Dear diary, it's been a long time...

I made a New Year's resolution to start posting on the blog again, which until 28 January didn't happen. Fortunately Chinese New Year's came around and thought that I got a new shot at this (I'm grateful for a multi-cultural family). Posting has been very intermittent (it's a nice way of saying basically 0) in the past year mostly due to increased time allocated to private investments, angel investments/advisory and a book project (more on this below) among other things. I thought that it would be a fun way to kick off the year by having a recap on some of the lessons I learnt in 2016 (some by choice, while some by big slap on the face). Here it goes in no specific order:

Curiosity conversations

A couple of years ago I've adopted a practice from Brian Grazer, the legendary Hollywood producer, which he called "curiosity conversations". When he started out in life he made a practice of reaching out to people, not necessarily in his field, he didn't know (this was way before the internet) and engaging in a conversation about what they do. I thought that this sounded like a lot of fun so why not try it. Over the years I have been very fortunate to meet successful entrepreneurs, health coaches, nutritionist, doctors, spiritual teachers, real estate developers, investors, chefs, graphologists, authors, farmers, teachers, VCs, bankers, philanthropists, artists, photographers and on and on and on. The first few approaches and conversations were weird (I mean you talk to total strangers and tell them that you want to ask a bunch of questions and no you are not a reporter). But I learnt that people are really interested in people who are really interested in them. With that the weirdness disappeared.

Writing a book is hard

Really, really hard. Especially when it is about your own life. A few months ago I posted an article about the story of Peter Barton and my experience with cancer. The book is nearly completed and expected to be published in the next few months. More details to follow soon.

The right people and what you do, over money

ANY DAY! From experience more money without more meaning means more misery. There is a time and place for putting up with an awful situation for a while or as Elizabeth Gilbert calls it "eating a shit sandwhich" to get to where you want to go but for argument's sake if you find yourself saying to yourself "just one more bonus" then it's time to look at something else.

Attending your own wedding is a lot of fun

This is for sure. My wife and I got married late last year in Asia and having our friends and families join us was simply amazing. Someone said that the quality of a person's life can be judged by how many people show up at their funeral (at their own will). While this might sound morbid, looking around the room that evening and seeing people who traveled thousands of miles to be there left both of us feeling extremely grateful. OK, we did go to karaoke afterwards until 6am so maybe that's the real reason they joined. Mic drop!

The way to have a great partner is to deserve one

This is from Charlie Munger and once again he is right. I also read from a famous waterpolo player (yes, it's a very popular sport in Eastern Europe where I come from) that to be a great team player you should always give the pass you expect to receive.

Do less "low-quality more" and more "high-quality less"

After you are done testing and experimenting, find a few ideas and go deep. We have the option to do anything we want to but cannot do everything. The only way to achieve mastery in one subject is sticking with it (i.e. Buffett's idea of painting that one picture).

Give more

Yes! Whether it's time, money, love, smile or attention just do it. The more I did it last year the more came back to me in totally unexpected ways. Given the limited human interactions we now have on a daily basis people crave attention. If you can give a little more you'll be surprised what you'll get back. If you are at an airport, your flight gets cancelled and you are the 156th person who walks up to the poor flight attendant who has been taking the abuse of her lifetime for the past 30 mins yelling at her will not get you anywhere. But being emphatetic might get you a nicer hotel room for the night and an upgrade on the next flight (it happened to me on a trip to the US). This is not tactical or aimed at "getting anything out of it" but this is simply good for the soul. Imagine if you were the one taking the abuse, how would you like to be treated.

Books, books and more books

Over 60 books read last year. I find it amazing that if I spend $10 on a few hundred pages of paper I can learn to become a better investor, businessman, philantropist and so on. Living vicariously and not making the mistakes others did in front of me (or at least making better mistakes) is priceless.

2016 book summary post to come soon.

Billionaires and self made people in general think differently

I've been very fortunate to have a network that includes some seriously wealthy people. The large majority of them are first generation/self-made entrepreneurs. Despite what is thrown around in the media and self-help courses they don't go "all-in" from day 1 rather run what I call a series "controlled experiments". Their number 1 priority is protecting the downside and in case something sticks you can always add more to it (time, energy, money etc). The example that comes to mind is Sir Richard Branson's entry in the airline business. He didn't go and buy planes rather called up Boeing asked for lease terms then one by one he started taking people on flights worthy of an Austin Powers movie. Ultimately Virgin Airlines was a success, however even if he failed the downside would have been controlled.

Sometimes you have to let go temporarily of what you know to find yourself

For a long time I thought that public equity value investing was "my thing". At the beginning of 2016, I felt the urge to step away and explore other avenues of business and investing. I got involved in more PE, VC and angel type investing as well as managements/boards of companies. It was fun. What I think I missed all along was the human interaction in business. I got a whole new appreciation for how Buffett runs Berkshire and how much public investors underestimate the question of managements/boards (note to self: when there are emotions involved rationality goes out the window). Buffett was right when he said in the recently released "Becoming Warren Buffett" HBO documentary (btw, it is amazing) that you can understand investing from a book but you cannot understand people by reading books. So I learnt that value, patience and compounding work for me, however there is more than one way of expressing these ideas. What these qualities give me is a guiding principle. These give me a "why" but "how" I plan to apply them is really where the fun starts. This doesn't just apply to investing btw.

Trade expectations for appreciation

I heard this from Tony Robbins recently. Note to self: there is nothing wrong with expectations but before you go one step further make sure that you are grounded and appreciate what you do have. Expecting constantly without appreciating will drive you crazy.

Btw, Tony's I'm Not Your Guru documentary is a must watch. Looking forward to attending his UPW seminar in London this April.

Not Fade Away Book Review and My Story

Just a heads up that this is a very personal post, with limited relevance to investing. Proceed at your own risk.

This book has to be one of the most moving ones I read in a while and thought it was worth writing a review with some of my personal reflections as well. The recommendation originally comes from Tim Ferriss' interview on his podcast with Chris Sacca. Chris is a VC but has taken a different approach to the traditional way of doing things and his portfolio includes a number of companies that turned out to be unicorns (his interview and story are worth checking out).

Back to the book. The story is about Peter Barton whom along with John Malone completely changed the cable industry. Peter was part of the baby boom generation and accredits his growing up in this era, where kids weren't pressured to become astrophysicists at age 5, to much of his success in life. He has been an all around bon vivant, musician, self-described ski-bum, Columbia University student, political campaign strategist, working in politics and eventually going to work for John Malone as his right-hand man turning the cable industry inside out and retiring in 1997 at the age of 46 to spend time with his family. Except life had other plans...he passed away in 2002.

He was diagnosed with stomach cancer, which after a while seemed to have been cured, however it unfortunately came back in a terminal version one year later. During the last period of his life Peter got together with writer Laurence Shames to put all of his life and experiences on paper, which resulted in this gem of a book. At first he was reluctant to get involved in this project: "I tried my damnedest not to get involved in the writing of this book, or with a man named Peter Barton, whose life it celebrates and whose death it chronicles. My reason for resisting was simple: My own small existence was on a very pleasant, even keel; I didn't want to disrupt it by getting close a dying stranger. I didn't want to think about mortality, still less watch death happening from day to day. I didn't want to grow to care about a family that would soon be fatherless". Fortunately for the readers he did get close and wrote this wonderful book.

Instead of going through the whole book I thought to take out a few parts and lessons that stuck with me the most as I was reading it. You can read about Peter Barton's life in his obituary.

"Funeral Test" (i.e. whoever has the biggest funeral wins): "The official recognition [of Peter's achievements] was impressive...and yet it seemed oddly impersonal, beside the point. Peter would have been more pleased, I think, to see the hundreds of friends who rallied around his family. Kids he'd coached, or taken along on his Real World Outings. Colleagues he'd advised and schemed with. Neighbors whose dogs had gotten muddy alongside Peter's dogs. People he'd skied with, or biked with, or with whom he'd sat around the piano and jammed and wailed. More than fifteen hundred of these friends and colleagues and acquaintances turned out for Peter's memorial - an event intended not for mourning but for celebration. There was a gospel choir, and a children's choir in which Kate [his daughter] sang. There was food and wine. There was a stitched together video of Peter's life, accompanied - of course! - by a rock'n'roll soundtrack. And there were speeches. In keeping with the spirit of the evening, the speakers passed lightly over the subject of Peter sick and dying, still seeking meaning in the face of pain and honest doubt. Instead, they spoke of Peter in his glory. Peter, who believed that nothing was impossible. Peter, who could step into a situation, overwhelmed but never daunted, and master it. Peter who skied too fast, drove too fast, worked too hard, and made it all look easy."

Finding the right spouse: "Relationships had been one of those aspects of life in which I made things harder for myself, was too feisty for my own good. I'd waffled on commitment. I'd sometimes been unkind by simple inattention, being too wrapped up in other things. I don't think I'd ever truly let someone into my life. I was also saddled with the odd and macho notion that a man needed different sorts of woman at different ages. [...] What I was too dumb to realize, of course, was that if you were lucky enough to meet the right woman, she was all of those things and more - and the two of you evolved together. When I met Laura [his wife] I finally started to understand that. And thank God I did. [...] Previously, if there were difficulties, rough patches in relationships, I walked. Now we worked things out. Previously, I did things my own way, by reflex. Now I was willing to pause, to see the wisdom in Laura's way. It was crucially important to me to get this right, because I had the absolute conviction that if Laura and I started a family, we would stay together forever."

It's not all about the money: "It was a messy beginning, but CVN really took of. Within two years it was a billion-dollar business with forty-six hundred employees. But I'm a start-up guy by temperament, and by then I was tired of running it. The only way to make a graceful exit was to merge the company with another recent start-up called QVC. At this point I could finally sit still long enough to consider my stock options. I saw what they were worth - three million bucks, a million and a half after taxes! - and cashed them in at once. Now, some people might say that a million and a half dollars is not a lot of dough, but to me it was that most elusive amount: enough. Enough so that I was confident my wife and kids would be secure. Enough so that everyone would have a home and tuitions would be paid. Enough so that if I dropped dead tomorrow, everyone would be okay. I was over the hump. I could do right as a father. I was thirty-eight when that money came to me. More money has come as money does; it takes on a momentum of its own. But the rest has been Monopoly dough, just a way of keeping score."

Teaching kids about the world beyond school: "Just as it's crucial for underprivileged kids to be shown that there are possibilities beyond their neighbourhoods, it's also important for overprivileged kids to see other sides of life. I didn't want my kids to grow up in an abstract world of deals and numbers and money that just happened. I wanted them to understand that people worked hard, at a gloriously wide range of things, and that there was dignity in all of them. So I bought a big stretch van - my rolling locker room - and started taking my kids and their friends on what I thought of as Real World Outings. They were like school field trips, but without the onus of school. I was never "Mr. Barton". I was always Peter. [...] Every outing had a theme. "Grease" - where we looked at the realities of fast food. "Garbage" - where we followed the trail of household trash, and of recycled cars and asphalt and concrete. [...] Sometimes, at the end of our outings, there'd be the strangest sound in the van: silence. How rare was that? Ten or twelve kids, thinking something over."

Oh and a practical one about job applications: [after finishing his MBA] "As a matter of personal preference and quality of life, I would only work in Boston, San Francisco, or Denver. Well, with all those conditions I was clearly limiting my options. But I did my homework, and I came up with a list of possible employers. I started with a personal Who's Who of 231 names and sent each of them a letter [offering to work for free for a period]. Amazingly, 123 CEOs responded. For various reasons, that group was gradually whittled down to three possibilities in Denver. There was a hippy tea company and two-cable television outfits. The tea people didn't really want me, and of the cable companies was already top-heavy with MBAs. That left a dinky little outfit called TCI, which was headed by a seat-of-the-pants, feet-on-the-desk visionary named John Malone. From our very first conversation I realized that Malone was the guy I wanted to work for. He thought huge. He was informal, original, and totally audacious."

And one last quote in closing: "If I have anything at all to teach about life, it probably comes down to these two simple but far-reaching notions: Recognizing the difference between a dumb risk and a smart one, and understanding when you need to change direction, and have the guts to do it."

My Story

I'm always fascinated with the next chapter after our lives and books like these or Bronnie Ware's actually help reduce the fear, at least for me. Don't get me wrong it's not something I'm seeking out actively but there was a period in my life when I had to face it, very fortunately my story turned out better than Peter's.

Let me explain. Many years ago I was diagnosed with an advanced stage cancer, fortunately however it was entirely treatable. I still remember learning about it at first. I was in my car and everything around me has seemed to have slowed down with an odd sense of quietness that to this day I cannot describe. At first you go through phases of denial (i.e. I'm way too healthy, way too young, and so on) and then you realise that there are no ways around it, only through it. Over the next few weeks I've read everything I could get my hands on about what this is, what's involved in terms of the treatment, side effects but nothing can prepare you for the shock that you are going to experience.

The physical pain and side effects are one thing, however what's tougher is dealing with your own psychology. I'll spare you all the horrors about the first part, however the second is worth exploring a bit. I've realised that it's not until you accept that you have this illness you can face it head on, and the earlier you accept the better. Once your mind is fully on board you've conquered yourself and your fear, which is half the battle as they say. I mean it. I've experimented with different approaches to going through treatment days but what always worked is going to the hospital in the right state of mind (i.e. that this can be cured and I'll do my best to do it). This was a game changer. At the very beginning there were days when I just couldn't bring myself to be fully functional and that was trouble. A standard one day treatment would take two days, there would be complications, pain and so on, so these experiences served as a good guidepost that no matter what you just cannot give up. Perhaps the saddest part that I had to experience and see first hand is children and the elderly having to go through this pain and sometimes having the worst outcome. It's just simply unfair and terrible to see the vulnerable go through this but you've to block these events out otherwise they'll overwhelm your mind.

I'd share one short story from that year. I came to the very end of the treatment, however unfortunately I wasn't yet fully cured. This was hugely negative as I was completely exhausted by the end. The doctors (to whom I'm eternally grateful) suggested more and stronger treatment, but as they say doing the same thing over and over again and expecting different results is insanity. I thanked them for their help and guidance but politely declined and took three peaceful months off from everything. I went with my gut and experienced a strange sense of calmness. At the end of the third month a regular check-up showed that I was fully healed. Cancer treatment puts a huge amount of stress on your body (it's why people lose their hair for instance) and somewhere deep down I knew that ultimately doing more of the same wasn't the right answer. I would have only gotten weaker or who knows what would have happened. The downside to this three month break would have been a few months delay in this treatment if things didn't turn out for the better. Sometimes your gut already knows what's best for you, you just have to listen to it. Since then I'm watching my health like a hawk, sometimes driving doctors crazy.

Extreme events in life have a tendency to reduce the fear we experience and it is no different for me. Your worst case scenario (i.e. what's the worst that can happen if I do ABC) shifts drastically. Interestingly it didn't make me believe that I'm infallible, but more rational I'd say and grateful for all the opportunities I got since. Life just snowballs for the better once you let go.

I've been thinking throughout the years the lessons I've learned from this experience and over time have whittled it down to four that I'd like to share that might be helpful if you find yourself in a tough spot:

• Accept your situation. It doesn't mean giving up but the earlier you are ready to face reality the earlier you can start affecting outcomes
• Figure out your next move. Once you took control back of your own mind you are ready to make a plan. I did a lot of homework to understand what I'm facing, read everything I could get my hands on, talked to people, reorganised my life so that healing would be the number one priority. And I followed through that plan regardless of the pain
• Have a great support network. This is hugely important. I'm eternally grateful to my family, friends, doctors and all the acquaintances that stood by me during this year. The treatment is something you've to go through yourself (and I never let anyone come to the hospital with me) but boy having people who look after you, guide and support you makes the recovery easier. Interestingly, this little exercise was also helpful in figuring out the people I should cut from my life...
• Make the most of it (because "enjoy it" would be morbid). It's very rare that something this extreme happens in your life (and I truly hope that it was a once in a lifetime thing) but these events have a tendency to prepare you for next chapters in your life so don't let a day go by unused. Make plans and execute. It made me more focused, determined and as I said above the most important lesson for me was learning to manage my own fear

The main message for me after reading Peter's book (and without trying to sound too much of a cliche) is that today is the youngest you are ever going to be. There are many types of lives that we live (some large, some small depending on your definition) but the end is universal, it just comes and you don't know when. The question is what you want to accomplish between now and then.

I highly recommend this book for anyone interested about life (and death), how to pack a lot into a short life, business and many other topics. Reading this will make you cry, if not then there is probably something wrong with you. As I was reading more and more about Peter I came across a great two hour interview with him that is just full of wisdom and great insights, highly recommend watching that too (also great insights into the early days of TCI and John Malone)!

Additionally, here is an insightful interview with author Laurence Shames on his experience of writing this book.

All the quotes are sourced from: Not Fade Away: A Short Life Well Lived by Laurence Shames and Peter Barton (Amazon)

About this blog and me

After a few write-ups I thought it was worthwhile to give some background, essentially an “about me” missive to shed some light as to how I came to value investing.

I was born in the CEE not too long before the one team, one dream idea of left-wing economic and political cohesion was in its last inning, so capitalism was an acquired taste for me. I got interested in business in high school and read every biography I could find on successful people to learn about their stories. I came across a few articles, then a few books on Buffett and via him I got an introduction to value investing, needless to say I was sold.

After high school I was fortunate enough to study abroad and spend semesters overseas working and studying. I was exposed to many ideas, experiences and people so those years had a tremendous impact on me. I’m very grateful for the people who made it possible and doors it has opened up. I also happened to have acquired a few three-letter qualifications but not one of them helped me make a single dollar in the markets. I believe that investing is "reps and sets" and you’ve to be innately curious; the more situations you see the better you become and not something you learn from textbooks. While he was in a different line of business, Biggie put these ideas very succinctly:

“Gotta try to stay above water y'know. Just stay busy, stay working. Puff told me like, the key to this joint, the key to staying on top of things is treat everything like it's your first project, nomsayin’. Like it's your first day, like back when you was an intern. Like, that's how you try to treat things like, just stay hungry.” - Notorious B.I.G interview sampled on Jay Z’s “My First Song”

I started investing while at university and have been at it since, with the last 4-5 professionally. My investment approach can be characterised as “go anywhere that’s cheap”, regardless of geographies and sectors, but with a bias towards smaller capitalisation companies.

I have a great interest in emerging markets but I’ll not beat up on the things you probably heard about the “emerging billions”, “consumers of the future” and so on. I certainly believe in the underlying trends, however you certainly have to pick your spots, as valuations are not as attractive as say 10-15 years ago. While I claim to have no special insight, I feel that I have a good understanding of the various fundamental drivers given my background as I experienced political and economic changes first hand.

In addition to EM, special situations always have a special place in my heart although from my experience by and large these occur in developed markets. Situations where there are natural/forced sellers such as large company spinning off a small subsidiary, operational/financial difficulties, bankruptcies and so on, create opportunities that attract me. What I like about these cases is that more often that not, you normally have to figure out two or three key factors to understand what causes the mispricing and develop a thesis. If you cannot you pass and go to the next one. As the price movement of these securities is reliant upon certain developments it’ll move less with the general market, which can be great. I do believe it’s important to keep a flexible approach and be able to invest successfully more than one way.

So what can you expect from this blog? A random selection of ideas that I think are interesting and 2-4 write ups a month as well as posts on articles/interviews/videos on investing and business that I think are worthwhile to share. Starting this blog will be a good way for me to keep track of some ideas and to organise my thinking as well as to develop a platform to share and discuss ideas with other like minded investors.