My Worst Investment Ever Podcast
Business:Investing
BIO: Harley Bassman is an industry thought leader and commentator on macroeconomic issues spanning decades.
STORY: In 2019, Harley bought some calls and sold some puts on Citibank stock for a cost strategy. He believed the stocks would increase because all its peers were trading above their book value. When COVID came, the stocks went south, causing Harley to make his biggest loss ever.
LEARNING: When something trades well below what you think its value is, consider why that’s the case. Size the investment.
“Forget timing; size the investment. Pick the size such that you’ll make enough if you’re right, you’ll make money enough, and if you’re wrong, you won’t get wiped out.”Harley Bassman
Guest profile
Harley Bassman is an industry thought leader and commentator on macroeconomic issues spanning decades. He spent 26 years at Merrill Lynch. From 2014 to 2017, Harley was an Executive VP and Portfolio Manager at PIMCO. In 2011, he joined Credit Suisse’s Global Rates. In 2006, he built the RateLab, a full spectrum US Rates Trading Desk Strategy Group.
Presently, Harley is a Managing Partner at Simplify Asset Management. He continues to pen an episodic macroeconomic Commentary as well as manage a “hedge fund of one.”
Harley has a B.A. in management science from the University of California, San Diego, and an MBA in finance and marketing from the University of Chicago.
Worst investment everIn 2019, Harley bought some calls and sold some puts on Citibank stock for a cost strategy. He believed the stocks would increase because all its peers were trading above their book value. Harley put more into this trade than he logically should have. He was hung up on the value construct and wasn’t thinking about why the stock traded under tangible.
When COVID came, the stocks went south, causing Harley to make his biggest loss ever.
Lessons learnedDon’t fall into a value trap. Be careful of single names because there’s always a lottery effect that you can never predict.
Harley’s recommendationsHarley recommends reciting his Maven mantra: Number one, it’s always about character. Number two, it’s never different this time. And number three, you’re born, you live, and then you die. Prioritize your life.
No.1 goal for the next 12 monthsHarley’s number one goal for the next 12 months is to focus and spend more time with his family.
Parting words“Just be careful and stay safe.”Harley Bassman
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Connect with Harley Bassman
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Christopher Panagiotu – Go With Your Gut, but Verify
ISMS 29: Larry Swedroe – The Shiny Apple is Poisonous and Information is Not Knowledge
ISMS 28: Stocks for the Long Run
Folarin Daniel Adeboye – Business and Friendship Can Never Mix
Dana Anspach – Loving a Product Is Different From Running a Business
ISMS 27: Larry Swedroe – Familiar Doesn’t Make It Safe and You’re Not Playing With the House’s Money
Manisha Thakor – Invest in Your Financial Health and Emotional Wealth
Richard Smith – Anything Valuable Is Hard
David Perry – Bet on the Person, Not the Idea
Tom Wall – If You Make Some Money, at Least Take Half off the Table
Rick Warner – Be Careful When Investing in Banks
Mohit Tater – You Don’t Know What You’re Getting Into Until You Are in It
Vorathep Srikuruwal – Walk That Property Before You Buy It
Phil Bak – Be Slow to Jump Onto Bandwagons
Jack Schwager – Never Stay in a Position That Violates What You Believe In
Sampark Sachdeva – Don’t Be Afraid to Take the Plunge
ISMS 26: Larry Swedroe – Are You Subject to the Endowment Effect or the Hot Streak Fallacy?
Vishal Bhardwaj – Do Not Let Emotions Run Your Business for You
Harjeet Khanduja – Work Smarter Not Harder
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