Aswarth Damodaran

Aswath Damodaran
http://pages.stern.nyu.edu/~adamodar/

I found out about this guy through Michael Burry's techstocks posts; in one he mentions making his way through Damodaran's "Investment Valuation" textbook (which I now have a copy of):
http://www.siliconinvestor.com/readmsg. ... id=1975723
http://www.siliconinvestor.com/readmsg. ... id=2243805

Damodaran's website seems extremely useful (to my non-expert eyes): you can watch every lecture of his Valuation and Corporate Finance courses (from 2011, so very recent), you can download what seems to be every paper he's ever written, you can find lecture notes and syllabi from seemingly all of his talks and courses, and you can find tons of data and spreadsheets that would be useful to someone doing valuation.

Q: If Damodaran is so smart, why isn't he rich? 
A: He raises this point himself in the first or second lecture of his valuation class, except he says it more like, "If valuation gave you sure answers, do you think I would still be teaching this course? I'd be rich!"
1) One guess: Damodaran's valuation methods focus quite a lot on what he calls "intrinsic value" (the goal being to avoid the effects of fads by focusing on the actual profitability of the business) whereas in the real world you need to understand how the other players in the game (other investors) think and are likely to behave. It's like playing poker: Damodaran has been studying the probabilities at the cost of learning how to read and manipulate the other players.
2) A second guess: it has to be the case that Damodaran has not been consistently right about his investments. The quote above from him suggests as much, and if he had been consistently right, he could have easily raised money and become rich from managing it. [Later: Hmm...you could be consistently right but never establish a public record of your investments. Burry raised money because he was very outspoken on forums and with his writing gig about what his bets were.]
[Later: 3) Getting rich seems to not be solely a function of how smart you are. A lot of the time you have to work really hard for many years, even if you're smart. If the marginal value of that extra money isn't worth the marginal cost, you won't bother to put in the work necessary to get that money.]

Ben Bernanke of the Federal Reserve

rec'd further reading on Fed policy and the housing bubble:
Kenneth Kuttner - Low Interest Rates and Housing Bubbles: Still No Smoking Gun in "The Role of Central Banks in Financial Stability: How Has It Changed?"
Jane Dokko and others - "Monetary Policy and the Housing Bubble", in Economic Policy
Carmen Reinhart - Pride Goes before a Fall: Fed Policy and Asset Markets
Ben Bernanke - "Monetary Policy and the Housing Bubble" - speech on Jan 3 2010

low interest rates do increase the demand for housing

UK housing price boom despite tighter policy
Germany house prices remained flat
Spain had an enormous house price increase
All three of these had the same policy

changes in mortgage rates seemed far too small to account for the magnitude of house price increases

Shiller argues the housing bubble began in '98, before the cut in interest rates

It could be that the psychological optimism of the tech bubble fed house prices

House prices rose sharply after tightening of monetary policy in 2004

Many foreign countries had to acquire dollar assets to serve as reserves; this was after the asian crisis

The strongest correlation is to capital inflows (!)


Q: How do we know the right time to tighten policy?
A: We have a lot of economists + people looking at it

in the '70s they were too slow to tighten policy

bernanke says that the EXPECTATION of low inflation controls people's behavior, which limits what the Fed can do. If there's a "wage-price-spiral" then the Fed can end up w/ less power to change things.

Q: Would you have kept rates low
A: He references his first speech 2002
using interest rates to fight bubbles is like using a sledgehammer to kill a mosquito. Using interest rates to fight the housing bubble would have required a very drastic increase in interest rates. He thinks what should have been done is that the Fed should have been more aggressive on the supervisory/regulatory side. Supervisory/regulatory actions are more like a "laser" tool.

Q: Won't we have the same overconsumption problem w/ low interest rates?
A: Consumer spending is still way below where it was before the ciris, private debt has gone down, the CAD has gone down. He said low interest rates also encourage capital formation.

Q: Couldn't have low interest rates forced banks to take riskier loans to make profits?
A: He doesn't seem to deny it, but says that regulatory/supervisory agencies should have been used to control it.

Q: What were you thinking in the mid-2000s when looking at these graphs (mentions the Big Short!)
A: In 2005 they did a study of what would happen if housing prices went down; they predicted a recession but didn't predict the large extent to which it would affect the financial industry / economy.
[I'm not sure Burry even predicted the hugeness of the effect]

The affected mortgages, affected the soundness of the financial indsutry, which led to a panic.

Q: Did Clinton/Bush home-ownership policies affect the bubble?
A: 

Q: Can too much transparency be bad if you guys get things wrong?
A: 1) transparency is important, 2) transparency can make monetary policy work better b/c the markets 

Q: How do you guys keep inflation so low when pumping so much liquidity into the system?
A: People are used to low inflation, so they're more confident that the Fed will be able to keep inflation low, so inflation expectations are low, which I guess means that inflation can be induced by mass psychological movements.

Carl Icahn

Carmen Reinhart of This Time is Different

Summary: Carmen Reinhart spent a ton of time researching past financial crises in order to write This Time Is Different and A Decade of Debt, and I think she may have been interested in this stuff since the '80s, so she may be one of the most knowledgeable people (if not THE most knowledgeable person) in the world about past financial crises. She whips out references to obscure past crises like it's nothing.

General links
her homepage - http://www.carmenreinhart.com
wikipedia: http://en.wikipedia.org/wiki/Carmen_Reinhart
her page @ the Peterson Institute: http://www.piie.com/staff/author_bio.cfm?author_id=86


Date-Specific Links

1999 - Journal Article: The Twin Crises
http://citeseerx.ist.psu.edu/viewdoc/do ... 1&type=pdf

2009.09 Book: This Time is Different
Here's my page on the book: viewtopic.php?f=4&t=247
The amazon page (the reviews can be educational): http://www.amazon.com/This-Time-Differe ... 0691142165

2010.07 NYT Article
http://www.nytimes.com/2010/07/04/busin ... .html?_r=1

- the article seems to confirm my suspicion that she was the real brains behind This Time Is Different

2010.08.27 Paper: After the Fall
http://www.aei.org/papers/economics/fis ... -the-fall/

2010.11.15 YaleGlobal Interview
http://www.youtube.com/watch?v=QM9v2iD2aU0
- 4:30 she says the leveraging was enabled by capital inflows (eg China buying Treasuries)
- ~13:00 she says that the only reason we didn't see a crash in the dollar vs. other currencies (aka a currency crisis) is that there was a capital flight to the dollar
- @15:30 she's asked about how the repeal of the Glass-Steagal act influenced the current crisis. she says that low capital mobility correlates with fewer banking crises (eg WW2-1980s). so she's saying financial liberalization leads to more crises. doesn't seem relevant to Glass-Steagal itself.

2010.11.18 talk at CATO
http://www.youtube.com/watch?v=oZtQLaP_Zyo

2011.02 Talk at Johns Hopkins
http://www.youtube.com/watch?v=I1NdtFFZPUY
- first 2.5 minutes she's being introduced. summary: she's been researching this stuff for a long, long time.
- next 5 minutes she's explaining a chart that seems to measure global financial crises from 1900-present. Up is bad. Blue line shows the 5 types of financial crises: banking, currency, default (on external and/or domestic debt), & inflation. You can also have stock market crises (added in w/ the red line)
- 7:50 she shows a graph that uses growth in world exports to measure crises (down is bad)

2011.04.09 INET's Bretton Woods Conference (13mins)
http://www.youtube.com/watch?v=Dby3zYF9S8w
- 5:00-7:00 she's saying that monetary policymakers need to constantly monitor private debt/leverage levels to prevent future bubbles.
- 7:00-9:30 she's arguing that faster private deleveraging is better (putting her at odds w/ Ray Dalio). ~7:50 she says that the aggregate book value of mortgages is still higher than aggregate house prices, which she suggests will delay a rebound in the housing construction market. ~8:10 she addresses the example of Japan and says, "yeah it would've been worse in the short term but over the longer term it would be better b/c it wouldn't take multiple decades to get back to normal".
- 10:45 she characterizes financial repression as involving "controlled interest rates, directed credit, and a heavy dose of inflation", later she mentions "capital controls"
- important prediction: the last 4 minutes or so she predicts the odds are "very high" we'll see financial repression like what the western countries did after WW2.

2011.09.09 Presentation on Global Economic Prospects
http://www.youtube.com/watch?v=ixvtF1YZEPQ

2011.09.09 Q&A @ Peterson Institute (24mins)
http://www.youtube.com/watch?v=bxPtj5uePnI
Summary:
Q1: Aren't you (Reinhart) being defeatist? Are you saying we do nothing?
A: I'm not being defeatist, I'm being a realist.
Q2 (~5:30): How does labor growth and an aging population affect things?
A: Reinhart - The aging population means the debt problem is worse than the numbers show. In addition, banks have made a lot of loans that aren't making money and will make the debt problem look even worse once this info becomes public and the banks have to mark their assets to market: "there's a lot of nonperforming bank assets that also, if marked to market, would show another layer of hidden debts" (~10:30).

2011.09.27 Presentation re: A Decade of Debt @ Peterson Institute (45mins)
http://www.youtube.com/watch?v=MkcqBucVgSc
- Good stuff. She seems to be just summarizing the major points you'd learn from reading her book.
- Alan Greenspan was in attendance; this is serious knowledge! It's like getting to see the President briefed by his advisers (even though Greenspan isn't Fed Chairman anymore, it seems plausible that he keeps in touch with Bernanke; if Bernanke is interested in this stuff I doubt he's going to go to the talk himself).

2011.09.27 Q&A re: A Decade of Debt @ Peterson Institute (Alan Greenspan in attendance) (45mins)
http://www.youtube.com/watch?v=miseiAhFipY
- she doesn't think increased interest rates will be an early warning sign b/c she thinks the gov. will do whatever is necessary to keep them low
- she thinks it's guaranteed that we're going to see more financial crises

2012.03.11 Bloomberg Op-Ed - Financial Repression Back to Stay
http://www.bloomberg.com/news/2012-03-1 ... nhart.html
- she says that financial repression is getting worse recently
- she explains what financial repression is and gives examples

1. negative real interest rates - they're a tax on savers
2. "directed lending" to the gov. by "captive" domestic entities like pension funds and banks

Summer 2012 - Public Debt Overhangs: Advanced Economy Episodes Since 1800
http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.26.3.69


Questions for Carmen Reinhart:

- Why not start a hedge fund to make money from your knowledge?

- Did Rogoff contribute much to "This Time Is Different" or was he just there to help it get publicity since he's better known?

- I was at a Bank of America branch and saw them soliciting customers for a no-interest credit card (or something like that). Is there a releveraging going on? How could I tell if there was? What's likely to happen?

Charlie Munger of Berkshire Hathaway

(pronounced "mun'-ger", not "moon'-ger", not "mewn'-ger")

David E. Shaw

• http://archive.fortune.com/magazines/fortune/fortune_archive/1996/02/05/207353/index.htm
  • I thought this was a very interesting article to read, given that I know how the next twenty years played out.

David Einhorn of Greenlight Capital

Wikipedia - David Einhorn
Valuewalk - David Einhorn

2008.06.15 - New York Magazine - The Confidence Man

2009.01.04 - NYTimes Op-Ed - The End of the Financial World as We Know It

2010.11.19 - Interview w/ Consuelo Mack

2012.10.26 - Discussion of Fed Policy at The Economist Buttonwood event
http://www.livestream.com/theeconomist/ ... eeconomist
- ~1:06 he admits he doesn't know much about what happened in 1937

David Rubenstein of the Carlyle Group

• 2016.04.12 - YouTube - Investors Archive - Billionaire David Rubenstein on Private Equity and His Life

George Soros of the Quantum Fund, Soros Fund Management

1994 - Michael Lewis article on Soros: "The Speculator"
http://www.tnr.com/article/politics/the-speculator

2009.10.26 - Financial Times - Soros: General Theory of Reflexivity
http://www.ft.com/cms/s/2/0ca06172-bfe9 ... ab49a.html

2011.11.03 - "Reflexivity at work in the EU", talk at the Central European University
http://www.youtube.com/watch?v=1lI3mdtSeRA
- he's kind of covering basic stuff for the first 15 minutes
- 2nd 15 minutes he's talking about the rise of the EU and why things went badly in '08
- min 28 starts getting interesting. i don't completely understand what he's saying, but he seems to give an explanation of how the euro benefited german competitiveness
- @33 they switch to talking about 


2012.01.25 Remarks @ World Economic Forum [can't really hear what he's saying]
http://www.youtube.com/watch?v=PVhhKluktmk

Jeremy Grantham of GMO (Grantham/Mayo/Otterloo)

http://en.wikipedia.org/wiki/Jeremy_Grantham
http://www.gmo.com/America/default.htm

After reading his Q3 2011 letter he seems like a really nice, down-to-earth guy; he's based in Boston and throws in lines like "Wake up dudes!" The letter was also very well written; Kyle Bass is great to listen to when he's talking face-to-face with someone but his letters are harder to understand. Warren Buffett is famous for writing very easy-to-understand letters, and Buffett says that this is purposely done to make sure Buffett understands the information himself. Grantham seems to be in the Buffett camp in that regard.

Grantham also seems to be famous for being able to predict bubbles, although honestly this is just based on a poster at ZeroHedge.

Janet Tavakoli (CDO expert)

Her book on CDOs was the first book Burry read on CDOs.

http://wallstreetpit.com/author/janet-tavakoli

Jim Chanos of Kynikos Associates

Jim Rogers of the Quantum Fund

http://jimrogers.com/

seems to be a value investor in the vein of buffett and phil fisher (source: interview w/ him). except he makes macro calls about countries (source: new money masters). he gives a ton of interviews.

2010 July interview:
http://www.cfapubs.org/doi/pdf/10.2469/cp.v27.n4.6
- very Phil Fisher: "We...spend as much time as possible talking with the company’s customers, competitors, and suppliers, as well as former employees, board members, and management. When talking with management teams in particular, we want to determine whether they are being truthful with us."
- "I believe that David Dreman’s work provided some of the earliest insights into behavioral finance. More recently, though, we have studied the work of Richard Thaler at the University of Chicago, Michael Mauboussin at Legg Mason, and Tobias Moskowitz, who is also at the University of Chicago."
- When I first started my newsletter, The Patient Investor, I was 24 years old. I often wrote stories about the great investors in Chicago. I would call each of these investors, such as Ralph Wanger of the Acorn Fund, and ask for an interview. I would visit and try to learn everything I could about how, for instance, Wanger had built his company, how
he thought about the market, what his favorite stocks were, and how he was continuing to build his business. It was a conscious effort to build a scuttlebutt network.
- Speece: What is the minimum number of stocks you are willing to hold?
Rogers: For me to sleep well at night, the number cannot be fewer than 30. Anything over 40, however, also does not work for us. It is difficult to generate the necessary passion or conduct in-depth interviews when we hold too many stocks. In fact, too much diversification is merely an excuse for not doing your homework. Therefore, 30 to 40 stocks with generally no more than 10 percent of our holdings in any specific industry is the right fit for us.
- check out Joe Mansueto or Don Phillips from Morningstar

2012/01/23 Interview @ The Motley Fool
http://beta.fool.com/hukgon/2012/01/22/ ... dities-p1/


2012.04.17 interview
http://www.youtube.com/watch?v=N3GbFdk1uxA




Questions for Jim Rogers:

Q: (Question dated 2012.04) In the past few months you've said that you aren't worried about 2012 because there are so many elections this year in the troubled economies of the world (US, EU) that politicians are doing whatever they can to avoid catastrophe. But 2008 was an election year in the US as well, and yet we still saw the collapse of the US stock market and a near-catastrophe in US-controlled financial markets. What makes you think that these politicians will have the power to prevent a disaster if the markets dictate one? Also, what exactly do you mean by "printing money"? Are you referring to the Fed's ability to hint at a QE3 or reduction in interest rates? Why would that be any different in 2012 than in 2013?

Jim Simons of Renaissance Technologies

• 2008.01 - Bloomberg - Code Breaker
• 2008.11.13 - Testimony before Congress
• 2009 - Stony Brook Masters Series - James Simons and C.N. Yang
• 2010 - Talk @ MIT
  • ~11:00 - he mentions he had a job as a stock boy at a garden supply when he was 14 and he was terrible at it b/c he couldn't remember where anything went, but then he was demoted to being a floor sweeper and he loved it because it didn't require any brain work, so he could think about other things. I've had the same experience with my jobs.
  • he knew when he was 14 that he wanted to go to MIT and study math
  • when he was at MIT he would go out with friends and do math at 1am
  • he played a lot of poker at MIT
  • ~27:00 he says he just messed around with investing some dividends and found he was pretty good at it
  • ~27:20 - he says at age 38 he wanted to go into business but didn't think at first that he would be applying math to his business
  • - he lists 4 things that he thinks really helped RT succeed: 1) get really smart people, 2) give them good infrastructure, 3) have an open culture (everyone knows what everyone else is doing), and 4) set people's pay based on how the whole company performs, so everyone is incentivized to help the entire company
  • 44 - He's going to give some guiding principles that have helped him:
  • 44:20 - Do something new; don't run with the pack. If there are a bunch of people all working on the same problem, he knew he'd be less likely to win that race.
  • 44:45 - Collaborate with the best people you possibly can
  • 45:10 - Be guided by beauty - Do things that have aesthetic value. Even trading bonds can be beautiful if you're the first person to do it right.
  • 46:00 - Don't give up
  • 46:15 - Hope for some good luck
  • ~48min someone asks him if high frequency trading is socially useful; he says yes, because the markets are a lot more liquid and there's a lot more volume, so it's easier for people to move and in and out of stocks, eg you can sell 100k shares and not have to worry about moving the market (and thus getting a worse price). He gives as an example the fact that the flash crash was fixed in 10 minutes, while the crash of '87 took 6 months to get back to normal.
  • 52:24 - Q: How did the time you spent doing fundamental trading affect your later models?
  • ~53 he says being in the markets is a good way to get familiar with them, b/c you really pay attention when you have something riding on them. ~53:20 he says he thinks it's a good experience for anyone, even a quant, to do some trading
  • 53:30 - Q: What should the general public be paying attention to? Like the national debt is twice everyone's salary; is that a good way to think about it?
  • He thinks the US gov should be printing even more money and building more infrastructure, even if that means some inflation. Inflation isn't the worst thing in the world.
  • What happened in the '08 crash is that the US got a lot poorer, and it got poorer because the value of everyone's house went down.
  • 58:10 - Q: What are the things that went wrong with the quant models that led to the financial meltdown?
  • HFT quant models had very little to do with the meltdown. The reason for 
  • 1:01:20 - Q: What should you use when making models?
  • A: Use it all!
• 2010.10.20 - Brief Intro for some big shots @ The Financial Crisis and Economic Policy
  • he says he doesn't know much about economics
  • he says he admires Paul Volcker
• 2014.07.08 - NYTimes - A Billionaire Mathematician’s Life of Ferocious Curiosity
  • HN comments: https://news.ycombinator.com/item?id=8004244
• 2014.09.01 - Seoul ICM 2014 - Public Lecture 1 : James H. Simons - My Life in Mathematics
• 2015.09.25 - YouTube - The mathematician who cracked Wall Street | Jim Simons
  • Great info here. The interviewer isn't that great but Simons volunteers a lot of great info.
  • He describes what the early strategies / processes at RenTech were.
• 2015.10.30 - San Francisco State University - James H. Simons: Mathematics, Common Sense and Good Luck
  • This is basically the same talk as the one he gave at MIT.
  • 4:30 - He always liked math growing up.
  • He says he discovered Zeno's paradox at 4.
  • 5:30 - He says he knew he wanted to do something in engineering in math at 8yo.
  • 6:30 - His first job was as a stock boy at a garden supply.
  • 8:00 - He had a great epiphany when he learned Stokes' theorem, he thought that was a really beautiful result.
  • 57:30 - Guiding Principle #1: Don't follow the pack. Think about something that other people aren't thinking about.
  • #2 - Partner with wonderful people.
  • #3 - Be guided by beauty. Ex: a well-run business is a beautiful thing.
  • #4 - Don't give up.
  • #5 - Hope for good luck.
  • 1:01:13 - Q: Do you have any advice about when NOT to do something?
  • 1:02:30 - Q: What are your thoughts on the hedge fund industry? What's right? What's wrong?
  • A: When I started, there were a lot fewer hedge funds.
  • 1:04:30 - Q: Why the focus on the goal-driven collaborative projects?
  • A: It's not the only thing we do.
  • 1:06:30 - Q: When you were a kid, how did your parents help foster your mathematical knowledge?
  • A: They didn't!
  • 1:07:15 - Q: Would you change anything as you look back at your professional life?
  • A: Not really; I don't think I made any huge mistakes.
  • 1:08:10 - Q: At RenTech have you done anything that you'd like to share with the general public.
  • A: [Very interesting answer] There's nothing we do that is so general that the world in general would benefit from it.
  • 1:10:00 - Q: What are your thoughts on math in the US?
  • A: It needs to be better. [He gives a very interesting history of what happened after Sputnik]
  • [He then goes on for about 5 minutes about how his math benefit program got started. He first tried to get Senator Schumer to pay teachers who pass a test, like the National Defense Stipend Whatever, that didn't work]
  • 1:17:50 - Q: What's your opinion of Bourbaki?
  • A: [He explains what the Bourbaki movement was: it was a French movement to codify the math that students should learn.]

Joel Greenblatt of Gotham Capital

His first name is pronounced so that it rhymes with "coal" or "bowl".

Wikipedia:
http://en.wikipedia.org/wiki/Joel_Greenblatt

His books:
You Can Be a Stock Market Genius
The Little Book That Beats the Market

2011/04/14
http://www.gurufocus.com/news/128897/gu ... greenblatt

2011.11.09 great interview with steve forbes
http://www.youtube.com/watch?v=3PShSES5 ... re=related

Julian Robertson of Tiger Management

2009/11/18 - Opalesque.TV Interview
Part 1 - http://www.youtube.com/watch?v=hgbYIA6BIwU
- when evaluating people to seed as hedge fund managers, they test their personality/behaviors/habits. competitive people make better hedge fund managers.
Part 2 - http://www.youtube.com/watch?v=S95xknkd4n4
- "tiger cubs" properly refers to people who went out on their own after working with robertson; "tiger seed" is the right term for people who were seeded by robertson
- if you want to be a successful hedge fund manager you need to be totally honest, intelligent, it's important to be competitive and be able to work as part of a team, and he says a lot of the successful managers have wanted to leave the world a little better than they found it

Ken Fisher of Super Stocks

http://en.wikipedia.org/wiki/Kenneth_Fisher

2009.08.11 How to Smell a Rat: The Five Signs of Financial Fraud
http://www.youtube.com/watch?v=V10CbPoAL9k
Signs of Financial Fraud
1. The combination of 1) holding of the money with 2) the making of investment decisions. Madoff said that what happened to him is that he thought that he could do a deal that would make money, and he took money from the customers' accounts to do the deal, but the deal blew up and he lost some of the money. Then he felt pressure to make the money back, so he tried to do another deal with customers' money, but that blew up as well. Finally he realized he wasn't going to make the money back and so that was the point at which he was forced to remain a "perpetual criminal". Ken says he believes Madoff's story.

Ken Griffin of Citadel

• 2013.05 Speech @ Economic Club of Chicago (ECC)
  • Three most important things [the first 2 are in exact accordance with Felix Dennis' advice]:
    1. Talent
    2. Execution
    3. Taking decisive action
    at 6 he was reading the business section of the paper on the beach
    he loved computers as a teenager
    as a college freshman he read an article in forbes arguing that the stock was due for a correction, he found it persuasive, he bought 2 put options, and then became interested in the fact that the person selling him the options was paying him $50 less than their marked value.
    He spent hours and hours at the HBS campus reading about the pricing of derivatives.
    He came across the strategy of convertible bond arbitrage. He called First Boston for advice.
    6:00 - He didn't see the crash coming, but the portfolio he had built would benefit from periods of volatility. They started the fund just weeks before the crash of '87 (this is looking like a lot of good luck for him)
    7:20 - Advice from Frank Meyer: don't focus on a single trading strategy: focus on creating a platform that attracts the best and brightest people.
    7:40 - "I spent a _lot_ of time focusing on hiring the best and brightest people."
    ~8:00 - Examples of hiring talent: He got people in '98 from a shut-down of a Goldman Sachs fund, he got people when Enron field for bankruptcy (interviewed 16 people)
    9:18 - He paid a company a few million dollars to be able to interview all 600 of their energy trading people
    10:10 - He cites Jim Collins' bus analogy: get the right people on the bus and in the right seats
    ~12:00 - He tells a great story of 
    12:40 - "Things may come to those who wait, but only those things left by those who hustle." - Abraham Lincoln
    
    13-15 - He describes what a great company feels like vs. what a bankrupt company feels like.
    16 - Not seeing the crash of '08 was the biggest mistake he ever made. He describes what it was like.
    17:30 - He describes the hard choices they had to make to get through the 2008 crisis. "The one thing we didn't do was put things off."
    They had lost half their capital.
    18:45 - He gives an Andrew Carnegie: "Take away everything except my people, and in 2-3 years I'll have them all again."
    ~19-24 - He spends a few minutes talking about how great Chicago is, EXCEPT for its political system. He then spends a few minutes talking about how bad the political situation is.
    24 - He talks about a CEO who refused to give money for a pro-business candidate, and then received millions of dollars in tax-breaks. [Side-note: Eh, I'm not inclined to take this from someone who has gotten rich by not sharing money with his employees.]
    til' 27:30 - Telling people they need to fix the system.
    29:30 - Q: What's your response to the claim that hedge fund managers make too much money?
    A: The vast majority of managers' income is a return on their own invested capital. Also, it's an alignment of interest with the pensions we work for.
    30:30 - Q: What's your opinion on the taxation of carried interest?
    A: In our country, our tax code favors long-term investments. I don't understand why one person's long-term investment should be taxed differently than another person's long-term investment. [Seems like a bad answer to me.]
    32:00 - Q: What's your opinion on energy independence and selling oil abroad?
    A: Fracking is a miracle. We _should_ sell this stuff abroad.
    33:10 - Q: What are the implications of "too big to fail".
    A: The great consolidation in the markets since 2008 has led to a lack of competition. The banking system is not a free-market system b/c they're receiving a huge subsidy from the government in the form of the FDIC. We need to break up the banks. The way to do it is to limit the size of the deposit base as a percentage of total national deposits.
    35:40 - Q: Was it a mistake to let Lehman Brothers to fail?
    A: No, because Lehman was a complete catastrophe. It was too far gone to save.
    36:44 - Q: What's HFT?
    A: He explains what it is, and seems to defend the benefits it has brought.
    39:10 - Q: How much time do you dedicate to looking for competitive advantage in new technology?
    A: 
    40:45 - Q: What do you look for in people you hire?
    A: We really seek out passion. That's the one thing we really seek out. Determination and persistance almost always win the day. Just being gifted isn't enough; you've got to be passionate about applying that gift. We receive 25,000 resumes a year.
    We look for people that play well on teams. We look for people who really enjoy getting the details right.
    To win in finance you've got to be _closer_ than everyone else.
    43:50 - Q: What do you do nowadays? Just manage people?
    A: I still an enormous amount of time in the investment process. We spend a lot of time trying to figure out what will move prices, and what we can predict better than other people.
    45:30 - Q: Do you have trouble attracting engineers to Chicago?
    A: Yeah, because this isn't where Google and Facebook are. We're usually competing against people who are also considering jobs at Google and Facebook.
    47 - talent tends to aggregate.
    47:33 - Q: Can you explain what QE3 is? What's your opinion on it?
    A: The Fed is NOT printing money. They're doing "liquidity transformation". They're borrowing money from the banking system to buy longer-dated Treasuries. He thinks QE3 is a bad idea because it's politicizing the Fed, which means that future Fed chairmen will lead us off a cliff.
    Q: 53:10 - With interest rates at a historic low, do you think there's a bond bubble forming?
    A: 
    54:40 - Q: Entitlement problem?
    A: In 10 years we will spend every single dollar in taxes on Medicaid, Medicare, Social Security, and interest on the debt. If we pushed medical costs down to the states we'd see a lot more competition about how to handle these issues.
    57:00 - Q: Do you think IL is in the worst shape w/ pensions?
    A: What's incredible to me is that we're going to value the pensions above all else.
    1:00:00 - Q: What are your political views?
    A: I'm a Republican b/c I haven't seen Dems being willing to make tough choices. He says that the school problem in Chicago is a result of the Dems being captive to the unions.

Louis Bacon of Moore Capital Management

A secretive hedge fund legend prepares to surface
http://finance.fortune.cnn.com/2012/02/ ... e-capital/

Marc Faber of Marc Faber Ltd., Drexel Burnham

Paul Krugman (Economist)

http://en.wikipedia.org/wiki/Paul_Krugman

2007.12.14 - great talk about the then-developing financial crisis; he gives a history starting from the early 2000s
http://www.youtube.com/watch?v=4XhvG_fD0HA
- home buying went up b/c long-term rates went down
- long-term rates went down b/c the Fed reduced short term rates + also b/c foreign countries were buying US dollars via Treasuries
- @14:45 he mentions that there was a housing bubble in southern california in the late '80s that was analogous to what happened to the US as a whole
- @15:50 he says that one reason people didn't see the bubble was b/c they were looking at national averages (of housing prices) rather than regional prices
- @17:30 he's explaining how mortgages changed so that they're now securitized rather than owned by a local lender
- @20:50 Glassman's law: If something can't go on forever but goes on for a while, there will be people coming up with explanations for why it can, in fact, go on forever. [he mentioned this re: how housing prices could keep going up] [Glassman is the co-author of Dow 36,000]
- @22:30 he explains how you could use CDOs to repackage bad loans to make them look good
- @36:50 he talks about how in august of '07 there were fears, but Bernanke cut interest rates and said he was working on things, so the market relaxed, but then things got bad again. This seems like a pattern to keep in mind when predicting the future.
- 37:40 liquidity problem vs. solvency problem: if a rumor spreads that a bank has made a bad loan, and there's no deposit insurance, but the bank didn't actually make a bad loan, the bank faces a liquidity problem. If the bank really made a bad loan and won't get back a lot of money, then it faces a solvency problem.
- starting at 43:50 he talks about whether or not the housing problem will cause a recession. He says "I don't know", but puts the odds at 50-50 of a recession. 15% of something really, really bad
- 45:40 to 49:00 he's talking about precedence for this crash via the last four crises: '87, S&L, '98, and tech bubble. based on those, he predicts the stock market will remain hobbled until it becomes clear where the losses lie, at which point things will gradually return to normal.
- ~52:50 he talks about the field of finance. He says he hasn't seen evidence that the financial engineering that's making financiers rich has been adding value to the economy. He describes most of these rich financiers as people who make money for a while and then blow up (like Taleb says). He thinks finance is mostly about tricking investors into thinking you can make a lot of money for them.
- 53:50 he mentions that a grad classmate of his wrote "A Demon of Our Own Design" about quant stuff on Wall St. He says that the book really does give a sense that finance is all about devising strategies that make money for 2 years and then blow up.
- 55:30 he says the subprime meltdown can also kind of be looked at as similar to the banking crisis of '30-'31, which he says was much more responsible for the great depression than the crash of '29. He says he was reminded the night before of Irving Fisher's term "debt deflation", which is what would be happening with the subprime crisis. He says the panic of 1907 was similar to 1998 b/c it was mainly a crisis of confidence.
- 1:03:25 - he says the problem w/ Argentina in 2002 was that their debt was in dollars but their assets were in pesos, so when the value of the peso collapsed everyone went bankrupt.

Peter Lynch of the Fidelity Magellan Fund

Michael Burry on Peter Lynch's books:
http://www.siliconinvestor.com/readrepl ... ctid=10036

Robert Shiller of Yale

http://www.econ.yale.edu/~shiller/

Robert Shiller is extremely famous on Wall St.

You can watch his "Intro to Financial Markets" Yale course online:
http://oyc.yale.edu/economics/financial-markets/
My thoughts on the course:
- Shiller isn't as entertaining as Ben Polak (whose awesome Game Theory course can also be found online from Yale), but after watching a few of his classes I really started to like him. He seems like a very nice guy who has a genuine intellectual interest in how financial markets work.
- There's nothing advanced or unusual in the class as far as I can remember, but this is an intro to financial markets course and I already knew a lot of the stuff he was saying, so that's not really a fair criticism.
- Shiller was able to get some real Wall St. superstars to give guest lectures to his class: Stephen Schwarzman, David Swenson, and Carl Icahn are all extremely famous in finance.

Sardar Biglari of Biglari Holdings

SiliconInvestor thread on Biglari Holdings:
http://www.siliconinvestor.com/subject. ... ctid=57402

The Securities and Exchange Commission (SEC)

General Stuff

SEC Testimony - http://sec.gov/news/testimony.shtml


Investor Protection is Needed for True Capital Formation
http://www.sec.gov/news/speech/2012/spc ... um=twitter


Availability of Staff Analysis of Market Data Related to Credit Default Swap Transactions
http://www.sec.gov/news/press/2012/2012 ... um=twitter
- this looks like exactly the kind of market-description I was looking for; now my question is, are there things like this for the other markets out there?

re: hiring - Donna M. Quarles has worked there 18 years and was very helpful - 202-551-7452 -QUARLESD@SEC.GOV
- hundreds of people apply for their open positions (~300 for some position that was just filled in NY)
- veterans go straight to the front of the line for the rest of their lives; the selection committee will sometimes(? always?) see nothing but the veterans
- internships are structured similar to on the Hill - the summer internship application period closed in in December
- interns must be students at an accredited school; studying full-time for the CFA doesn't count (she didn't know the reasoning, and said that I would need to talk to the head of recruitment to find out)

The reports issued by the SEC Inspector General are the best way I've seen yet of gaining an inside view of how the SEC operates:
http://www.sec-oig.gov/AuditsInspections/Reports.html


Date-Specific Items:

2012.03.20 - a "What's Been Happening at the SEC" speech by Chairman Schapiro
http://www.sec.gov/news/speech/2012/spch032012mls.htm

Stanley Druckenmiller

http://en.wikipedia.org/wiki/Stanley_Druckenmiller

Stephen Schwarzman of Blackstone

founded Blackstone; he's now worth ~$6 billion

2008 Guest lecture for Robert Shiller's Yale course:
http://www.youtube.com/watch?v=kTN6T9yiIyA
- I found this one of the most interesting guest lectures in the course. It's really pretty amazing the guys that Shiller was able to get to give speeches. Maybe they're hoping that the Yale students will come work for them.

a roundtable at the Harvard Kennedy School:
http://www.youtube.com/watch?v=ktdzSvP0gqQ&t=16m19s

Stevie Cohen of SAC Capital

• Wikipedia - http://en.wikipedia.org/wiki/Steven_A._Cohen
• 2010.03.28 - NY Magazine - Divorced, Never Separated
  • good info on his rise
• 2010.04.25 - How hedge fund manager Steve Cohen averaged 30% returns for 18 years
  • http://www.washingtonpost.com/wp-dyn/co ... 02802.html
• 2010/07 - What’s Eating Steve Cohen?
• SAC Capital’s Cohen Opens Up
• A description of Cohen from the book "Diary of a Hedge Fund Manager"
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Victor Niederhoffer

Wikipedia: http://en.wikipedia.org/wiki/Victor_Niederhoffer
His Junto club: http://www.nycjunto.com/

His book, "The Education of a Speculator":
http://www.amazon.com/The-Education-Spe ... 0471249483

Great article:
http://blogs.wsj.com/financial-adviser/ ... derhoffer/