My brand-new market prediction with Louis Navellier / Tributes to Sam Zell / Jeers to the New York Times / Weekend in Rome
1) I just published a brand-new presentation detailing how a historic demo in Las Vegas could reshape the market and create millionaires on a single investment.
Joining me is Louis Navellier, a billion-dollar money manager who has recommended 18 different stocks that have gone up 10,000% or more.
Louis and I both believe that last year's market crash has created an opportunity to buy a select group of stocks that will rise 500% to 1,000%... all thanks to this upcoming event in Las Vegas.
The only catch is, you must get in now, while prices are still cheap. We're even sharing a free recommendation – ticker symbol included – just for watching. Click here to check it out.
2) The investing world lost one of its most brilliant, unique, and iconic figures last Thursday when Sam Zell passed away at age 81.
Nicknamed "the grave dancer" for being willing to wade into the most beaten-down, out-of-favor companies and sectors, he started with nothing and ended with a fortune exceeding $5 billion.
Though I never had the pleasure of meeting him, two of my friends did, current and former hedge-fund managers Doug Kass and Eric Rosen.
Here's an extended excerpt from Doug's tribute to Zell:
Sam Zell was my friend.
A brilliant, whimsical, self-critical and self-deprecating man, he was taciturn in manner and did not suffer fools lightly.
To a contrarian, like myself, he was a god.
Throughout his career Sam saw around the corner. As proof positive, he started out his career at 12 years old, by reselling copies of Playboy Magazine to his friends, paying 50 cents and selling them for $3.
As he moved from flipping Playboy Magazines to flipping multi-billion-dollar properties in his career as an entrepreneur, Sam understood upside vs. downside, recognizing that reward only comes with taking risk.
But, most importantly, despite his riches... what most impressed me is that he did it his way…
In the 40 years I have known Sam I would summarize my takeaway of some of his life and business lessons:
Learn from history
When risk disappears from underwriting standards and money is virtually free, potholes are not far behind
When greed defeats fear, the pigs get slaughtered
Greed breaks markets - the present and future is not likely to be different than the past
Monetary and fiscal excesses are the harbingers of dangerous market conditions
(Real estate) opportunities always exist - both in horrible geographies (like Toledo, Ohio) where there is limited competition as well as in attractive geographies (like New York City) where there are barriers to enter and barriers to build
Hard times produce good values
Here is a list of my Top 10 quotes by Sam:
"The definition of a true partner is someone who shares your level of risk."
"I think it was Confucius who said that 'money talks and bulls*t walks.'"
On hiring - "I look for people who in no way, shape, or form can be intimidated. My greatest fear is somebody telling me what they think I might want to hear. "
"When it's all said and done, the petroleum of the real estate industry has always been capital."
"A tie cuts off the blood supply to the brain."
"Sentimentality about an investment leads to lack of discipline."
"Whatever goals you set, you need to constantly readjust them so that at no time do you reach your goals before your time is up."
On whether opportunities are disappearing - "The world always looks nigh on impossible from the perspective of a desk. But once you get out into the world and if you have what I would call the entrepreneurial characteristics, I just think this country still provides a very unique opportunity."
"Liquidity equals value."
"Every day you're not selling an asset that's in your portfolio, you're choosing to buy it."
Here are excerpts about Zell from Eric Rosen's recent blog post:
I promise if you follow Zell's investing rules, you will be a better investor. Sam said, "I spend almost my entire day listening. I ask questions, I probe, I raise possibilities."
Zell had much to teach if you want to become a better investor.
"The first thing you need to understand is how little you know."
"When everyone is going right, look left." "I've spent my whole life listening to people explain to me that I just don't understand, but it didn't change my view. Many times, however, having a totally independent view of conventional wisdom is a very lonely game."
"Listen, business is easy. If you've got a low downside and a big upside, you go do it. If you've got a big downside and a small upside, you run away."
"At all times, we are keenly aware of what our exposure is. As a result, we are much more of a Benjamin Graham kind of investor. We are very focused on what the liquidation value is. Barnard Baruch, who was a very famous financier said 'Nobody went broke taking a profit.' In the same manner, I have never suffered from any transaction turning out to be too good. The real issue is 'What is the downside'." "My own formula is very simple. It starts and ends with replacement cost because that is the ultimate game. In the late 1980s and early 1990s, I was the only buyer of real estate in America. People asked me, 'How could you buy it?' How could I project yields? Rents? For me, it came down to these issues: Is the building well-built? Is it in a good location? How much less than the cost of replacement is its price? I bought stuff for 30 cents on the dollar and 40 cents on the dollar."
"I pound on my people: taking risk is great. You've got to be paid to take the risk. The risk/return ratio is probably the most significant determinant of success as an investor." "Measuring and gauging the risk reward ratio is the biggest [margin of] safety issue every investor has."
"You can have all of the assets in the world you want, but if you have no liquidity it doesn't matter." "Liquidity equals value. At no time in my career has it ever been more clearly brought home to me than in the (2008)-09 period. If you had liquidity, you had value. …
"The problem with leverage is that you need to pay it back. The biggest measure of success or failure is how entrepreneurs address and deal with leverage. If you are in the real estate business without leverage, that's like being a boxer in the ring without a glove."
"Anytime you don't sell, you buy. So if we had chosen not to sell Equity Office for $39 billion, we would be buying Equity Office for $39 billion."
"I would tell you whatever business I've been in – real estate, barges, rail cars – it's all about supply and demand." "When there is no supply, real estate performs very well. Almost without regard, within reason to the economic conditions. When there is oversupply, it doesn't matter what's going on real estate is going to suffer."
"Entrepreneurs basically not only see the opportunities but also the solutions." "A critical element to a successful entrepreneur- he or she thinks in themes, not in single events." "I don't know too many insecure successful entrepreneurs." "Fear and courage are very closely related.
If you want to learn more about Zell, straight from the horse's mouth, read his 2017 book, Am I Being Too Subtle?: Straight Talk From a Business Rebel:
Last but not least, jeers to the New York Times for being positively gleeful about Zell's death, highlighting in its headline one of the few unsuccessful deals in his career when he got into the newspaper business:
3) As I mentioned in Thursday's e-mail, I spent the weekend in Rome with an old friend and his brother, watching the men's and women's singles and doubles semis and finals of the Italian Open.
It was capped off by a brilliant slugfest Sunday evening between Holger Rune and Daniil Medvedev (unfortunately the Russian won, though I did wave my big Ukrainian flag as he was introduced and walked onto the court – see photos below and more posted on Facebook here).
I had a few hours to tour around on Sunday before the match and during a two-hour rain delay, so was able to see the Forum, St. Peter's, the Pantheon, and the Victor Emmanuel II Monument, among many other sights. It was my first time in Rome since Susan and I look the girls here when they were little roughly 15 years ago...
A big shout out to one of my long-time readers, Vittorio de Pedys, a lifelong resident of Rome and business school professor whom I'd met years ago when he brought his students to New York. He hosted me Saturday night and he and his 13-year-old son gave me a great tour on Sunday (see picture of us in the last photo below).
