Join 📚 Roger's Highlights
A batch of the best highlights from what roger's read, .
You won’t always find something better when you’re forced to quit, but sometimes you will. The problem is that most of us never discover those other opportunities because we can’t see what we’re not even looking for. The lesson here is that we shouldn’t wait to be forced to find a Plan B. We should always be doing some exploration, especially because sometimes Plan B can turn out to be better than the thing you’re already pursuing.
A good example is our trade in Fiat in 2003. We made 20 percent in a month on that single transaction. At the time, the broad market was rallying sharply in a rebound from the preceding bear market. Fiat had a big rights issue.5 At the same time, Deutsche Bank had announced that they would be disposing of their industrial holdings, and Fiat was one of their positions. Rather than exercise their rights, which would increase their position, Deutsche Bank decided to sell their rights. You had a situation where the market was going up, and while Fiat should have been going the same way, it was actually going down because of a big seller. And that seller was not driven by fundamentals, but rather by a desire to rebalance their portfolio to reduce industrial holdings. The rights were especially cheap because of the Deutsche Bank selling. We bought the rights, which effectively gave us a cheap call. Buying the Fiat rights was a trade where everything lined up. First, the market was very strong. Second, the stock was substantially underperforming the market and its sector for two technical reasons—there was a rights issue and a large seller for technical reasons that had nothing to do with the fundamentals. Third, the rights provided you with a way to put on a large position for a small capital outlay. Fourth, because Deutsche Bank was a large seller of rights and the stock was difficult to borrow, the rights were trading below their intrinsic value.
Hedge Fund Market Wizards
Jack D. Schwager
DS: How has teaching helped you as a writer? GS: I just like being around our students. There’s something very heartening about teaching, in a “There’s nothing new under the sun” way: You realize that there have always been, and will always be, young artistic people in the world who, being relatively new to the world, are freshly amazed by its beauty. And it’s so nice to be around that energy. Our students are incredibly smart and talented—this year we got 566 applications at Syracuse, for six spots. They love fiction and are charged-up about it and hopeful for its future, and their enthusiasm rubs off on me. It also helps my writing in a more direct way, I think. There’s something wonderful about spending a day taking apart a Tolstoy story to see how it works, and then getting up the next morning, feeling like: Okay, I’m still alive, still writing, still part of this lineage—and therefore there’s still a chance that, one day, I’ll do something good. That feeling comes directly out of the fresh immersion in a great work that one constantly gets when teaching.
Tenth of December
George Saunders
...catch up on these, and many more highlights
Readwise