Klilvi

Every market has a loser funding the winners. Odds don't care how sure you are.

[Klilvi @klilvi]

@vexmindhq He went against trend and that's it.

[Klilvi @klilvi]

Michael Burry's own investors called him a liar and tried to pull their money. He locked it up anyway. Two years later he made them $725 million.

In the clip below, Burry explains what he saw in the mortgage bonds that almost nobody on Wall Street bothered to read.

He was a doctor first. He lost his left eye to cancer at two, got his MD, and started a neurology residency at Stanford. At night he posted stock picks on an internet message board.

In November 2000 he quit medicine and opened his own fund, Scion Capital, with an inheritance and loans from his family.

While the dot-com bubble burst, he beat the market three years in a row. By the end of 2004 he was running $600 million and turning new money away.

Then he started reading mortgage bond prospectuses. Line by line.

On May 19, 2005 he bought $60 million of credit default swaps from Deutsche Bank. Insurance that paid only if subprime mortgages blew up. By October he held over $1 billion of them.

Every month he paid premiums. Every month nothing happened.

In 2006 the S&P rose more than 10%. Scion lost 18.4%.

His investors wanted out. He used the fund's rules to lock up the money tied to the bet.

One detail made it even worse.

In January 2006, Joel Greenblatt, his first big backer, went on TV and named Burry as one of his favorite value investors. Ten months later Greenblatt flew across the country to call him a liar and push him to drop the trade.

Burry held.

In 2007 the subprime market collapsed. From November 2000 to June 2008, Scion returned 489% after fees. The S&P 500 did about 2%.

His investors made $725 million. He made about $100 million.

Then he closed the fund.

Was he protecting his investors, or gambling with money that wasn't his?

[Reid @reidgrows]

https://t.co/YF5JtEIvDR

[Klilvi @klilvi]

J. Paul Getty was the richest man in the world when kidnappers took his 16-year-old grandson in Rome. He refused to pay.

In the video below, filmed while the boy was still missing, his mother and friends talk about the months when nobody knew if he was alive.

It was July 1973. The kidnappers asked for $17 million.

His grandfather said no. His reasoning: he had 13 other grandchildren, and if he paid once, every one of them could become a target.

Paul's father asked him for the money. Still no.

Months went by. Some people called it a hoax. Some thought the boy had staged it himself.

Then in November, a newspaper received an envelope. Inside was a lock of hair, a human ear, and a threat.

Only then did Getty agree to pay.

But not all of it.

He paid $2.2 million, the most that was tax deductible. The rest he lent to his own son, at 4% interest.

Paul was released on December 15, 1973.

At his mother's suggestion, he called his grandfather to thank him.

Getty refused to come to the phone.

He was worth billions. His grandson's life came down to what he could write off.

Do you think Getty was protecting his family, or protecting his money?

[Ember @Emberxbt]

https://t.co/XwWKTvVPuY

[Klilvi @klilvi]

Ray Dalio told Congress the US economy was "teetering on the brink of failure." Then he said it on national TV with "absolute certainty."

He ended up borrowing $4,000 from his dad to pay his family's bills.

In the clip below, he plays the old footage and calls his younger self an arrogant jerk.

Eight years into Bridgewater, he had calculated that American banks had lent far more to emerging countries than those countries could pay back.

In August 1982, Mexico defaulted. He was right.

He testified to Congress. He went on "Wall Street Week," the big money show of the time.

Then the stock market and the economy went up instead of down.

"I lost so much money for myself and for my clients that I had to shut down my operation pretty much, I had to let almost everybody go."

"I had to borrow 4,000 dollars from my dad to help to pay my family bills."

He calls it one of the most painful experiences of his life, and one of the greatest. It changed one question.

Not "Am I right?" but "How do I know I'm right?"

He went looking for the smartest people who disagreed with him. That idea became the culture of Bridgewater, which grew into one of the biggest hedge funds in the world.

He was right about the crisis and still went broke.

Have you ever been right and still lost money?

[QWERTY @0xQwertyx]

https://t.co/GUs1ndxlYE

[Klilvi @klilvi]

@Maklarenzhjh He's broke with $3.4m, so who I am with $100.000 for instance?😂

[Klilvi @klilvi]

At 11, Warren Buffett went all in on his first stock. He sold it for about $5 of profit and watched it run to $200.

In the clip below, he walks through that day himself.

March 11, 1942. The war was going badly. That day the Dow broke below 100.

The night before, he told his dad he wanted to go all in.

Three shares of Cities Service preferred at $38.25 each. $114.75, everything he had saved since he was six.

The stock dropped to $27. His sister Doris had bought in with him and reminded him about it every day.

When it came back to $40, he sold.

Then it ran to around $200.

He took three lessons from it:
> don't fixate on what you paid
> don't rush to grab a small profit
> don't take on someone else's money unless you're sure

77 years later he ran the numbers in his annual letter. If that $114.75 had sat in an S&P 500 index fund with dividends reinvested, it would have been worth $606,811.

The same money in gold: about $4,200.

The lesson wasn't about picking. It was about sitting still.

Would you have held at $27?

[Lumen @lumenxbt]

https://t.co/3hWKMIBJcw

[Klilvi @klilvi]

@kevlarpx he just got the receipt 10 years late :D

[Klilvi @klilvi]

Steve Jobs was paid about $5,000 for a game his best friend built. He told him the fee was $700 and handed him $350.

In the video below, Steve Wozniak talks about the day he found out.

It was 1975. Atari wanted a new arcade game called Breakout and offered a bonus for every chip saved under 50. Jobs promised it in four days. Then he brought in Woz.

Woz already had a full-time job at Hewlett-Packard. He designed the game at night, with no schematics, from a verbal description. The board came in under 50 chips.

Jobs collected the bonus. Woz got half of $700.

About 10 years later, Woz read the real number in a book about Atari's history.

"I cried, I cried quite a bit when I read that in a book."

His explanation, years later: "I think Steve needed money and just didn't tell me the truth. If he'd told me the truth, he'd have gotten it."

A year after Breakout, the two of them started Apple together.

If you were Woz, would you have stayed his partner?

[Rossst.03 @Rossst_03]

https://t.co/iZLuBLz082

[Klilvi @klilvi]

@batagonx too clever to manufacture is the most Woz problem ever

[Klilvi @klilvi]

@0xkumaa Honestly at 20 I would've sold for the first offer above $1M.

[Klilvi @klilvi]

@mmoklaaa Which is why the best investors back the operator and keep their advice as advice

[Klilvi @klilvi]

In 2008 he put Berkshire money into a small Chinese battery maker. Then its founder wanted to build cars, and he told him it was a really dumb idea.

"Who in the hell has ever succeeded in creating a new auto company?"

His name is Charlie Munger. His friend Li Lu found the company. Munger saw two things in its founder, Wang Chuanfu. He worked 70 hours a week. And he was a genius.

Berkshire paid $232 million for 225 million shares of BYD. Just over $1 a share.

Wang wanted to buy a bankrupt car plant and go up against Toyota and Mercedes. Munger and Li Lu tried to talk him out of it. Wang ignored them.

By June 2022 Berkshire's stake was worth about $9 billion. That year BYD sold more cars than Tesla.

Earlier in 2023 Munger said he had never helped do anything at Berkshire as good as BYD. In his last interview he added that he and Li Lu "share the distinction of urging him not to do it."

The best deal of his life worked because the founder didn't take his advice.

Would you have listened to Munger?

[Noah @xbtnoah]

https://t.co/htk4CXWcIG

[Klilvi @klilvi]

@recketino And Munger was the first to admit it

[Klilvi @klilvi]

@kevlarpx Usually, this sort of advice is unremarkable and very simple

[Klilvi @klilvi]

@tonyprediction Yes, and that explains why Buffet is rich

[Klilvi @klilvi]

He was promised $11.50 a share. The offer came in at $11.375. Over one eighth of a dollar, he bought the whole company.

"He chiseled me for an eighth".

His name is Warren Buffett. In 1964 he owned a big stake in a dying New England textile company. Its boss, Seabury Stanton, asked what price he'd tender at. Buffett said $11.50. Stanton asked him to promise.

A few weeks later the tender offer arrived in the mail. $11 and 3/8.

So he didn't sell. He kept buying, took control of the company and fired Stanton.

The company was Berkshire Hathaway.

It sounds like the best revenge in business history. Buffett calls it the dumbest stock he ever bought. He spent 20 years fighting the textile business before he gave up, and every good company he bought after that was stacked on top of that anchor.

In 2010 he did the math on camera. If the same money had gone straight into insurance, Berkshire would be worth twice as much. His number for the grudge: $200 billion.

It's his own estimate and nobody can check it. But he chose to tell it against himself.

Would you have taken the eighth and walked away?

[Lima @limalemonnn]

https://t.co/Fag8fBfBWv

[Klilvi @klilvi]

@thedrbryte Saying no thousands of times sounds easy until you try it for one week

[Klilvi @klilvi]

@yuradeniis Pickens didn't need to own Gulf. He just needed Gulf to be scared he might

[Klilvi @klilvi]

@reidgrows He eats McDonald's for breakfast with $150B. I think he figured out happiness before the money showed up😂

[Klilvi @klilvi]

@shevaxgod That’s a good point, it makes sense

[Klilvi @klilvi]

At 41 he sold his 10% of Apple for $800. Twelve days after he signed.

"I was standing in the shadow of giants and as a result I knew I was never going to have a product of my own"

His name is Ronald Wayne. In 1976 he was the adult in the room next to Steve Jobs and Steve Wozniak. He drew Apple's first logo and wrote the partnership agreement.

Then the company started buying parts on credit. As a partner he was personally on the hook for those debts. The two Steves had almost nothing to lose. He did.

When Apple became the first trillion-dollar company, CBS put his old stake at $100 billion.

That number is lazier than it looks. Every funding round after 1976 would have diluted him, and he would have had to stay through all of it.

The part that stings is smaller. He kept the original partnership agreement and sold it in the early 90s for $500. In 2011 it sold at auction for about $1.6 million.

He wasn't wrong about Apple. He left because of what the position could cost him along the way. The article below is about exactly that gap, between being right and keeping it.

Would you have signed away your 10% at 41?

[Shevaxgod @shevaxgod]

https://t.co/Z1EE80pMp2