Chrystia Freeland, Financial Times US managing editor, interviewed Dick Syron of Freddie Mac, in this segment discussing the portfolio cap, jumbo mortgages and government regulation.
Sunday, September 30, 2007
Transcript: Interview with Carlos Slim
FT: And why don’t you get a bigger house?
MR SLIM: What for? So that you can get lost in it? No, in my house I live with my children. It’s a sociable space – one for sharing and meeting people in.
I don’t have any property outside Mexico. I don’t have a checking account, either. Nothing of that sort because it is just a hassle...
Trading the Odds with Arbitrage
"I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought." Many of you might recognize these words spoken by Gordon Gekko in the movie Wall Street. In the movie, Gekko makes a fortune as a pioneer of arbitrage . Unfortunately, such risk-free trading is not available to everyone; however, there are several other forms of arbitrage that can be used to enhance the odds of executing a successful trade. Here we look at the concept of arbitrage, how market makers utilize "true arbitrage," and, finally, how retail investors can take advantage of arbitrage opportunities.
The Perils of Financial Historicism
Every financial crisis is inherently unknowable – before it occurs, and as it occurs. By contrast, we understand past crises very well. Accountants go over the books, the participants tell their tales to the newspapers (or sometimes before a judge), politicians explain why they are sorting out a mess, and in the end historians put together a story.
Because the past is knowable, the best way of understanding a current crisis is to search for a model in past experiences, even those that are long past. But which is the right template?
Because the past is knowable, the best way of understanding a current crisis is to search for a model in past experiences, even those that are long past. But which is the right template?
Bubble Trouble
The future of the housing boom, and the possible financial repercussions of a substantial price decline in coming years, is a matter of mounting concern among governments around the world. I learned this first-hand while attending this year’s Jackson Hole Symposium in the remote wilderness of Wyoming, where, ironically, there are almost no homes to buy. The howls of coyotes and bugling of elk rang out at night. But, by day, everyone was talking about real estate.
Tuesday, September 25, 2007
Warren Buffett: How He Does It
Did you know that a $10,000 investment in Berkshire Hathaway in 1965, the year Warren Buffett took control of it, would grow to be worth nearly $30 million by 2005? By comparison, $10,000 in the S&P 500 would have grown to only about $500,000. Whether you like him or not, Buffett's investment strategy is arguably the most successful ever. With a sustained compound return this high for this long, it's no wonder Buffett's legend has swelled to mythical proportions. But how the heck did he do it? In this article, we'll introduce you to some of the most important tenets of Buffett's investment philosophy.
Interview with David Dreman
We're talking about bubbles and how to protect yourself as we land in these bubbles. David, one of them is in the subprime mortgage market which we're starting to see unfold now. You think it's got a lot longer to go. How much longer and how severe do you think it's going to get?
DAVID DREMAN: I think it has a fair amount to go because there's just a lot of mortgages that have to unwind. Sometimes it takes as much as three years to unwind. Unfortunately, sometimes some of the mortgages are like wines, you go buy the vintage. The 2005, 2006's are not good vintages.
DAVID DREMAN: I think it has a fair amount to go because there's just a lot of mortgages that have to unwind. Sometimes it takes as much as three years to unwind. Unfortunately, sometimes some of the mortgages are like wines, you go buy the vintage. The 2005, 2006's are not good vintages.
Monday, September 24, 2007
Kahneman: Master of the imperfect mind
Daniel Kahneman won a Nobel for explaining why people habitually make the wrong moves when investing or spending their money. Who better to tell you how to do it right?
It isn't often that a psychologist helps explain personal finance, but Daniel Kahneman isn't an ordinary psychologist. In 2002 he won a Nobel Prize in economics for his research into how people confront uncertainty.
Raised in France and Israel and formerly a professor at the Hebrew University of Jerusalem, UC-Berkeley and Princeton, Kahneman has spent half a century studying how the human mind works - or fails to.
It isn't often that a psychologist helps explain personal finance, but Daniel Kahneman isn't an ordinary psychologist. In 2002 he won a Nobel Prize in economics for his research into how people confront uncertainty.
Raised in France and Israel and formerly a professor at the Hebrew University of Jerusalem, UC-Berkeley and Princeton, Kahneman has spent half a century studying how the human mind works - or fails to.
Disclosure: thanks to David for the original reference
Are we headed for an epic bear market?
Satyajit Das is laughing. It appears I have said something very funny, but I have no idea what it was. My only clue is that the laugh sounds somewhat pitying.
One of the world's leading experts on credit derivatives, Das is the author of a 4,200-page reference work on the subject, among a half-dozen other tomes. As a developer and marketer of the exotic instruments himself over the past 30 years. He seemed like the ideal industry insider to help us get to the bottom of the recent debt crunch -- and I expected him to defend and explain the practice.
Wednesday, September 19, 2007
Warren Buffett to CNBC: "I Don't Care" If the Fed Cuts Rates
Becky Quick: We have to ask you about the news of the day and the market. Everyone waiting to see what the Federal Reserve will do today. Do you think the Fed will cut 25 or 50 basis points today?
Warren Buffett: (Laughs strongly.) I represent a different view, maybe, than your other viewers. I don't think it makes any difference whatsoever to an investor in stocks what they do today. I don't care, I wouldn't care whether they raise the rate in terms of what I would do in stocks. If I knew exactly what they were going to do, I would not change a buy or a sell order that I have in.
Warren Buffett: (Laughs strongly.) I represent a different view, maybe, than your other viewers. I don't think it makes any difference whatsoever to an investor in stocks what they do today. I don't care, I wouldn't care whether they raise the rate in terms of what I would do in stocks. If I knew exactly what they were going to do, I would not change a buy or a sell order that I have in.
Monday, September 17, 2007
Less pain, more gain really
THE WISDOM OF ABEY
1. Money alone will not make you happy. Living an "authentic life" will. People have more money today than 50 years ago, yet are no more happy.
2. Have a financial plan for you, not your money. Those with a financial plan report greater satisfaction with life than those who do not.
3. Your plan should be based on your goals, not goals someone else says you should have. Those selling dreams are probably trying to sell you something else.
4. Understand "The Prize". Over the long term, cash makes a real return of 0%-1%, bonds 1%-3%, property (without leverage) 3%-5% and shares 5%-8%.
5. Understand the "enemy within". You are wired to make bad investment decisions, and your financial plan needs to defeat that.
6. Beware false accounting. An investment you bought for $100 five years ago, and sold for $150 yesterday, but cost you $4 to buy, $10 in finance interest costs, and $11 to maintain and insure, made a 25%, not a 50% return.
7. Drip-feed money into the markets so you do not worry about short-term ups and downs. You'll be buying in both.
8. Do not attempt to chase fads, or time the market. You will fail, unless you are lucky. Very few people are consistently lucky.
9. Do not watch your investments constantly. Review annually.
10. Have a financial planner. Make sure he or she is not a commission salesman.
1. Money alone will not make you happy. Living an "authentic life" will. People have more money today than 50 years ago, yet are no more happy.
2. Have a financial plan for you, not your money. Those with a financial plan report greater satisfaction with life than those who do not.
3. Your plan should be based on your goals, not goals someone else says you should have. Those selling dreams are probably trying to sell you something else.
4. Understand "The Prize". Over the long term, cash makes a real return of 0%-1%, bonds 1%-3%, property (without leverage) 3%-5% and shares 5%-8%.
5. Understand the "enemy within". You are wired to make bad investment decisions, and your financial plan needs to defeat that.
6. Beware false accounting. An investment you bought for $100 five years ago, and sold for $150 yesterday, but cost you $4 to buy, $10 in finance interest costs, and $11 to maintain and insure, made a 25%, not a 50% return.
7. Drip-feed money into the markets so you do not worry about short-term ups and downs. You'll be buying in both.
8. Do not attempt to chase fads, or time the market. You will fail, unless you are lucky. Very few people are consistently lucky.
9. Do not watch your investments constantly. Review annually.
10. Have a financial planner. Make sure he or she is not a commission salesman.
Research on Buffett’s riches
Wafers fell in love with a man old enough to be her grandfather. The immediate provocation: he, the world’s third richest man, had willed that 70 per cent of his estate would go to the Gates Foundation and not to his blood relatives.
There was just no parallel that she could think of. Warren Buffett was her man for all seasons.
She decided to research Buffett. And what she found made her rush to China. “Hey did you know?” she asked. In her excitement she didn’t realise that he wouldn’t know that she was asking about Warren Buffett. “Know what?” asked an incredulous China. “Well, that Warren Buffett is only 76 and that he has a net-worth of $52 billion”.
There was just no parallel that she could think of. Warren Buffett was her man for all seasons.
She decided to research Buffett. And what she found made her rush to China. “Hey did you know?” she asked. In her excitement she didn’t realise that he wouldn’t know that she was asking about Warren Buffett. “Know what?” asked an incredulous China. “Well, that Warren Buffett is only 76 and that he has a net-worth of $52 billion”.
Eggheads made to eat their words by Warren Buffett
WARREN BUFFETT had it all wrong, Mark Carhart told a packed New York conference last summer.
The fortysomething from Goldman Sachs cited study after study showing big-name companies with high price-earning multiples or rapid growth rates make poor investments.
Traditional stock pickers, including Buffett, a fabled raconteur, may “tell great stories,” said Carhart, but betting on big names like Coca-Cola and Gillette was so old-fashioned and obviously no match for Carhart and his complex box of tricks.
The fortysomething from Goldman Sachs cited study after study showing big-name companies with high price-earning multiples or rapid growth rates make poor investments.
Traditional stock pickers, including Buffett, a fabled raconteur, may “tell great stories,” said Carhart, but betting on big names like Coca-Cola and Gillette was so old-fashioned and obviously no match for Carhart and his complex box of tricks.
VFTT transcript: Neville Isdell of Coca Cola
Chrystia Freeland, Financial Times US managing editor, interviewed Neville Isdell of Coca Cola. In this segment discussing his board, acquisitions and corporate social responsibility. This is a transcript of the interview.
Wednesday, September 12, 2007
Valuing Cyclicals Like the Pros
Valuing companies can be frustrating, even with high-quality businesses. If those firms are also cyclical, such as Motley Fool Inside Value recommendation USG (NYSE: USG) or Motley Fool Hidden Gems pick MDC (NYSE: MDC), they can pose significant challenges to analysts attempting to value their shares. To get a better grasp on the challenge of valuing USG, I recently spoke with Peter Supino, the Weitz Funds analyst responsible for the firm's 3% stake in the building materials manufacturer.
Monday, September 10, 2007
Reinsurance Emerges as Lower Cost Alternative to Risk Financing as Credit Markets Become More Expensive: Aon Re Global Analysis
As the property catastrophe reinsurance market moves further away from the 2005 Atlantic Hurricane Season -- the most significant recent catastrophic event to impact the industry -- trends indicate that renewal pricing peaked in July 2006, and that the reinsurance margin per unit of risk reinsured is in decline. That decline comes as the cost of equity and debt capital will be increasing for insurance; as such, the reinsurance pricing and terms cycle can be uncorrelated with the cost of equity and debt capital for insurers and reinsurers.
Swiss Re sees industry claims for natural catastrophes increasing
Swiss Re said it estimates that in 2007 claims for the industry from natural catastrophes will amount to roughly 35 bln usd, well above a benign 2006 which saw claims of 12 bln usd.
The higher claims scenario for 2007 underlines the long-term trend towards higher natural catastrophe claims.
The higher claims scenario for 2007 underlines the long-term trend towards higher natural catastrophe claims.
A V Rajwade: When risk becomes uncertainty - III
Some instruments are so complex that it can take investment banks' computers entire weekends to value them!
Even as a measure of calm has returned to the financial markets, cautions are being sounded. The president of the Bundesbank described the events as “a classic bank run” — but on a different class of financial intermediaries like hedge funds, conduits, SIVs and SIV-lites. In the US, the number of foreclosures in the current year is expected to go up to 2 million, up from 1.2 million last year. This means that one of every sixty house-owners will be thrown out of his/her house, a rate not seen since the Great Depression of the 1930s. And, this is not the end: as many as 2.5 million adjustable rate mortgages (ARMs), where the initial rate was kept low to attract the borrower, are due for re-pricing next year. Quite often, a fall in home prices has been followed by recession. Could we see history repeating itself this year? There are some signs: US car sales in August showed a fall.
Even as a measure of calm has returned to the financial markets, cautions are being sounded. The president of the Bundesbank described the events as “a classic bank run” — but on a different class of financial intermediaries like hedge funds, conduits, SIVs and SIV-lites. In the US, the number of foreclosures in the current year is expected to go up to 2 million, up from 1.2 million last year. This means that one of every sixty house-owners will be thrown out of his/her house, a rate not seen since the Great Depression of the 1930s. And, this is not the end: as many as 2.5 million adjustable rate mortgages (ARMs), where the initial rate was kept low to attract the borrower, are due for re-pricing next year. Quite often, a fall in home prices has been followed by recession. Could we see history repeating itself this year? There are some signs: US car sales in August showed a fall.
How You Perform in Bear Markets is what counts
By definition, a true value investor is primarily focused on the weathering the bear market storms and coming out relatively unscathed. In times of market advance, a lot of people get mistaken for investment geniuses when in fact it's the rising tide that's moving them up in the world.
Bear markets on the other hand, expose the intelligent investor from the fly by night speculator. My approach and the ultimate purpose of value investing is outperforming bear markets.
Bear markets on the other hand, expose the intelligent investor from the fly by night speculator. My approach and the ultimate purpose of value investing is outperforming bear markets.
Friday, September 7, 2007
Tweedy, Browne's Secrets of Value Investing
Tweedy, Browne is money management's equivalent of the Republican cloth coat: nothing flashy, ever dependable, transcending style. It is an organization that was founded in 1920 to deal in thinly traded stocks, and which in the 1950s realized that more money was to be made in owning such typically undervalued shares than in trading them. The firm began to take in outside funds in 1968 and has grown to manage more than $13 billion today.
I asked him how his firm practices value investing today. He says Tweedy, Browne eschews a top-down approach and instead looks for companies that would meet an updated version of Benjamin Graham's requirements.
I asked him how his firm practices value investing today. He says Tweedy, Browne eschews a top-down approach and instead looks for companies that would meet an updated version of Benjamin Graham's requirements.
Brand, growth, management, liquidity, value - the Buffett test
Celebrity weddings can be million-dollar affairs these days, but when renowned investor Warren Buffett married last year, he did so in a small ceremony involving only himself, his new bride, and two guests, according to The New York Times. The wedding was followed not by a privately catered feast, but instead by dinner for the quartet at Bonefish Grill, a seafood restaurant chain where you can get a center-cut filet mignon for less than $20.
Buffett's lifestyle may not brim with the glamour and excitement you'd expect of one of the world's wealthiest men -- his primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes -- but his resume and investment portfolio are enough to make anyone's heart skip a beat. Five decades after starting his first job, Buffett has amassed a $44 billion fortune through his stock market expertise. His firm, Berkshire Hathaway, a holding company that owns such corporate giants as Geico and Fruit of the Loom and has sizable stakes in the likes of Coca-Cola, Wells Fargo, and American Express, averaged a 24 percent annual return over a 32-year period, one of the greatest stock market runs ever.
Buffett's lifestyle may not brim with the glamour and excitement you'd expect of one of the world's wealthiest men -- his primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes -- but his resume and investment portfolio are enough to make anyone's heart skip a beat. Five decades after starting his first job, Buffett has amassed a $44 billion fortune through his stock market expertise. His firm, Berkshire Hathaway, a holding company that owns such corporate giants as Geico and Fruit of the Loom and has sizable stakes in the likes of Coca-Cola, Wells Fargo, and American Express, averaged a 24 percent annual return over a 32-year period, one of the greatest stock market runs ever.
Buffett And Lynch On Rails
As the market has headed downward over the past month or two, there's been speculation that the climate might be right for the great Warren Buffett to go on a bit of a buying spree.
After all, Buffett said earlier this year that his company Berkshire Hathaway is looking to make a $40 billion to $60 billion investment sometime soon, and the recent price drops could signal a chance for the investing world's greatest bargain-hunter to spring into action.
Buffett has been mum on whether he has something huge in the works, but one move Berkshire has made recently involved upping its stake in rail operator Burlington Northern Santa Fe. Berkshire bought 845,000 shares of the railroad last week, meaning it now owns about 15% of Burlington. And that's not the only railroad operator that Buffett has been bullish on. Earlier this year, Berkshire disclosed that it also has sizable investments in both Union Pacific and Norfolk Southern.
After all, Buffett said earlier this year that his company Berkshire Hathaway is looking to make a $40 billion to $60 billion investment sometime soon, and the recent price drops could signal a chance for the investing world's greatest bargain-hunter to spring into action.
Buffett has been mum on whether he has something huge in the works, but one move Berkshire has made recently involved upping its stake in rail operator Burlington Northern Santa Fe. Berkshire bought 845,000 shares of the railroad last week, meaning it now owns about 15% of Burlington. And that's not the only railroad operator that Buffett has been bullish on. Earlier this year, Berkshire disclosed that it also has sizable investments in both Union Pacific and Norfolk Southern.
Man Tries to Break Into Buffett's Home
A man with camouflage paint on his face and a fake gun tried to break into to billionaire Warren Buffett's house but fled after a scuffle with a security guard, police said Thursday.
Buffett's wife, Astrid, summoned the guard after the doorbell rang shortly after 10 p.m. Wednesday, police said.
The security guard found the man, dressed all in black, on the home's front porch and confronted him, police said. The man struck the guard on the head, then fled and remained at large Thursday.
Buffett's wife, Astrid, summoned the guard after the doorbell rang shortly after 10 p.m. Wednesday, police said.
The security guard found the man, dressed all in black, on the home's front porch and confronted him, police said. The man struck the guard on the head, then fled and remained at large Thursday.
Thursday, September 6, 2007
Minding Your Money
Why do smart people make stupid financial choices—and how can they avoid repeating them? Having a head for investing, it turns out, isn't about doing arithmetic on napkins or studying spreadsheets. In fact, a key requirement is modesty and self-awareness, says Money magazine senior writer Jason Zweig, author of “Your Money & Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich” (Simon & Schuster. $26). Zweig endured a series of MRIs to see for himself how the brain responds to financial challenges, and he culled insight from the growing field of neuroeconomics, which studies the biochemistry of our financial behavior. NEWSWEEK's Temma Ehrenfeld spoke to the author about the perils of our brain-triggered responses, how avid investors are like drug addicts and why women really are better investors. Excerpts:
Wednesday, September 5, 2007
Compounding: a snowball rolling down a remarkable slope...
Probably there isn't any other subject in the (financial) world that gets that little attention, and is that important at the same time... as compounding. Albert Einstein (1879-1955) called it the 'Eighth Wonder of the World'. Warren Buffett has been said to agree with him. And probably you should too!
Compounding is one of the most powerful principles in our universe. Almost everything you see around you is the result of a compounding process.
The human brain is programmed in a linear way. We are too much focused on the short run, on annual or even quarterly returns. Most of us are underestimating the effects our short term focus will have over time.
Compounding is one of the most powerful principles in our universe. Almost everything you see around you is the result of a compounding process.
The human brain is programmed in a linear way. We are too much focused on the short run, on annual or even quarterly returns. Most of us are underestimating the effects our short term focus will have over time.
Million-Dollar Man March
Humor~~
Demanding further intervention from the Federal Reserve to protect their endangered fortunes, thousands of the nation’s leading hedge-fund managers marched on Washington today.
Dubbed “The Million Mercedes March,” the protest was said to be the largest chauffeur-driven demonstration in the capital’s history.
Demanding further intervention from the Federal Reserve to protect their endangered fortunes, thousands of the nation’s leading hedge-fund managers marched on Washington today.
Dubbed “The Million Mercedes March,” the protest was said to be the largest chauffeur-driven demonstration in the capital’s history.
Subprime Risks: Overblown
The market has gone haywire. As I write, the Dow Jones industrial average has experienced 14 triple-digit fits and starts since July 20. Subprime fears have made financial stocks even more volatile. This pinball effect is leaving many investors feeling skittish about where to put their money. During tough times like these I stay focused on the areas I know best, which keeps me calm and confident in my decisions.
This way I can concentrate on what matters most: underlying business fundamentals. And I don't waste time worrying about things I can't control or predict, like what sectors will be in vogue next or where interest rates are going.
Warren Buffett and Charles Munger have dubbed this kind of industry-specific expertise a "circle of competence." The circle's size doesn't matter as much as recognizing its boundaries. When times get tough, fear leads people to overdiversify their investments in hopes of minimizing losses. Bad idea.
This way I can concentrate on what matters most: underlying business fundamentals. And I don't waste time worrying about things I can't control or predict, like what sectors will be in vogue next or where interest rates are going.
Warren Buffett and Charles Munger have dubbed this kind of industry-specific expertise a "circle of competence." The circle's size doesn't matter as much as recognizing its boundaries. When times get tough, fear leads people to overdiversify their investments in hopes of minimizing losses. Bad idea.
Tuesday, September 4, 2007
Jostling in the Skies for the Business Jet Set
THE business jet industry, surging as airline delays keep pushing new passengers into more expensive private jet flying, is undergoing some basic competitive readjustments.
One is a move that will be announced today by NetJets, the company that 20 years ago introduced the concept of selling fractional shares of private jets and managing them for clients.
NetJets will eliminate much-disliked “ferry fees” — charges for flying and repositioning an empty airplane to or from a client’s destination — for many flights between the continental United States and major foreign destinations. NetJets, which has a worldwide fleet of 694 business jets, does not now charge ferry fees within the continental United States.
One is a move that will be announced today by NetJets, the company that 20 years ago introduced the concept of selling fractional shares of private jets and managing them for clients.
NetJets will eliminate much-disliked “ferry fees” — charges for flying and repositioning an empty airplane to or from a client’s destination — for many flights between the continental United States and major foreign destinations. NetJets, which has a worldwide fleet of 694 business jets, does not now charge ferry fees within the continental United States.
Monday, September 3, 2007
The Origin of Money and its Value
The Austrian school has offered the most comprehensive explanation of the historical origin of money. Everyone recognizes the benefits of a universally accepted medium of exchange. But how could such a money come into existence? After all, self-interested individuals would be very reluctant to surrender real goods and services in exchange for intrinsically worthless pieces of paper or even relatively useless metal discs. It's true, once everyone else accepts money in exchange, then any individual is also willing to do so. But how could human beings reach such a position in the first place?
Emotion Can Make You a Bad Investor
Investors often make choices that make no logical sense but perfect emotional sense, argues financial journalist Jason Zweig in his new book, Your Money & Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich. He spoke with reporter Emily Brandon about how to overcome your brain's natural urges to become a better investor.
When investors experience a monetary loss or gain, what kind of physical effect does it have on the body?
When investors experience a monetary loss or gain, what kind of physical effect does it have on the body?
Source: David
Sub-Prime Economic Theory
The possibility that the European Central Bank may raise interest rates in the midst of a financial crisis recalls the great American orator William Jennings Bryan’s famous “cross of gold” speech in 1896. Referring to the international gold standard’s deflationary bias, Bryan railed: “You shall not press down upon the brow of labor a crown of thorns. You shall not crucify mankind upon a cross of gold.”
In other words, ordinary people should not be made to suffer for the foibles of policymakers enthralled by some defunct economic theory.
In other words, ordinary people should not be made to suffer for the foibles of policymakers enthralled by some defunct economic theory.
Saturday, September 1, 2007
Take-Home Lessons on Value Investing
Do you want greater investment returns? You need to assume more risk. So says academic finance, which rests almost entirely on the principle that reward necessarily entails and is commensurate with risk. Indeed this assumption has at least an element of truth to it, inasmuch as stocks are riskier than bonds, and also tend to deliver greater returns than bonds over longer (say, multiyear) periods of time.
Hedge fund manager and author of "The Dhandho Investor," Mohnish Pabrai, begs to differ with the academics. Like so many value investors who've come before him (and to whom he's duly deferential), Pabrai provides a framework for selecting unloved, overlooked, forgotten, and seemingly boring businesses that are selling at cheap enough prices to minimize risk and maximize returns.
Hedge fund manager and author of "The Dhandho Investor," Mohnish Pabrai, begs to differ with the academics. Like so many value investors who've come before him (and to whom he's duly deferential), Pabrai provides a framework for selecting unloved, overlooked, forgotten, and seemingly boring businesses that are selling at cheap enough prices to minimize risk and maximize returns.
Passion for Business vs. Passion for the Business
"It's a little strange -- I'm going from hip hop to kosher food," says Ruby Azrak, the sole investor behind Hot Nosh 24/6, a new line of kosher vending machines that sell onion rings, pizza, potato knishes, vegetable cutlets and mozzarella sticks. Within two years, Azrak hopes to have 2,000 machines installed in airports, hospitals, colleges and yeshivas nationwide.
Azrak has a talent for starting and investing in all sorts of businesses, which was quite apparent as I recently waited for him in his Manhattan office, surrounded by piles of rhinestone-studded sweatshirts from House of Dereon, singer Beyonce and her mom's clothing line, which he also runs.
While Azrak certainly wears the role of entrepreneur well, it's clear that his passion is for starting a business itself, not necessarily a specific type of business. Does this distinction play any role in a small-business owner's success?
Bear Bonanza
As boom turned to gloom, some gamblers with good timing made a fortune. Will they also know when to take their bets off?
Earlier this year Prem Watsa, the gunslinging chief of Fairfax Financial (nyse: FFH - news - people ), had $341 million riding on a hunch that dozens of brokers, banks and insurers could struggle paying their debts. Watsa has a history of making a killing on bearish bets. He sold half the company's stock holdings before the 1987 crash and bought puts against the S&P 500 before the index fell in 2000. But as summer began, his latest wager had produced nothing but losses.
Earlier this year Prem Watsa, the gunslinging chief of Fairfax Financial (nyse: FFH - news - people ), had $341 million riding on a hunch that dozens of brokers, banks and insurers could struggle paying their debts. Watsa has a history of making a killing on bearish bets. He sold half the company's stock holdings before the 1987 crash and bought puts against the S&P 500 before the index fell in 2000. But as summer began, his latest wager had produced nothing but losses.
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