What I Learned Losing a Million Dollars

54 Comments

6153243027_8a5ed7bc0b - poker(Photo: Ariel H.)

“One of the rare noncharlatanic books in finance.”
– Nassim Nicholas Taleb, author of The Black Swan and Antifragile

“There is more to be learned from Jim Paul’s true story of failure than from a stack of books promising to reveal the secret formula for success…this compact volume is filled with a wealth of trading wisdom and insights.”
– Jack Schwager, author of Hedge Fund Market Wizards

The newest book in The Tim Ferriss Book Club (all five books here) is a fast read entitled What I Learned Losing a Million Dollars. It packs a wallop.

This book came into my life through N.N. Taleb, who has made several fortunes by exploiting the hubris of Wall Street. Given how vociferously he attacks most books on investing, it caught my attention that he openly praises this little book.

My first dinner with Nassim was in September of 2008. It was memorable for many reasons. We were introduced by the incredible Seth Roberts (may he rest in peace), and we sat down just as Lehman Brothers was collapsing, which Taleb had — in simple terms — brilliantly shorted. We proceeded to drinking nearly all of the Prosecco in the restaurant, while talking about life, business, and investing. Lehman Brothers would end up the largest bankruptcy filing in US history, involving $600+ billion in assets.

The next day, I had a massive hangover and a hunger to study Nassim. Step one was simple: reading more of what he read.

I grabbed a copy of What I Learned Losing a Million Dollars, and I’ve since read it many, many times. For less than $20, this tool has helped me avoid multiple catastrophes, and I can directly credit its influence to roughly 1/2 of my net worth (!). The ROI has been incredible.

The book — winner of a 2014 Axiom Business Book award gold medal — begins with the unbroken string of successes that helped Jim Paul achieve a jet-setting lifestyle and land a key spot with the Chicago Mercantile Exchange. It then describes the circumstances leading up to 7-figure losses, and the essential lessons he learned from it. The theme that emerges: there are 1,000,000+ ways to make money in the markets (and many of the “experts” contradict one another), but all losses appear to stem from the same few causes.  So why not study these causes to help improve your odds of making and keeping money?

Even if you don’t view yourself as an “investor,” this book can help you make better decisions in life. Also, the stories, similar in flavor to Liar’s Poker, are hilarious and range from high-stakes baccarat to Arabian horse fiascos.  For entertainment value alone, this book is worth the time.

I hope you enjoy — and benefit from — the lessons and laughs as much as I have.

For those who enjoy both audio and Kindle, as I do, the above editions are synced with Whispersync. This means that if you get both the audio and Kindle, you can switch between the two. For instance, I like to read Kindle books on my iPhone on the subway, then pick up and listen to the audio while walking outside.

Would you be interested in interviewing the co-author, Brendan Moynihan? Brendan is a Managing Director at Marketfield Asset Management ($20 billion of assets under management) and the Senior Advisor to the Editor-in-Chief of Bloomberg News, among other things.

If you’re a journalist, blogger, podcaster, etc. interested in the book’s lessons, feel free to reach out to him at bmoynihan [at] bloomberg {dot} net.

I recently interviewed him myself for an hour about investing, how he met Jim Paul, and much more. Click below to listen to the conversation, or (if reading via email) you can click here to stream/download the MP3:

For those who want a short synopsis of the book, here you go:

Jim Paul’s meteoric rise took him from a small town in Northern Kentucky to governor of the Chicago Mercantile Exchange, yet he lost it all — his fortune, his reputation, and his job — in one fatal attack of excessive economic hubris. In this honest, frank analysis, Paul and Brendan Moynihan revisit the events that led to Paul’s disastrous decisions and examine the psychological factors behind bad financial practices in several economic sectors.

Paul and Moynihan’s cautionary tale includes strategies for avoiding loss tied to a simple framework for understanding, accepting, and dodging the dangers of investing, trading, and speculating.

###

54 Comments / Leave a comment or question

The Tim Ferriss Show: Interview with Peter Thiel, Billionaire Investor and Company Creator

164 Comments

team_peter

“Freedom lies in being bold.” – Robert Frost

This episode’s guest is the incredible Peter Thiel.

Peter is a serial company founder (PayPal, Palantir), billionaire investor (first outside investor in Facebook, 100+ others), and author of the new book Zero to One. Whether you’re an investor, entrepreneur, or simply a free thinker aspiring to do great things, I highly recommend you grab a copy.  His teachings on differentiation, value creation, and competition alone have helped me make some of the best investment decisions of my life (e.g. Twitter, Uber, Alibaba, etc.).

This podcast episode was experimental, as I was on medical leave.  It includes both audio and written questions. What are Peter’s favorite books?  Thoughts on tech and government, and more?  Answers to these “bonus questions” can be found in the text below.

For the longer, main audio discussion, you can:

Now, a bit more on Peter… Read More

164 Comments / Leave a comment or question

The Tim Ferriss Show: Interview of Kevin Kelly, Co-Founder of WIRED, Polymath, Most Interesting Man In The World?

85 Comments

KevinKellySF

This single interview — one of my favorites of all-time — was recorded in three short parts.  You can:



This podcast is brought to you by The Tim Ferriss Book Club, which features a handful of books that have changed my life. Here’s the list.  You can also find all 20+ episodes of this podcast here. Some are sober and some are drunk, but the guests are all great.

Now, on to this episode’s guest…

Kevin Kelly might be the real-life Most Interesting Man In The World.

He is Senior Maverick at Wired magazine, which he co-founded in 1993. He also co-founded the All Species Foundation, a non-profit aimed at cataloging and identifying every living species on earth. In his spare time, he writes bestselling books, co-founded the Rosetta Project, which is building an archive of ALL documented human languages, and serves on the board of the Long Now Foundation. As part of the last, he’s investigating how to revive and restore endangered or extinct species, including the Wooly Mammoth.

This episode touches on a lot of cool stuff.  SERIOUSLY, A LOT.

Just scroll below and your head might explode.  Tons of amazing links and goodies…

Enjoy!

Who should I interview next?  Please let me know in the comments by clicking here.
Do you enjoy this podcast? If so, please leave a short review here.  It keeps me going…
Subscribe to The Tim Ferriss Show on iTunes.
Non-iTunes RSS feed

Read More

85 Comments / Leave a comment or question

The Random Show, Episode 25 — Gut Bacteria, Meditation, Startups, and More

165 Comments

If you can’t view the above video, please click here or here. To download the audio as an MP3, just right-click here and choose “save as.”

There are dozens of topics covered in this bromantic episode of scatterbrained banter.

Like what? To start off: tracking gut bacteria, favorite documentaries, keys for novice meditators, startup lessons, Kevin’s new obsessions, and more. O-tanoshimi dane!

The last few blog posts have been rather serious, so this is intended as an informal (but still informative) mind snack.

For all previous episodes of The Random Show, including the epic China Scam episodeclick here.

Enjoy!

Select show notes and links are below.  Some good stuff in this episode’s resources…

LINKS FROM THE EPISODE

165 Comments / Leave a comment or question

The Truth About “Homeopathic” Medicine

601 Comments
Homeopathy -- effective, useless, or dangerous? (Photo: Marcos Zerene)

Homeopathy — effective, useless, or dangerous? (Photo: Marcos Zerene)

[Audio version]

[Text version]

I routinely use an arnica gel for minor muscular strains. In fact, it’s one of my “go to” treatments.

In 2010, however, I found myself swallowing Boiron Arnica Montana 30C pellets, an oral version that was the only option at the closest GNC. I started at five pellets, SIX times a day–TWICE the recommended dose. Risk of overdose? Not likely.

“30C,” which I looked up that evening, tells you all you need to know.

This consumable version of arnica, unlike the creams I’d used in the past, was a homeopathic remedy. Samuel Hahnemann, a German physician, pioneered the field of homeopathy in 1796, if the term “pioneer” can be applied to alternative “medicine” founded on concepts like mass dilution and beatings with horse-hair implements. From the Wikipedia entry for “homeopathic dilutions,” last I looked:

Homeopaths use a process called “dynamisation” or “potentisation” whereby a substance is diluted with alcohol or distilled water and then vigorously shaken by ten hard strikes against an elastic body in a process called “succussion”… Hahnemann believed that the process of succussion activated the vital energy of the diluted substance.

Riiiight.

Back to 30C. 30C indicates a 10-60  (10^(-60), or 10 to the negative 60th) dilution, the dilution most recommended by Hahnemann.

30C would require giving 2 billion doses per second to 6 billion people for 4 billion years to deliver a single molecule of the original material to any one person. Put another way, if I diluted one-third of a drop of liquid into all the water on earth, it would produce a remedy with a concentration of about 13C, more than twice the “strength” of our 30C arnica.

Most homeopathic remedies in liquid are indistinguishable from water and don’t contain a single molecule of active medicine. In systematic review after systematic review, these dilutive homeopathic remedies display no ability to heal beyond placebo.

I found this particularly bothersome. Bothersome because I appeared to heal faster using oral 30C arnica.

There are a few potential explanations… Read More

601 Comments / Leave a comment or question

The Tim Ferriss Show, Episode 22: Ed Catmull, President of Pixar, on Steve Jobs, Stories, and Lessons Learned

68 Comments
Ed Catmull, President and Co-Founder of Pixar.

Ed Catmull, President and Co-Founder of Pixar.

NOTE TO E-MAIL SUBSCRIBERS: Please see this post in your inbox for a recording of the recent 2.5-hour live Q&A. Not on the email list? Sign up here and get extras like this for free.

Listen on iTunes, download (right click “save as”), or stream below now:

This podcast is brought to you by The Tim Ferriss Book Club, which features a handful of books that have changed my life. Here’s the list.  You can also find all 20+ episodes of this podcast here. Some are sober and some are drunk,  so you can roll the dice.

Now, on to our guest…

Ed Catmull is co-founder of Pixar Animation Studios (along with Steve Jobs and John Lasseter) and president of Pixar Animation and Disney Animation. Ed has received five Academy Awards, and — as a computer scientist — he has contributed to many important developments in computer graphics.  He is the author of  Creativity, Inc., which Forbes has said “just might be the best business book ever written.” (!)

This episode touches on a lot, including lessons learned from George Lucas and Steve Jobs, the origins of Pixar, personal challenges, routines, and much more.

Show notes and links are below.  Enjoy!

Subscribe to The Tim Ferriss Show on iTunes.
Non-iTunes RSS feed
Do you enjoy this podcast? If so, please leave a short review here.  It keeps me going… Read More

68 Comments / Leave a comment or question

How to Never Check Luggage Again

227 Comments
Travel has many joys. Luggage is not one of them.

Travel has many joys. Luggage is not one of them.

NOTE: If you signed up for my email list, please see this post in your email (perhaps on Saturday afternoon PT) for the Monday night Q&A info.

This post will explore three options for never checking luggage again. Some of them are extreme; all of them are effective.

In my next post, I’ll detail what I (and some friends) pack in carry-on. Some are surprising and hilarious.

Given that I spend 100+ days of the year traveling, and that I’ve been to 40+ countries, I’ve tested just about everything.

Hauling a five-piece Samsonite set around the planet is hell on earth. I watched a friend do this up and down dozens of subway and hotel staircases in Europe for three weeks, and — while I laughed a lot, especially when he resorted to just dragging or throwing his bags down stairs — I’d like to save you the breakdown. Trip enjoyment is inversely proportionate to the amount of crap (re: distractions) you bring with you.

So, how to avoid checked luggage altogether?

We’ll cover three different options, in descending order of craziness. I promise that something in this post will work for every one of you, even if partially:

– Using “urban caching” for travel purposes
– Mailing instead of checking (and some Steve Jobs-ian quirks)
– Ultralight packing

Many of these suggestions have been given to me by readers over the years, so thank you!

I try and bring such gifts full circle by collecting hundreds of tips, testing them, and publishing the winners.

So here we go… Read More

227 Comments / Leave a comment or question