During my first Winter Break since 2003, I had the chance to read You Can be a Stock Market Genius, by Joel Greenblatt. This book seemed like a logical step after reading The Intelligent Investor, by Benjamin Graham, and Value Investing: From Graham to Buffett and Beyond, by Bruce Greenwald.
Graham, and by extension Greenwald, focus on the analysis of cheap companies, or put another way: They focus on Value Investing. Often, this means analyzing, and potentially purchasing companies with low P/E multiples. To me, Graham and Greenwald’s discussion of value investing is intellectually interesting, but frankly, I find its application practically elusive. It is difficult to discern whether a company is “cheap for a reason”, in which case its stock price is appropriately depressed because of a poor business outlook; or whether, in fact, the company’s shares are underpriced relative to the business outlook, providing a wise investor the chance to buy shares cheaply and ride their appreciation. Separating the bad from the “cheap” is difficult, which is why I was excited to read Greenblatt’s slant on value investing. Greenblatt’s book focuses on special situations, including spin-offs, mergers, bankruptcies, restructurings, rights offerings and recapitalizations. Greenblatt discusses each special situation, and provides an easy-to-read explanation of the practical, psychological, and fundamental reasons why securities are mispriced during a time of dramatic corporate change.
Greenblatt racked up a 50% annual return over the 10-year period from 1985 – 1994. Apparently special situations payoff! Needless to say, Greenblatt’s success is impressive, and I recommend buying his book for anyone who finds the following discussion remotely interesting.
I have tried to summarize Greenblatt’s key ideas by chapter, but admittedly, I rearranged a few points for continuity. This review became much longer than I ever intended, so I hope you have 20 minutes to burn right now…
Chapter 1: Greenblatt rails on the efficient market hypothesis, the academic argument that stock prices properly reflect all public information. Under this argument, stock picking is a worthless practice; no investor can consistently beat the market in the long-term. Greenblatt eschews this topic. So point number one – forget the efficient market hypothesis – we’re going hunting for stocks.
Next, Greenblatt continues his high-level portfolio management discussion by raising a good point about diversification. Greenblatt discusses the delineation between systematic risk, the portion of a stock’s risk related to the movement of the market, and unsystematic risk, the portion of stock’s risk not related to the market movements. Systematic risk “is what it is”; it cannot be diversified away, so Greenblatt makes a simple suggestion: diversify into different assets (e.g. real estate, bonds) or simply leave cash on the sidelines (especially if you need it for near-term purchases, like my tuition!). The good news is that unsystematic risk can be diversified. According to Greenblatt, and statistics, unsystematic risk diversification exhibits diminishing returns. For example, 81% of a portfolio’s unsystematic risk is eliminated with 8 stocks, 93% with 16 stocks, 96% with 32 stocks, and 99% with 500 stocks. Two observations jump out at me. First, to eke out the last 3% of diversification, an investor has to buy an additional 468 stocks – stock picks which I’m sure aren’t as good as the first 32. And second, if you go up to 500, your portfolio starts to look a lot like an index, so why not just buy the S&P 500 Index? I’m guessing these two points are why funds such as Palo Alto Investors take a concentrated portfolio approach, and I’ll also bet these investors would agree with Greenblatt’s quote, “Don’t screw up a perfectly good stock-market strategy by diversifying your way into mediocre returns.”
Chapter one concludes with a note about looking for opportunities on the margins, a concept that’s beginning to sounds like an echo as I listen to advice from Marshall Heinberg, Tom Barrack and Bing Gordon. Here is Greenblatt’s quote on the topic, “If you spend your energies looking for and analyzing situations not closely followed by other informed investors, your chance of finding bargains greatly increases. The trick is locating those opportunities.” And finally, another good quote by Greenblatt on the topic, “Although most people find comfort in crowds, this is not where successful investors generally look for good investment ideas.”
Chapter 2: Greenblatt provides seven basic pieces of advice for intrepid soles looking for stock market opportunities on the margin.
- Do your own homework: If you’re “going where no investor has gone before”, there probably won’t be much Wall Street coverage. From my experience, this mean forgetting about those fancy equity analyst reports and getting cozy with Google and the SEC’s Edgar Database.
- Don’t trust anyone over thirty.
- Don’t trust anyone under thirty: The track record of research analysts at major Wall Street brokerage firms at predicting earnings or stock prices is poor. I’m sure anyone who has used Bloomberg’s earnings estimates can attest to this. Frankly, I just ignore equity analysts’ ratings, but I read their reports as a good jumping-off point to understand the Street “consensus”.
- Pick your spots: Stick to what you know and invest only when you’re confident. Greenblatt mentions Warren Buffett’s point that unlike baseball, “you can swing at only one of twenty pitches,” and “There are no called strikes on Wall Street.” Just be patient.
- Don’t buy more stocks; put money in the bank: To avoid putting all of your eggs in one basket, diversify into different asset classes; don’t simply buy more stocks for the sake of diversification (because your portfolio still has market risk, remember!).
- Look down, not up: In investing, risk defined as the risk of receiving volatile returns. Academics concocted “beta” to measure a stock’s volatility to the returns of the overall stock market. A stock that has declined more over a 12 month period, in percentage terms, according to beta, is more “risky”. However, as Greenblatt points out, simply looking at volatility may not reveal that the decrease in the stock’s price has diminished the downside risk of the investment. This is why Greenblatt suggests ignoring beta and focusing instead on quantifying both the downside and upside of potential of a stock. As Greenblatt points out, focusing on the downside is a practice that was first advocated by Benjamin Graham via his notion of “margin of safety”. Finally, for emphasis, as Greenblatt states “Look down, not up, when making your initial investment decision.”
- There’s more than one road to investment heaven: Whether its Benjamin Graham, with his emphasis on “Mr. Market”, Warren Buffett, with his emphasis on well-managed companies that have a strong franchise, brand, or market niche, or Peter Lynch who advocated investing in companies or industries that you already understand (which is also reminiscent of Marshall Heinberg’s advice) there is something to be learned from each of the greats. Don’t be afraid to mix and match their teachings.
Chapter 3: In chapter 3, Greenblatt finally tackles his first special situation: spin-offs. Greenblatt sells the case for spin-offs with six key points. But before I get there, a few interesting characteristics about spin-offs: they move slowly, so there’s plenty of time to research and profit, SEC Form 10 or a proxy for bigger deals provide all of the juicy details, and the public filings contain pro-forma financial statements which can be used for relative valuation.
Spin-offs, in general, beat the market: Businesses can be “spun off” for various reasons including tax, strategic or regulatory reasons, but regardless of the reason, according to a study cited by Greenblatt and completed at Penn State (Patrick J. Cusatis, James A. Miles, and J. Randall Woolridge, “Restructuring Through Spinoffs,” Journal of Financial Economics 33 (1993)), stocks of spin-off companies outperform their industry peers by 10% per year in their first three years of independence. Moreover, according to Greenblatt, the spin-off process is terribly inefficient; it gives stock of the newly created company, which is often given to parent company shareholders, to institutional investors who do not want it or cannot hold it (because of investment policies). Thus, when the new shareholders receive stock – they immediately dump it – creating downward pricing pressure and an opportunity to purchase shares that have been sold not based on sound investment rationale, but based on psychological or practical reasons.
Another favorable aspect of spin-offs cited by Greenblatt is entrepreneurship. Often, management of a subsidiary newly sprung from its parent will have a more direct rewards system for their actions. Simply put, their business, alone, is a sink or swim proposition. Management’s actions can be even more closely aligned with shareholders if they receive a large equity compensation package. You would work harder if you saw the upside, right? Thus, when analyzing a spin-off, look for stock options or equity packages for the new management — know their incentives. Greenblatt also cites the Penn State study again, noting that spin-offs typically do best during their second year of independence, suggesting that perhaps the entrepreneurial juices take some time to show results to the market.
Finally, the last pro of spin-offs, is management’s admittance of M&A defeat. It’s easy for managers to build an empire through M&A, purporting to be “maximizing shareholder value”, when in fact they may not be. It’s much harder, yet much more shareholder friendly, for management to admit that its prior acquisitions are duds in total, and thus, to enhance shareholder value, divisions will be spun-off. This humble act says a lot about management’s true focus on shareholder value, and signals a return to sanity, according to Greenblatt.
Obviously, don’t invest in all spin-offs – just the good ones – which have the following three characteristics:
- Institutions that receive spin-out shares don’t want the them, and not for investment merit reasons. The shares may be shunned because the spin-off sounds like a “dog” with too much debt or bad assets, so institutions won’t even bother reading the proxy. It might also be the case that institutions dispose of the new securities because the size of spin-off is too small (below the investment policy threshold) or because it’s in a different business than they originally bargained for.
- A characteristic that Greenblatt cites as his most important attribute when analyzing spin-offs, is whether insiders want shares in the spin-off company. Greenblatt likes to see management teams participate, because it aligns their actions with shareholders (because they’re one in the same). In terms of timing, it’s important to learn how and when management sets the “strike price” on its equity incentive. With a little knowledge of option grants, it’s easy to see why, when given the chance, the management team will often try to bend the boundaries to set a low strike price on their options. In this context, that means downplaying the prospects of the company so a low strike can be set. For you, the investor, this means buying shares before management sets the strike; thus taking advantage of their change in tone in subsequent communication with the street (and hopefully a positive change in the stock price). For emphasis, Greenblatt provides a final reminder on insiders: watch their every move, and more importantly, understand their incentives!
- A hidden investment opportunity is revealed through the spin-off, such as a cheap stock, great business, or leveraged risk/reward scenario. Greenblatt’s last point about leveraged risk/reward is a concept that he repeatedly discusses throughout his book – so I’ll tackle it here. Basically, if you’re familiar with the rationale behind LBOs, Greenblatt argues that leveraged firms, while riskier, can actually provide an enhanced LBO-esque return for public investors.
Investing in post-spin-off parent companies can also payoff: After discussing spun-out business, Greenblatt provides a discussion of why parent companies can be good potential investments too, but for various different reasons. First, Greenblatt notes that parent companies which spin-off regulated businesses (e.g. broadcasting) may become takeover targets. Takeovers require a “control premium”, which reads “profit” for investors. Second, through a discussion of the spin-off of Lehman Brothers from American Express in 1994, Greenblatt displays that parent companies, in this case AMEX, can be attractive investments because they are shedding volatile businesses (Lehman) or merely unprofitable ones. To take the unprofitable case a bit further, for display purposes, consider a case where the EPS of business units 1 and 2 total $4, but business unit 3, the spin-off unit, loses $1 per share – creating a consolidated EPS of $3. Thus, by simply spinning out the loser, the parent company’s EPS will increase from $3 to $4. Not bad. Greenblatt concludes his discussion of parent company investment with a point about timing. If institutional buyers are going to purchase the pretty new parent, they do so after the spin-off to avoid receiving the spin-off shares discussed above; so buy parent companies pre spin-off.
Partial spin-offs are similarly fruitful: According to Greenblatt, partial spin-offs, for reasons similar to 100% spin-offs, are also good candidates for shares that have been sold (and prices depressed) for reasons not linked to investment merits. However, beware of partial spin-offs done via an IPO (e.g. McDonald’s spin-out of Chipotle) because unlike traditional spin-outs, these IPOs carry all the hype and willing shareholders of normal IPOs; thus, not much opportunity to buy stuff on the cheap here. The final benefit of a partial spin-out is that, because the parent still owns a percentage of the company, you can begin to assess the value ascribed solely to the parent by subtracting the equity value out of the market cap. For example, EMC’s $56.4B market cap includes its 80% ownership of VMware’s $37.6B market cap, implying that EMC’s equity is worth $56.4B – 80% * $37.6B = $26.3B.
Spin-offs via rights offerings are rare, but if you see one, look closely: Rarely, a rights offering is done to affect a spin-off, a move that allows the new company to raise further capital. Rights offerings can be obscure and confusing, but they provide a key opportunity: There is no need for the parent company management, as fiduciaries, to seek the “highest and best price”, according to Greenblatt. The logic behind this is simple. Unlike a spin-out or sale of the business, existing investors can be treated fairly (even if it’s a bargain purchase) by giving all of them an equal opportunity to buy into the new company via a rights offering. Moreover, according the Greenblatt, a sign of a bargain purchase is an oversubscription privilege, a privilege for participants to purchase additional rights should the entire offering not be purchased. These clauses are often used by insiders to increase their percentage ownership in the spin-out. Again, as Greenblatt discussed earlier, it pays to keep an eye on the insiders.
Chapter 4: Chapter four discusses mergers and acquisitions. Throughout the chapter, Greenblatt discourages the average investor from playing the merger arbitrage game, instead opting for the sport of merger securities.
Merger arbitrage, as Greenblatt notes, is the investment strategy of earning the spread between a company’s current share price and the announced transaction share price associated with a merger or acquisition. For example (from my experience), Oracle announced its intention to acquire Sun Microsystems for $9.50 per share, yet, even after this announcement, Sun’s share price just a month before acquisition close was as low as $8.23. Why? The answer is twofold. First, one must be compensated for the time value of money. If it takes 6 months to close the transaction (i.e. to get paid $9.50) investors need to be compensated for the time value of money while they wait for their payment. Second, there is a risk that the transaction will not close. This risk can stem from regulation (which was the case with Oracle / Sun), key personnel disputes, or a material adverse change (“MAC”). (Sidenote: If you’re unfamiliar with merger agreement MACs, here is an article on the good ol’ MAC clause, a term that came into heavy usage during the financial crisis.)
Greenblatt discourages individual investors from attempting merger arbitrage because today the arena has gotten quite competitive. For example, today Farallon Capital, Ramius and Avenue Capital have teams of merger arbitrage investors, professionals who have access to a hell of a lot more information about closure risk than the average investor. Moreover, Greenblatt encourages investors to think about the risk/reward trade-off. In the case of Oracle / Sun, the reward was the spread between $8.23 and $9.50, or 15%. Yet the risk was that if the EU blocked the merger, Sun’s share price could return to its pre-announce low of $4.50, or 45% lower. It’s just not worth the risk as a small guy.
Merger securities, instead, are where Greenblatt encourages investors to seek opportunities during mergers and acquisitions. Most deals are cash, or cash and stock, but sometimes they are done with a variety of merger securities such as bonds, preferred stock, warrants or rights. According to Greenblatt, these securities are offered as a form of merger consideration because perhaps the acquirer doesn’t want to use more stock (i.e. doesn’t want to dilute its current shareholders further), or maybe it can’t raise more cash. It might even be the case that the acquirer is throwing in the securities as a “sweetener” to clinch the deal. (Sidenote: I’ve seen sweeteners used before, and those investors made out like bandits!) However the merger securities come about, according to Greenblatt, one thing is for certain: no one wants merger securities. Thus, they get dumped, again, for non-investment reasons as investors who wanted cash in the M&A deal will liquidate the security for cash, regardless of investment merits. Hence the buying opportunity, but only buy what you understand.
Chapter 5: When things get bad, turn to chapter five for a discussion of the dark days in a business’s life: Bankruptcy and Restructuring.
Bankruptcy is the first topic that Greenblatt discusses. Greenblatt touches on distressed debt investing, the strategy whereby investors purchase the debt of bankrupt companies for 20 cents on the dollar with the intention of converting it to equity through the bankruptcy process. These investors hope to profit by creating a post-bankruptcy equity value position worth more than their debt investment. Similar to merger arbitrage, this process is complex and competitive – so it’s best left to the pros. Instead, Greenblatt encourages individuals to focus on purchasing the common stock of companies after they emerge from bankruptcy. Greenblatt advocates this approach because at this point in the bankruptcy process two pieces of information become clear. First, all of the uncertainty of the claimholders position in the new capital structure is known. And second, in even more detail than an S-1 filed for an IPO (which is hard to believe!), management must file a statement with the SEC, laying out its best estimate of the company’s future prospects. Moreover, in contrast to IPOs, the shares of companies emerging from bankruptcy are not marketed heavily – no roadshow and no “initiating coverage” analyst research reports – hence the term orphan equities.
Next, Greenblatt points out that bankrupt companies are not typically thought of as “good” companies. He argues that some bankrupt firms are rightfully deemed bad (because their business models are outdated), while others are unjustly shunned. The latter have only gained the bad reputation of a bankrupt firm due to management blunder, not a problem with their underlying business model. Greenblatt cites 5 types of “good” bankrupt companies: 1) over leveraged companies bankrupted from a busted LBO, 2) companies bankrupted by overpaying for a trophy target in an M&A scenario, 3) product liability lawsuits that overwhelm a firm’s financial situation, 4) firms that shed poorly performing businesses in bankruptcy to stake their future on one or two good ones, and 5) low market cap firms which are off the radar of vulture investors. One theme is clear through this advice from Greenblatt, as he states, “Most investors would be best advised to stick to the few companies coming out of bankruptcy that have the attributes of a “good” business – companies with a strong market niche, brand name, franchise, or industry position.”
Finally, Greenblatt notes don’t firms emerging from bankruptcy often don’t have the best long-term prospects. Thus, to avoid getting burned on bankruptcy investing, Greenblatt suggests “trading the bad ones, and investing in the good ones”. In other words, as Greenblatt puts it, “if the company is an average company in a difficult industry and you bought it because a special corporate event created a bargain opportunity, be prepared to sell it once the stock’s attributes become widely known,” or “on the other hand, a company whose prospects and market niche are more favorable can become long-term investments.”
Restructuring is also a fruitful area for value investing, according to Greenblatt. When Greenblatt refers to restructuring, he doesn’t mean scrutinize every accounting line-item titled “restructuring”, he means look for those huge (relative to company size) corporate events that companies undertake to realign their business. Restructurings, via divisions being shut or sold, can reveal hidden value in a firm’s operations. Similar to the discussion of spin-offs above, Greenblatt notes that a shuttered money-losing division can be a drag on EPS, so by simply shutting the division the company’s EPS will increase. Moreover, restructuring can be a sign of management’s focus on shareholder value. Barring distressed situations, selling or shutting a major division is a tough undertaking – a move which shows that the management team is, in fact, focused on maximizing shareholder value. Finally, as a note on timing, the average investor should invest after a restructuring announcement (because investing prior is a lot of hard work, and luck, according to Greenblatt).
Chapter 6: In Chapter 6 Greenblatt touches on more advanced topics, including the tax deductibility of debt and derivatives. He talks about investing in stub stocks (i.e. post-recap common stocks), options and warrants. Greenblatt also notes the higher level of caution that should be employed when investing in such instruments.
Post-recapitalization common stocks, or “stub stocks”, according to Greenblatt, are great because they provide investors with the chance to invest in publicly traded LBOs (not literally, just figuratively). A debt-financed recapitalization, a transaction whereby a company repurchases a large portion of its common stock in exchange for cash raised via debt, allows a firm to utilize the tax advantages of a leverage balance sheet. Put another way, because interest payments on debt are tax deductible, the enhanced value of a firm is the present value of the tax shield. Mathematically, to use an example of a firm with $100M of new debt at 10% and a 40% tax rate, the enhanced value of a leveraged firm is ($100M * 10% * 40%) / 10%. Simplified, this is $100M * 40%, or $40M. So, assuming you don’t over leverage a firm, by simply adding debt, due to tax deductibility, the value of a firm can be increased by $40M. (For the layman, this bit of financial engineering is basically the private equity industry’s business model.)
A leveraged firm, because it’s financed in part by debt, magnifies the return to equity holders. This is achieved because the firm’s earnings are distributed across a smaller equity capital base (because debt is now filling the remainder of the total capital equation). This sounds too good to be true, right? Yes. Investors need to understand that this magnification increases the volatility of stock returns to both the upside (which is great) and the downside (which is risky). This is why performing a downside analysis in situations like this is extremely important.
Long-dated call options, or “LEAPS”, provide investors the right, but not the obligation, to buy a stock at a set “strike price”. Greenblatt likes long-dated calls to speculate on long-term moves in share prices because, according to Greenblatt, “buying calls is like borrowing money to buy stock, but with protection. The price of the call includes your borrowing costs and the cost of your “protection” – so you’re not getting anything for free, but you are leveraging your bet on the future performance of a particular stock. You are also limiting the amount you can lose on the bet to the price of the call.” With long-dated calls, investors can set up favorable risk/reward scenarios. For example, if an option costs $15, but through your own analysis you think there’s a huge special situation catalyst that can increase the stock’s value to $60, an option lets you set up a 1:4 risk/reward scenario. Moreover, to those skeptics wondering why not just purchase stocks on margin if you’re seeking leverage, Greenblatt uses a debt analogy. He cites the fact that options only cost the “interest” of a loan (i.e. the premium). Thus, if a bet goes south, you’re only out the interest expense, not the interest and the principal associated with the loan.
Warrants, instruments similar to options but issued by a company not market participants, according to Greenblatt offer similar investment characteristics. Better yet, unlike long-dated options which can have maximum terms of 2.5 years, warrants often carry terms ranging from five to ten years. Again, similar to long-dated calls, deciding whether to invest in a warrant requires an analysis of the underlier.
Beating the Quants. Greenblatt closes chapter 6 with a discussion of the vulnerabilities of quants, number crunchers who analyze option values via Black-Scholes, not through fundamental analysis. Anyone who knows about Black-Scholes understands that the value of an option is determined by five factors: volatility, the strike price, the price of the underlier, time to maturity and the risk-free rate. Wall Street quants have built powerful computers to crunch these numbers, but in their quest for mathematical nirvana, quants ignore corporate events. Oftentimes, because they base their volatility calculation on historical stock price volatility, these quant jocks misprice options because they don’t take into account significant stock price moves as a result of future corporate actions such as spin-offs, restructurings or mergers.
Chapter 7: Greenblatt recaps the last few chapters with a few words to the wise about portfolio construction and then provides a handful of resources to help readers put his advice into action.
Financial publications are the first source cited by Greenblatt. He lists a lot of financial publications, but here is the handful that I like the best: Wall Street Journal, Barron’s, Investor’s Business Daily and nowadays, I would also add Google News to this list.
Investment newsletters, although expensive for the individual investor, can also be a good source of special situation investment ideas. Greenblatt recommends Outstanding Investor Digest, The Turnaround Letter and the Dick Davis Digest.
Lifting the ideas of top fund managers is also an option for the little guy. Large mutual funds must disclose portfolio positions, so Greenblatt suggest simply calling up top special situation value investing funds and asking for a prospectus which lists all investment positions. Today this can be achieved simply by logging onto a mutual fund’s website (here’s an example of Franklin Mutual Series investments as of 9/30/10). Greenblatt cites the following funds as fertile hunting grounds for ideas: Franklin Mutual Series, Third Avenue Value Fund and Pzena Focused Value Fund (now a part of John Hancock). Once you’ve had a look inside each fund manager’s portfolio, you still have to determine the facts of each special situation. And Greenblatt encourages investors to focus on those special situations that are still close to the fund manager’s average cost to get into the position.
SEC filings, the “nitty gritty”. Next, Greenblatt provides a listing of all of the relevant SEC filings needed for special situation investing. Below is a brief description of each SEC form. All of these filings are easily accessed via the SEC’s EDGAR database.
Form 8K: Per the SEC, “In addition to filing annual reports on Form 10-K and quarterly reports on Form 10-Q, public companies must report certain material corporate events on a more current basis. Form 8-K is the “current report” companies must file with the SEC to announce major events that shareholders should know about.”
Form S1, S3 and S4: These are forms for companies issuing new securities. The S-1 is the most commonly used form for IPOs. S-1s can be very long, but also very useful for gaining a thorough understanding of a company and its industry.
Form 10 Per investopedia, “A filing with the Securities and Exchange Commission (SEC), also known as the Initial General Form for Registration of Securities, required when a public company issues a new class of stock through a spin-off.”
Form 13D: Per the SEC, “when a person or group of persons acquires beneficial ownership of more than 5% of a voting class of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934, they are required to file a Schedule 13D with the SEC.” This is typically the filing that activist shareholders have to file when they cross the 5% threshold with the intent of exerting control over a company.
Form 13G: Similar to Form 13D, this form is filed when the 5% ownership threshold is crossed by an investor. However, unlike the Form13D, Form 13G is filed by investors who do not intend to exert control over the company, instead opting to be a passive investor in the company’s stock.
Schedule 14D-1: The form that must be filed by an entity when launching a tender offer for another company. This form includes information such as the offer price, details and timeline. The company that is subject to the takeover must also file a Form 14D-9. This form provides integration details (assuming acceptance in an M&A setting) and also all of the juicy details surrounding negotiation of the deal. Here’s a good example from the H-P / 3PAR deal.
Schedule 13E-3 and 13E-4: The forms to be filed in a going private transaction (think LBO).
Secondary sources of investment information are the final area of investing information offered up by Greenblatt. Greenblatt recommends Value Line, but I would suggest the newer supertool on Wall Street: Capital IQ (if you can afford it).
Chapter 8: In Greenblatt’s last chapter, he leaves investors with a handful of high-level takeaways, and in my opinion, some great quotes. Below are some of the better quotes from the chapter.
“To be a successful investor over the long term, you must also pretty much enjoy the journey.”… “In fact, if you’re not going to enjoy the “game”, don’t bother: there are far more productive uses of your time.”
“After all, time is the currency of everyone’s life. When it’s spent, the game is over. One of the great benefits of having money is the ability to pursue those great accomplishments that require the gifts of being and time… So, while money can’t buy you happiness or even satisfaction, it might buy you something else. If viewed in the proper light, it can buy you time – the freedom to pursue the things that you enjoy and that give meaning to your life.”