Kelly criterion and probability, stock will go down after purchase

• Answer: People overweight the most recent information. They overreact to dramatic information, or dramatic circumstances. They tend to have what's called outcome bias, which is they judge things on their outcome, and not on their process.
• Question: What's the Kelly criterion?
  Answer: What it tells you is what fraction of your bank roll you should commit to any particular probabilistic endeavor, if you know the probabilities that pertain to it. And if you know those preconditions, you will either maximize your bankroll at the fastest possible rate, or you'll minimize your loss at the slowest possible rate.
  The rough formula, is:
  2p - 1
  where p is the probability [converted from percentage to decimal form]. So, to make it easy, if you were 100% certain that a particular investment would pay off at your expected rate, then 2 times that p is 2.0, minus 1, yields 1. That means 100% of your bankroll should go into that investment.
  Now if you were only 60% sure, then it would be two times .60, which is 1.20, minus 1, equals .20. So 20% of your bankroll should go into that proposition.
  It also shows that if you have less than a 50/50 proposition, you shouldn't bet at all. Which again, makes perfect sense.
• You have to be confident that you have an edge, And if you can't identify that edge, you probably don't have it. And if you can't identify it, you probably shouldn't commit the capital to it.
• Answer: I would advise them basically to understand, A) people are overconfident, B) that therefore whatever probability you think you have of being right, it's probably less than you think. If you think you have a small edge, you probably don't have any edge at all.
• You know, Bernard Baruch said nobody buys at the bottom and sells at the top except for liars. So what follows from that is, if you're not buying at the bottom and selling at the top, then that stock will go down after you bought it. And it will go up after you sold it.
• Answer: Right. So you need to understand that your stock will go down after you buy it, and it will go up after you sell it. But what you want it to do is go down immediately after you bought it, and be lower then. You don't want it to be lower three years, or five years, or ten years. If you understand this, then the strategy of being willing to lower your average cost [by buying more when a stock drops] is a great strategy.
• Question: I have a theory that great investors are not unemotional, but inversely emotional: They get worried when the market is making most people happy, and they feel good when everyone else is worried about it. Ben Graham had that quality, and so does Warren Buffett. Do you see that in yourself?
• Answer: [veteran trader] Richard Dennis got these 10 people he was going to teach how to trade according to his system. And the system was mechanical. There was no judgment involved. And as it turned out, that after two months of trading, he was the only one of the 10 people that actually followed the system.
• And the reason was, all these behavioral things. Because the system showed you lots of losses. And then it would tend to show you big gains. The losses made people nervous, and so the whole point of the book is that Dennis actually had understood or internalized, that there was a whole plethora of behavioral anomalies that will keep people from behaving optimally in capital markets.
• Can an individual investor do what you've done - beat the market for years ?
  Answer: Oh, sure. I think that individuals [are not hampered by the obstacles] that prevent many professionals from behaving in optimal ways.
  And, more importantly, a thoughtful individual investor doing a moderate amount of homework can easily do better than the S&P 500.
  Because that portfolio which is diversified, is just allowed to evolve. They just let the portfolio evolve over time.

"It's much harder to be the guy, the guy losing money three hundred and sixty-four days out of three hundred and sixty-five,because you start questioning yourself. Am I ever going to make it back? Am I really right? What if it takes ten years? Will I even be sane ten years from now?"

Here is what I bought "The Night of the Generals" for :

• "There's a sort of brotherhood which isn't dependent on the accident of blood relationship and has nothing in common with the herd instinct. I drink to the brotherhood of reasonable men"
• "To train a man in blind obedience is tantamount to fostering stupidity. It has nothing to do with leadership. An attempt to inculcate culture and knowledge, on the other hand, presupposes culture and knowledge on the part of the teacher. Building up an army must be a mental process. If you are training a soldier to preserve peace you must train him to be a human being"
• "A general knows that in war-time he must be prepared to take this hardest of decisions unflinchingly. That being so, he has no choice but to approach his task with profound humility. He must be fully aware of his special relationship to the highest price a human being can pay"

Also thought of "Letters from Iwo Jima" when reading this. Helpless to think of jawans under control of ruthless stupid men. How do these ever become generals? Are we a stupid race overall to allow the worst of men to be our leaders? Why is stupidity and cruelty so pervasive?
Salivating over BAC and C. Why didn't I buy LYO after reading the round table ?! Lost a good opportunity. Another decent one seems KAMN. Went to jazzercise today.

To be happy at home is the desired result of all ambition. - Samuel Johnson.

Hmm, no need for more ambition from me, Iam already happy as a lark at home :) Now if only that WFMI would go up.. that would be perfect!

Inner Game of Tennis quotes

Federer definitely has the Inner Game but Nadal should have won today, he was the better player to watch.

Quotes from the Inner Game of Tennis

• Conscious trying often produces negative results.
• The best players know that their peak performance never comes when they're thinking about it.
• "Getting it together" requires slowing the mind. Quieting the mind means less thinking, calculating, judging,worrying, fearing, trying, regretting or hoping. One should try and increase the frequency of quieting the mind.
• When we unlearn how to be judgemental, it is possible to achieve spontaneous, concentrated play.
• But who said that Iam to be measured by how well I do things? In fact, who said that I should be measured at all? Who indeed? The value of a human being cannot be measured by performance.
• As long as Self 1 (the conscious self- teller) is ignorant of the true capabilties of Self2(doer), he is likely to mistrust it. This causes him to try too hard, self-condemn and be judgemental. Trust yourself instead.
• Relaxation produces smooth strokes and results from accepting your strokes even if they are erratic
• Perhaps a better way to describe a player who is "unconscious" is by saying that his mind is so concentrated, so focused, that it is still.

From this article on non-conformists, fear same for Tulip :

Then there was my daughter, who was dressed in a demure skirt and blouse. A stranger would never have picked her out as a potential rebel; if anything, she has always been determined not to stand out.

My daughter, who, underneath her shy and somewhat diffident exterior, has always harbored the soul of an iconoclast. While I am volubly contrarian, she has always quietly done her own thing. The truth is, I am of mixed minds about having handed on the mantle of dissent to my daughter. I worry that her instinct to think for herself is as much a curse as a blessing — that she will, end up standing warily on the sidelines.

So although I admire my freethinking daughter, I also feel anxious on her account. My hope is that her idiosyncratic take on the world will lead her to unexpected places rather than to an embittered outlook. Here was a girl who eschewed getting smashed and hooking up.Far safer to bet that she’d get with the program in her own laggardly time and unlemminglike way.

Was reading the Dhando Investor by Pabrai. Talks of the business communities in India.

Marwaris : Simply expect all their invested capital to be returned in the form of dividends in no more than three years. They expect that, after having gotten their money back, their principal investment continues to be worth at least what they invested in it. They expect these to be ultra-low risk bets.

If you use this calculation, you'd quickly take a pass on most investments offered to you.

Free cash flow = money that can be removed from the business

John Templeton interview here.

Q: What signs helped you see that the U.S. technology bubble was about to burst back in 2000?
John Templeton: If you want to have a better performance than the crowd, you must do things differently from the crowd. Four years ago the crowd was piling into tech stocks. The prices went sky-high. I sold my clients' technology stocks, and sold a lot of them short. I have put these philosophies into a simple statement: Help people. When people are desperately trying to sell, help them and buy. When people are enthusiastically trying to buy, help them and sell.

Q: That's a good way to look at it.
John Templeton: That's mainly a joke.

From Buffett's 1961 partnership letter

(expect some goose-bumps) :

• I do not present the tabulations with the idea of indicting investment firms. My own record of investing such huge sums with restrictions on the degree of activity I might take in companies, would be no better, if as good.
• The first section consists of generally undervalued securities (general) where we have nothing to say about corporate policies and as to when the undervaluation may correct itself. This has been our largest category, and more money has been made here than in the other categories. We usually have large portions (5% to 10% of our total assets) in each of five or six generals, with smaller positions in another ten or fifteen.
• Sometimes these work out very fast; many times they take years. It is difficult at the time of purchase to know any specific reason why they should appreciate in price. However, because of this lack of glamour, they are available at very cheap prices. A lot of value can be obtained for the price paid. This substantial excess of value creates a comfortable margin of safety in each transaction.
• This individual margin of safety, coupled with a diversity of commitments creates a most attractive package of safety and appreciation potential.
• Over the years our timing of purchases has been considerably better than our timing of sales. We do not go into these with the idea of getting the last nickel, but are usually content selling out at some intermediate level between our purchase price and what we regard as fair value.
• The generals tend to behave market-wise very much in sympathy with the Dow.
• Just because something is cheap does not mean it is not going to go down.
• With abrupt downward movements in the market, this segment may very well down percentage-wise just as much as the Dow, and during sharply advancing years like 1961, this is the section of our portfolio that turns in the best results. It is, of course, also the most vulnerable in a declining market.
• Out second category consists of “work-outs.” These are securities whose financial results depend on corporate action rather than supply and demand factors created by buyers and sellers of securities. In other words, they are securities with a timetable where we can predict, when we will get how much. Corporate events such as mergers, liquidations, reorganizations, spin-offs, lead to work-outs.
• This category will produce reasonably stable earnings, a large extent irrespective of the Dow. Work-outs have produced our second largest category. At any given time, we may be in ten to fifteen of these; some just beginning and others in the late stage of their development.
• I believe in using borrowed money to offset a portion of our work-out portfolio since there is a high degree of safety in this category in terms of both even results and intermediate market behavior. Results, usually fall in the 10% to 20% range.
• My self-imposed limit regarding borrowing is 25% of partnership net worth.
• Final category is “control” situations where we control the company. Such operations should definitely be measured on the basis of several years.
• Conscious, of inflation, many people now feel that they are behaving in a conservative manner by buying blue chips although regardless of price-earnings ratios, dividend yield, etc. I feel this course of action is fraught with danger.
• There is nothing at all conservative about speculating to just how high a multiplier a greedy and capricious public will put on earnings.
• You will be right, over the course of many transactions, if your hypothesis is correct, your facts are correct, and your reasoning is correct.
• True conservatism is only possible through knowledge and reason.
• I feel the most objective test as to just how conservative our manner of investing is arises through evaluation of performance in down markets. Preferably these should involve a substantial decline the Dow.
• We have never suffered a realized loss of more than ½ of 1% of total net assets, and our ratio of total dollars of realized gains to total realized losses is something like 100 to 1.
• Of course, this reflects the fact that on balance we have been operating in an up market. However, there have been many opportunities for loss transactions even in markets such as these so I think the above facts have some significance.
• Our job is to pile up yearly advantages over the performance of the Dow without worrying too much about whether the absolute results in a gibes year are a plus or a minus.
• I would consider a year in which we were down 15% and the Dow declined 25% to be much superior to a year when both the partnership and the Dow advanced 20%.
• For the reasons outlined in my method of operation, our best years relative to the Dow are likely to be in declining or static markets.
• My father is sharing office space with us (he also shares the expenses) and doing a brokerage business in securities. I expect our overhead, excluding interest on borrowings and Nebraska Intangibles Tax, to run less than .5 of 1% of net assets.
• We have over 90 partners and probably 40 or so securities.
• We presently have partners residing in locations from California to Vermont, and net assets at the beginning of 1962 amounted to $1,178,500.00. Susie and I have an interest in the partnership amounting to $1,025,000.00.

From Seth klarmans margin of safety

From Seth Klarman's book.

• "Being a value investor can be a lonely undertaking. A value investor may experience poor, even horrendous, performance compared with that of other investors during prolonged periods of market overvaluation. "
• "For a value investor a pitch must not only be in the strike zone, it must be in his sweet spot. Above all, investors must always avoid swinging at bad pitches"
• Remember the reason you bought the investment, and if that no longer holds true, then sell the investment.
• "The trick of successful investors is to sell when they want to, not when they have to."
• "Maintaining moderate cash balances or owning securities that periodically throw off appreciable cash is likely to reduce the number of foregone opportunities."
• a. A bottoms up approach, searching via fundamental analysis.
• NPV and IRR are great tools for summarizing data. NPV is the discounted value of all future cash flows that the business is expected to generate. Use this when earnings are predictable and a discount rate can be chosen. When interest rates are unusually low, could cause inflated share prices.
• Analyze liquidation value. Understand what would be an orderly liquidation versus fire sale liquidation. Net working capital = Current Assets – Current Liabilities. Net working capital = Net Working Capital – all long-term liabilities. Operating losses deplete working capital. Look at off balance sheet liabilities, such as under-funded pension plans.
• "working capital / sales ratio" is worthwhile. Discount rates of 12% for first 5 years followed by 15%. These higher rates indicate "uncertainty". Also see insider purchasing.
• Book value is not very useful as a valuation yardstick.
• If you see a company selling inexpensively, ask , "What is wrong with this company?" Like Charles Munger, who advises investors to "invert, always invert. Bargains should be inspected and re-inspected for possible flaws."
• He cited that institutions frowned upon arbitrage plays, and certain companies within an industry were punished without merit. Many institutions cannot hold low-priced securities, and that in itself can create opportunity. He also cites year-end tax selling, which creates opportunities for value investors.
• "Some information is always elusive," hence need to live with incomplete information. Knowing all facts does not always lead to profit. The first 80% of the research is gathered in the first 20% of the time spent finding that research."
• "High uncertainty accompanied by low prices. By the time uncertainty resolved, prices rise." Make decisions quicker, without all of the information, and take advantage of the time others are delving into the same information. The extra time can cause the late and thorough investor to lose their margin of safety.
• "Investment research reducing large piles of information to manageable ones, distilling the investment wheat from the chaff. A lot of chaff and very little wheat.
• Bankrupt Companies Look for Net Operating Losses as a potential benefit. Beauty of investing in bankrupt companies is the complexity of the analysis. This complexity leads to potential opportunity, as many investors shy away from the complex analysis. He cites the example of expensing rather than capitalizing certain expenses.
• Look at off-balance sheet arrangements. (e.g. real estate and over-funded pension plans)
• "As a rule investors should avoid the common stock of bankrupt entities at virtually any price; the risks are great and the returns are very uncertain."
• "All investors must come to terms with relentless continuity of the investment process."

Interesting, Fred Schwed seemed to be fascinated by options back in 1930 :

In defense of the Pure Gamble : Perversely enough, it is the use of options as sheer speculation that exercises a malign fascination on this writer. I do not know of anyone else who has a good word to say about this form of gamble. It would however be monstrous to leave an impressionable reader with the idea that the buying of options is a reliable way to make money. Bu the practice has such few spokesmen that I have taken it on myself to suggest that is has at least as much to recommend it as more approved speculative methods. But before buying the option, at least mull over for a little while the fact that there exists a group of gentlemen who seem to be willing to wager that this stock is not going up in the next 30 days after all.

Most of the great speculators either ended their days in penury or cam sickeningly close to it one or more times. An interesting exception was Hetty Green, but Mrs Green was both a realist and a woman, few great speculators are either.

Statisticians of a nervous, sensitive sort, after a few experiences develop a prose style which would make a German nineteenth century meta physician envious.. Quote from WSJ... If the thoughtful reader will now read that statement backwards, he will discover that its original lucidity is not impaired.
When there is a boom and everyone is scrambling to buy, take everything and sell. Invest the proceeds into conservative bonds. No doubt what you sold will go much higher, but pay no attention to this - just wait for the depression which will come sooner or later. When this depression becomes a national catastrophe, sell your bonds and buy back stock. No doubt the stocks will go lower, again pay no attention. Repeat.

Currently reading "Where are the customer's yachts?", a hilarious book by the wonderfully funny Fred Schwed Jr, a one time laid-back wall street trader who preferred to play golf instead of buzzing about keeping busy for its own sake. I don't remember when I have laughed so hard reading a book. T was quite amused to see me rolling senselessly on the floor.

Charles Munger Wonderful USC commencement speech

USC law school commencement sppech by Charles Munger

• The safest way to get what you want is to deserve what you want.
• I know looking at the people sitting behind the graduates (parents), are the people who really deserve the credit for these graduates today.
• There is no love so right as admiration based love.
• Since 5% of the big ideas in each discipline carry 95% of the freight, it wasn't difficult to pick up a lot of the big ideas in different disciplines. One has to practice the multi-disciplinary approach. I have followed it all my life and it has made my life more fun, more constructive and let me help others, and made me enormously rich. But there are dangers in it and one is that you will sit in front on an expert and you will know a lot more than him, you may cause a lot of offense, I never found a perfect way to counter that and say things without causing offense.
• I knew this young graduate of Harvard Law School and he was a brilliant lawyer, all set to conquer the world and his supervisor called him once and told him "Your duty under any circumstance is to make the client think that he is the smartest person in the room, and if you have any energy or spark left after this, then use it to make your senior partner look like the smartest guy in the room. And only after you have finished these two obligations do you want your light to shine at all." Well, that may be very good advice for rising in a large firm, but it wasn't what I did, I always followed the drift of my own nature and if other people didn't like it, well I didn't need to be adored by everybody.
• Be multi-disciplinary and really understand what you study instead of just spitting it out on the paper, if you incorporate your learning into your mental latticework of thinking then one day you will wake up and it will hit you that you are one of the most confident people in your age cohort, if you don't, then you will never feel confident.
• Many tough problems become easier if you invert. If you want to help India, turn around and ask what you can do not to help India.
• Avoid sloth and unreliability and extreme ideology because it turns your mind into cabbage. For instance preachers on TV, they have a lot of ideas on theology and a lot of their minds are made of cabbage.
• Self pity is very close to paranoia. You do not want to drift into that. Self-pity is not going to improve the situation, and when you avoid it, you'll be better off than practically everyone else.
• Get out of self-serving bias. The world does not revolve around you. A terribly inaccurate way to live. You also want to allow for self-serving bias of others.
• You really want to avoid working under someone you don't admire and don't particularly like. This takes a lot of talent and can be tricky but what I did was that I found people that I did admire and without criticizing anyone, I maneuvered myself to work under them. The outcome will be more satisfaction in life if you work under someone you admire, the alternative is not such a good idea.
• Maximize objectivity. Pay attention to dis-confirming evidence and also checklist routines. Checklist routines avoid a lot of errors.
• Also realized very early that non-legality would work very well in the parts of the world that I wanted to inhabit.
• I often tell the story of Plank and chauffeur. Chauffeur heard Planck's speech so often, one day he requested Planck to let him give the speech and he did. However, someone got up and asked some question and the chauffeur said "That is so elementary, I will let my chauffeur answer that", tossing the question back to Planck.
• In this word there are two kinds of knowledge. First there is the Planck kind of knowledge, people who've really paid their dues and have good understanding and then you have the chauffeur knowledge, who've just learned to prattle the talk and they make hell of an impression, but in the end they just have chauffeur knowledge. I think I've just described practically every politician in the United States. And your task should be to make sure that the control falls into the people with the Planck knowledge and away from the chauffeurs.
• Another thing is intense interest in a subject is indispensable if you are going to excel in a subject.I could force myself to be good in a lot of things. But I couldn't be really good in something unless I had an intense interest, so to some extent you're going to have to follow, ie. if at all possible you want to drift into something in which you have a natural interest. You will be good only if you're really interested in something.
• You also should try and maintain a lot of assiduity. Which means you have to sit on your ass and do it till you succeed. I had very good partners, partly because I deserved them, partly because I picked wisely and some luck. The only commitment we made was that when we were behind on some commitment, we pledged that we would work 14 hours a day both of us till we got the commitment honored. Needless to say, that partnership was very successful.
• Life will have horrible blows, unfair blows. Some people recover and some don't. Every mischance in life is an opportunity to behave well, to learn something, the duty here is not to indulge in self-pity. Famous epitaph : "Here lies Epictetus, a slave, maimed in body, of absolute poverty and favored by the gods."
• All my life I've gone through life anticipating trouble.
• Last thing I want to say to you as you go into the world to practice a profession that puts a lot of procedure , a lot of precautions and a lot of mumbo-jumbo into what it does, is that this is not the highest form that a civilization can reach. The highest form that civilization can reach is a seamless web of deserved trust. No precautions just wholly reliable people trusting each other to do the right thing.
• From Pilgrim's progress: My sword I leave to who can wear it.

Links on Wesco's annual meeting :
Munger Speaks on Berkshire's Success
Notes for Wesco Financial Annual Meeting

Quotes from these :

• Best way to gain wisdom was by "sitting on your (behind) and reading all day."
• It's hard to think of committees that have been successful.
• There is no substitute for a very intense interest.

Also speaks of maximization of objectivity. Had a related discussion on Friday evening with JS. Think that India's most significant hurdle may be getting over patriarchal or feudal mindset towards more objectivity.

Berkshire's 2007 annual meeting links here. From these :

• On Planned Parenthood : Buffett said he believes it is terrific. Says women have had bearing babies forced upon them for years. Men set the rules for years, and he thinks it wonderful that women can make reproductive choices. He said, "I hope you'll respect my opinion as I respect yours."
• On the Dow @13000 : Better get used to these big numbers, to get a 5% return, the Dow will have to be at a million by the end of this century.
• Warren Buffett's only tax advisor is George W. Bush. His annual tax rate last year was 20%. In comparison, he said his employees with income's of US$50k+, pay close to 37%. Forbes 400 richest Americans pay a lower tax rate than their receptionists.
• Still sticks with the 50% return claim for upto $10 million.
• "Read everything you can. By the time I was 10, I read every book in the library that had to do with investing, and many I read twice. You just have to fill up your mind with competing thoughts and then sort them out as to what makes sense over time. And once you've done that, you ought to jump in the water. The earlier you start the better in terms of reading. What I'm doing today at 76 is running things in the same thought pattern that I got from a book at 19. Read, and then on small scale do some of it yourself."
• Will 1973-74 opportunities happen again?When I closed my partnership, the prospective returns going forward I felt was the same as municipal bonds. Don't think that it is the same situation now. If I managed endowment funds, it would be 100% in stocks or long bonds or short bonds, no mix. If I have 20 years and a choice between index funds and 20 year bonds, I would rather buy stocks today.
• Silver : I bought too early, sold too early, and other than that it was a perfect trade.
• What advice do you have for people giving money 40 years from now? As long as you plan to give it back, there is nothing wrong with your time horizon. If you're compounding money at a rate greater than people generally do, you are an endowment for society. Endowments do that to get average returns. You can let someone else take care of the giving now.
• We were talking about an oil company where we read the report and couldn't find the exploration costs in the report. To the extent that it was touched on, was in a dishonest manner. It makes a difference. Annual reports tell you a lot about the honesty of the individual.
• If I were writing something now, I would say if I had to own long bonds or equities, I'd rather have equities, but I would not have high expectations, but above 4.75%

CM mentions Marcus Aurelius here, (a full transcript of the Q&A)

"What one does easily, one does well." -Andrew Carnegie

Just heard the very cool Vint Cerf speak on the future of the Internet. Am I glad to be in engineering :) Felt energized and quite excited again. Was reminded of naive excitement back in school. A cool quote by him was "Power corrupts, and powerpoint corrupts absolutely. So much effort goes into looking right, the content becomes secondary". Apparently, they have interplanetary protocols running now.

Also, ran into L in the parking lot, inspired me to think of switching jobs. I wasn't alone to think there is something wrong in current setup. He echoed a lot of concerns that have been having, received an invite to discuss further anytime.

NYSE short interest ratio is 7.4 apparently. Range is 3.5-7.5. Accordingly, the market rallies on relentlessly. Saw obscene upticks in CMG and MA. ($9 and $14+), both stocks I have owned previously and sold due to valuation considerations ;) Don't have any ideas so still 40% in cash. Iam wondering who these people are, the ones buying so much. Maybe it is smart money after all. Apparently, the last time the Dow declined in 2 of 21 trading days was in 1929.
Of course, I may be just feeling left out ;)

From James Stewart in SmartMoney :

Repeat after me : Markets do not go straight up. I've had to remind people of this in recent years with respect to real estate, oil, and now stocks. The average rally since 1979 has been 50%. But I never buy stocks when the market hits a new all-time high. I don't even like to buy on a day when the market rises. I like to buy into rampant pessimism. I've had to get a very firm grip and remind myself that there will be another correction, or at least a significant buying opportunity, as there was as recently as February. Patience is an underrated virtue in investing. Like most good things, this rally won't last forever.

Found this quote today. Written nicely hence quoted below, did always suspect puritanical strain in self, think that clear logic must be so.

"The notion that a panic should be allowed to pursue its course is perhaps of two strains. One strain takes a certain amount of pleasure, or Schadenfreude, in the trouble visited upon the market, as retribution for excesses of the past; this somewhat puritanical or fundamentalist standpoint rather welcomes hellfire as just dessert. The other sees panic as a thunderstorm, cleaning the air. It purifies the commercial and financial elements, and tends to restore vitality and health, alike conducive to regular trade, sound progress and permanent prosperity." -Charles Kindleberger

A Review of Buffet's Partnership Letters here.

From it :
There is some ambiguity in the statements he makes now and the way that he ran his business back then. He talks about how he never used margin but he actually did. Sometimes he would borrow up to 25%. He also berates fund managers for the fees they charge but his funds charged 25% of anything over 6%. He also had other fee schedules that would charge 1/3 of all profits (with no bogey). These high fees are where he made his original wealth that would allow him to be the largest shareholder of his current company and one of the wealthiest people in the world.

Something off-topic: Read this about the Gnostic Gospels yesterday :

According to the Nag Hammadi Gnostic Gospels, Jesus was just a roving, wise man who preached a life of possession-less wandering and of whole-hearted acceptance of fellow human beings. He preached that self-knowledge is the knowledge of God; the self and the divine are one and the same. The message conveyed was that to know oneself, at the deepest level, was also to know God-that is , by looking within oneself to find the sources of joy, sorrow, love and hate, one would find God.

Hmm, sounds more plausible than immaculate conception etc.. Sign me up.