From $8 a Month to $20 Billion

“Twenty-five years ago, when Zong Qinghou was 42, he made his living selling soft drinks and popsicles to schoolchildren. He says he earned about $8 a month — less than a third of China’s average wage at the time — and was so broke that he once slept in a tunnel under the streets of Beijing rather than spend on a hotel.

“Today, Zong, 67, is still selling soda — and lots of other things — as the wealthiest man in mainland China, Bloomberg Markets magazine reports in its December cover package, “The World’s Richest People.” His net worth of $20.1 billion as of Oct. 5 ranks him No. 30 in the world…”

– Bloomberg, Zong Tops China Billionaires as Communist-to-Capitalist

The responsible trader puts risk control first. That means staying clearheaded in respect to potential outcomes, refusing to “drink the kool-aid” while everyone else chugs it.

Given the need for realism, though, it’s good to temper cynicism with awareness of what’s possible… the potential in what could happen, with hard work, if things really go right.

In that regard, extreme success outliers are not to be envied or copycatted — obviously one needs a lot of fortuitous circumstance (plus the hard work) to do what Zong did.

Instead, fat tail successes serve as a useful reminder that perhaps, just perhaps, outlandish aspirations are not so outlandish… and could even be modest in respect to what’s been done.

After all, if a man in China can go from making $8 a month at age 42, to being worth $20 billion at age 67, who is to say what you or I might achieve? 

Favorite Quotes from “The Big Short”

Here are some of my favorite passages in the book:

On bank stocks’ book value:

He concluded that there was effectively no way for an accountant assigned to audit a giant Wall Street firm to figure out whether it was making money or losing money. They were giant black boxes, whose hidden gears were in constant motion.

Regarding the value added by sell-side analysts:

You can be positive and wrong on the sell side. But if you are negative and wrong, you get fired

On Manipulation of the masses:

How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans

On Recognizing when a credit driven bubble is about to burst: (more…)

My Favorite Quotes from “The Big Short”

 I just finished reading “The Big Short”by Michael Lewis and I definitively recommend it so anyone who is even remotely interested in a career in the investment world.

Here are some of my favorite passages in the book:

On bank stocks’ book value:

He concluded that there was effectively no way for an accountant assigned to audit a giant Wall Street firm to figure out whether it was making money or losing money. They were giant black boxes, whose hidden gears were in constant motion.

Regarding the value added by sell-side analysts:

You can be positive and wrong on the sell side. But if you are negative and wrong, you get fired

On Manipulation of the masses:

How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans

On Recognizing when a credit driven bubble is about to burst: (more…)

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