, investing was my fall back. I believed that we are all here for a reason, and we all have our own gifts. For me it was and is investing. I loved it. I kept it to myself, not too many people around me knew.
For the last eight years, I have been helping my wife with her business in crypto industry. We were a market maker. Blockchain was and still is a very interesting technology. I got to play and understand the nuances of how crypto transactions work on a very micro level. I know many people believe the digital revolution has changed everything and I agree. If you put together the smallest component of the bitcoin buy and sell transaction, you can create a revolution in finance. We liked to believe that we were trying to work for an inclusive society where the unbanked and underbanked were participants.
I liked the technology, what I didn’t like that people were speculating in and being used by scammers. Even though our transaction volume was mostly from reoccurring customers. I think a lot of them, our customers were well to do because of us. I like to think that. That was the good that came out from our work. The not so good part were scams. I could tell you a dozen situations and we ourselves got scammed in the process because the technology was new. A lot of people don’t understand what it does.
We started in 2014 and by 2022, we had to remove all of our machines after MAS ordered everyone with the bitcoin machines to stop in Singapore. So maybe we will one day revamp and revise the business and take it globally, in places where they allowed fiat to bitcoin. I think we might just revamp that because there were so many products that were half done. The operation was successful. We used money from the operations to develop a lot of products that are still in development mode. It’s not like we failed, if you exclude the political risk of operating in Singapore.
The political risk was much higher than I anticipated. Yes, there were a lot of issues with the banks and a lot of issues with the enforcement agencies. But overall, I think the technology will still revolutionize finance.
I’ve spent a few months at home in Utah, thinking about what to do next. My first interest and love in terms of making money was investing, when I was just a kid. Now, many years later, I’m reverting back to it because you have to do what you like. It was a joy for me and I can find happiness in that. The pay is very good if you know what you’re doing. I don’t think it’s very hard; I think it requires consistency and anyone can learn. You definitely don’t need to pay thousands of dollars to learn because the concept is very simple.
I will analyze a few companies weekly, using some of my favorite tools such as Google Finance, Yahoo Finance, and Morningstar. I will share my thoughts and opinions and aim to build a small community around this work. Although I don’t think it’s difficult, I tried it before and failed. This time, I will approach it differently. Building a community is not as easy as it seems.
Finance is all about money and how it loses its value, so you always want more of it. There are many aspects of money that are very interesting. However, the concept of compound interest, where interest earns interest, is one of the hidden secrets that can catapult your wealth. This is the most interesting concept to me.
You can start anywhere, but you have to start early. That’s the key. The other day, my daughter Haley was talking to me about work. We were on the bus and she was asking me, “Daddy, what is your talent?” I had to think about it for a moment, my answer was that was good at making money in investing. Investing has never failed me. I told her that if she can learn from me, I think she could become one of the top 10 investors in the world. She was only eight.
Investing is a combination of art, science, and luck. It requires hard work to have an element of luck. Much of it has to do with your belief system. If you believe you can do it, you are more likely to become successful. If you think it’s hard, you will never start. The worst failure is failing to begin. I want to help you start by discussing what investing is and what it isn’t. You can start by reading “Security Analysis” by Benjamin Graham, which forms the basis of my investing principles. I recommend reading “One Up on Wall Street” by Peter Lynch and “Common Stocks and Uncommon Profits” by Philip Fisher for motivation.