Wednesday, April 15, 2009

Investment Advice from Seth Klarman and Cody Lundin

The Atlantic's Jeffrey Goldberg takes a break from the Israel beat to write an article on investing, "Why I Fired My Broker". Nothing earth-shattering here, but Goldberg takes advantage of the great perk of an established journalist and meets with George Soros's son Robert, Bill Ackman, Seth Klarman, and the survivalist Cody Lundin in the process of writing that article. Goldberg ends up being most impressed with Klarman and Lundin. Of Lundin, Goldberg writes,

Lundin himself eats mice and rats he traps at his off-the-grid passive-solar house in the wilderness, because “why waste free protein?”

Lundin is a freak [...] But in the event that the economy crumbles, and civilization with it, I would appoint him my financial adviser. He is my favorite survivalist, the author of a book on getting by in the wilderness and another on urban preparedness, and a teacher of primitive-living skills.

Goldberg writes that Lundin doesn't wish for disaster:

He says he enjoys electricity and indoor plumbing. He tends to think, though, that civilization is a thin film, and that in times of economic distress, it’s smart to be prepared for the day when Safeway runs out of milk. “This isn’t something I hope for. But what if the illusion does really crumble, and we have to move as a society to something else?”

Goldberg goes from interviewing Lundin in Prescott, Arizona, to having lunch with Seth Klarman in Boston:

When I told Seth Klarman, one of the country’s leading value investors, about my visit with Cody Lundin, he said, “It’s always smart to prepare for disaster. In investing, that means holding disaster insurance. In your personal life, it makes sense to have inexpensive disaster protection, so come what may, you’re ready for any eventuality. I like to store some extra bottled water in the basement, but my wife thinks it’s too much clutter. I told her I’d share my water with her anyway.”

Klarman goes on to advise against the use of leverage, argue that the average investor stands little chance competing with professionals such as himself, note that the average investor really can't trust anyone with his money, and offer a familiar test of temperament to decide if one is an investor. An entertaining read, if nothing else.

The image above, of Cody Lundin, comes from


JK said...

That was an entertaining read, indeed.

I lol'ed at his description of Ackman.

And I think I'd crap myself and call the police if I ever happened to run into that Cody Lundin character while out hiking.

Ralph said...

Someone who knows technological advancements and can review on it soundly may be a good source for finding out how a company is doing on the NASDAQ. Thanks for sharing this.