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
Igor Yelnik – Think About Non-Market Risks
Bogumil Baranowski – Be Careful With Businesses in Secular Decline
ISMS 17: Larry Swedroe – Do You Project Recent Trends Indefinitely Into the Future?
ISMS 16: Top 5 EM Country Interest Rates – Normal China Yield Curve
ISMS 15: Top 5 DM Country Interest Rates – Steep US Inversion
ISMS 14: Regional Interest Rates - Low in Asia, Egypt and Frontiers on Fire
ISMS 13: Global Interest Rates - Hikes Slow, Inversion Signals Recession
Peter Ricchiuti – Don’t Fall in Love With a Stock
Jason Hsu – The Market Can Be Crazy for Longer than You Have the Conviction
Shreekkanth Viswanathan – Qualitative Strengths of a Company Matter Too
Jeremy Kokemor – Tread Carefully When Investing in Metals and Mining
Paul Hodges – There’s No Substitute for Judgment
Amy Minkley – What Is Your Enough?
Benjamin Claremon – Know What Kind of Investor You Are
Edward McQuarrie – Never Ever Sell Naked Calls
ISMS 12: CPI Racing Across the Globe
ISMS 11: US Banking Crisis and Fed Rate Cut
ISMS 10: US CPI Could Decline to 4% By YE23; Unless QE Revs Up
Michelle Leder – Read the 10-K Before You Buy That Stock
ISMS 9: Saving Silicon Valley Bank Brings New Risks
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