One of the greatest concepts I've applied in the post-millennium is compounded growth. Simple economics is why Warren Buffet is the second richest man in the world (I think). Obviously, he's the greatest value investor or investor in history. When I first arrived in NYC, my 401k was essentially non-existent and my main investment fund was languishing because of bad decisions by me and a terrible market. To give you an example of how pathetic of an investor I was in the earlier days, I was studying eBay and I mistyped the ticker epay in my trading account and ended up buying stocks in what is now a defunct payment system. This is one of many terrible investment stories prior to 2000. I decided to take the advice of Darko, who makes an excellent living picking stocks. It didn't start out to hot as the first suggestion by him was in a group travel agency. I bought it 2 months prior to 9/11/01 and as we all know now, the market tanked but anything travel related really really tanked. First Darko pick put me in a good hole. I can't blame him for 9/11 and no one would've predicted it anyway. So the second pick was a movie theater chain that I had never heard of in the south. Though I was a little gun shy, I was pretty sure that terrorist weren't going to attack movie theaters so I dumped half my money into it -- after the epay debacle, it wasn't a lot of money to start with. It slowly moved but it was in the direction I was unaccustomed to and that was North. Hollywood started pumping out some good movies and though the economy was in the tank, people appeared to be heading to the theaters to escape the world. After that, it was Mexican telecom. Now this was a big risk because the Internet bubble had burst and Darko was asking me to put money south of the border in telecom. So I threw down some coin into it and took my money out after it doubled in 6 months. Fantastic right?! Well, had I left the money in there, my investment would've grown over 1000% today. That is what I call a pick of the decade. Darko taught me one other important lesson and that was take money off the table and don't look back because it could've easily took a nose dive for whatever reason. Subsequent picks included oil, internet and many interesting stocks. After 6 years of investing with Darko, whom I consider one of the brilliant stock pickers that I know, my personal fund has grown over 700%. The traditional bogey is the S&P which grows 8-12% a year and if you can beat that annually, then you should join a fund. So what's my personal investment strategy? Legal disclaimer: Please do NOT take this advice because I'm NOT a professional investor nor is this considered smart. Please speak with an investment professional for your investment needs. With that said, I don't believe in diversification. It's considered the best investment advice because it protects against the down side, but it also caps your upside. If you were to ask me, then I'd tell you to diversify because I don't want to be responsible for your money. I believe in making big bets and not diversifying. Trust me, along the way I've been burned badly and quite frankly, they were non-Darko picks that I took risks on i.e., biotech. I'm not going to predict 700% for the next 6 years but as I reflect, I thank Darko for teaching me some very important investment lessons. Interestingly, I think this strategy is indicative of many other things in my life: golf, dating, etc. Go for the gusto. I've been burned or come up short many times but it sure makes life a lot of fun. Enjoy the journey. Onto 2007!
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