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January 6, 2009

According to an article in the WSJ on 1/6/09, Adolf Merckle one of Germany’s wealthiest men, committed suicide. At one point his wealth was estimated at over $9 billion.

It seems that the recent Volkswagen short squeeze hit him hard (see “Volkswagen…The Biggest Company in the World?”- 11/5/08). Prior to his large losses on his short position, Merckle “also overstretched himself in recent years with highly leveraged acquisitions”.

The lesson to me is clear: using leverage is a very dangerous thing. If your right, at best you end up with a larger net worth. But if your wrong…the downside just isn’t worth it.

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December 11, 2008
Hockey legend Wayne Gretzky, “The Great One”, said “a good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

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December 3, 2008
If I offered you the chance to buy “Water Lily Pond,” the masterpiece painting of French Impressionist Claude Monet, for $10 million, is it a great deal? Or am I ripping you off?

November 20, 2008
The tables have turned and now the retail investor has the upper hand. The reason is simple: institutions and hedge funds have become forced sellers; selling not because they want to but because they have to…and here’s why.

November 11, 2008
Far too many investors fall into the trap of divorcing the price of a stock from the underlying fundamentals of the business…and they pay a dear price for it.

November 5, 2008
Last week the stock market proved beyond a shadow of a doubt that it grossly misprices companies …