BIO: David Hay has been employed in the securities industry since 1979 when he joined Dean Witter Reynolds, now Morgan Stanley.
STORY: A colleague told David about a business that was going to sell books online. David wasn’t convinced that the business had a competitive edge. So while his colleague invested $50,000 into this company, David chose not to invest. The company was Amazon. Had David invested then, he’d now be a multimillionaire.
LEARNING: Invest only what you can afford to lose. Keep challenging your thesis. Have a systematic quantitative framework to help you keep an open and agile mind when investing.
“One of the most important things in investing is range expansion.”
David Hay
Guest profile
David Hay has been employed in the securities industry since 1979 when he joined Dean Witter Reynolds, now Morgan Stanley.
And since 2022, David has been chief or Co-Chief Investment Officer of Evergreen Gavekal with a special emphasis on macro-economic research.
In 2022, David released his highly anticipated book, Bubble 3.0: Who blew it and how to protect yourself when it blows apart.
The book explores why he believes the financial markets are headed toward a third iteration of past market rotations.
Accordingly, he believes there are a number of investment areas/asset classes poised to benefit from what he has begun referring to as “The New World Disorder.”
Worst investment ever
In November of 1994, David received a call from a colleague. They were both portfolio managers at Smith Barney. At that point, they were investing side by side in virtually everything. The colleague told David about this guy who was starting a company, and he was going to invest $50,000 in it.
The colleague explained that the business would sell books online. David didn’t understand the business’s competitive edge, so he opted not to invest in it.
Six months later, the colleague told him the company was going public. Turns out, the company was Amazon. Had David invested in it when his colleague told him to, he’d now be a multimillionaire.
Lessons learned
- If the idea sounds great, invest only the money you can afford to lose.
- The bigger and longer the trading range, the more important the message of the breakout or breakdown is.
- Constantly challenge your thesis.
Andrew’s takeaways
- Have a systematic quantitative framework to help you keep an open and agile mind when investing.
- For every company that becomes a billion-dollar or trillion-dollar company, the good news is that 99.99999999999% of people missed it.
David’s recommendations
David recommends his free newsletter. You can also get a free copy of Bubble 3.0 by emailing him through Substack. David also recommends reading the Felder report by Jesse Felder.
No.1 goal for the next 12 months
David’s number one goal for the next 12 months is to remove his shorts and go max bullish.
Parting words
“It’s always so much cheaper to learn from other people’s mistakes than your own.”
David Hay
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