The Inoculated Investor http://inoculatedinvestor.blogspot.com/
Interviewer: Miguel Barbosa of Simoleon SenseRespondent: The Inoculated Investor
When did you first become interested in allocating capital?
The funny thing about me is that I was a value investor before I had ever heard of value investing as adiscipline. In my former life I was a commercial real estate professional and one of my duties was to be asteward of my family’s capital. In that role I analyzed hundreds of opportunities to purchase existing buildings or develop new properties. I think it is a testament to my discipline that from 2003 to 2007 therewas only one deal that I actually advised my family members to invest in. During that span I had dozens of what turned into contentious discussions with real estate brokers who were desperately trying to convinceme that this was a great time to buy and that paying a 4% cap (which is like an earnings yield on a stock)for a Walgreens in Indianapolis made ultimate sense. I feel bad for the people who were swindled by these brokers and bought near the peak of the bubble. Luckily, even before I had heard of Ben Graham Iunderstood that the return you receive has to compensate for the risks you are taking.When it comes to stocks, the indoctrination into value investing that has led me to want to manage money professionally all started when I read Ben Graham’s
The Intelligent Investor
. I know it sounds almostcliché, but there is something about the investment philosophy that Graham details in this book that justclicked with me. If you look at my blog site, I have two quotes from prominent investors that articulate myattraction to value investing better than I ever could:Seth Klarman (Baupost Group): “It turns out that value investing is something that is in your blood. Thereare people who just don’t have the patience and discipline to do it, and there are people who do. So it leadsme to think it’s genetic.”Mohnish Pabrai (Pabrai Funds): “Warren Buffett has said many times that people either get value investingin five minutes or they won’t get it in five years. So, there is something in the human brain--that for someof us--makes all the difference in the world right away and the patience it requires is part of the wiring process.”
Currently you work as an analyst and run the Inoculated Investor Blog. Why did you start the blog?Where do blogs like yours fit in among the financial journalism and equity research spaces?
Well, my days as an official analyst are over, at least until I graduate from UCLA with my MBA. However,I plan to continue working on the blog as much as I possibly can. The reason I started the blog was that Iliterally had a running dialogue about the markets and economy in my mind. It was actually driving me alittle crazy and I badly needed an outlet. Fortunately for me I was able to launch the site with content thatwas quite unique. I attended this year’s Berkshire Hathaway annual meeting and I was literally the only