The $2 Billion Man

I didn’t know the name Jim Leitner until I started reading the new book The House of Money... but I’m glad I know it now. 

Guessing he has pulled $2 billion out of markets for himself and his investors, Jim is one of the world’s best hedge fund managers.  I think we think a lot alike...

For starters, one of Jim’s favorite trades is Icelandic bonds, which is one of my favorite trades in the world right now.  True Wealth readers made 60% in no time in Icelandic bonds a few years ago, and I think we’ll end up making more this time around.  Getting back to Leitner...

I don’t know how much my subscribers have taken out of the market so far.  But I doubt it’s as much as Jim has for his backers.  When a guy can take billions out of the market, we ought to listen to what he’s doing.  Let’s do that today...

When asked in the book about how to make money, Jim said you need “a combination of story and value... If there’s no story and something’s cheap, it might just stay cheap forever.”

So where do the investment “stories” come from? 

Jim says he does a ton of reading to find them, and highly recommends The Economist magazine.  When asked if he could do what he does if all he had was The Economist, Jim answered “I think I could.”  He’s constantly thinking about how he can turn that story into a trade.  It’s a good exercise.

What’s he worried about today?

“One of the things that makes me nervous today is how cheap credit risk has become... The problem is, something can always happen.” 

I couldn’t agree more with Jim... people aren’t concerned at all with risk right now.  I even devoted my most recent issue of True Wealth to profiting from this very idea.

Looking ahead, Jim likes longer-term strategies over short-term ones...

“The longer-term opportunities still exist because there hasn’t been that much money allocated with multi-year lockups.” 

I fully agree... That’s why I like things like timberland and collectibles... things that nobody on Wall Street will touch.  One year is “long term” on Wall Street.  Longer-term opportunities definitely exist, and we’re making the most of them in True Wealth and Sjuggerud Confidential.

For specific ideas, Jim says he likes stocks in Thailand as well.  Once again, we’re thinking similarly, as I wrote about the Thai market in the April 10thedition of DailyWealth.

Summing up his way of coming up with good investment ideas, Jim sounds exactly like me:

“It doesn’t matter if it’s in currencies, bonds, commodities, real estate, or equities.  You’re reading, you’re thinking, you’re talking to a lot of people, and then you stumble upon something like Icelandic inflation-linked housing bonds and notice that it’s a great bet, so you put a lot of money into it.”

Those words sound like mine.  I don’t think I’ve ever come across someone who sees things as similarly as I do.  It sure is nice to know he’s taken a few billion out of the market...

Good investing,

Steve