The 22 year old hedge fund manager

[jawn619]

Jacob Wohl's getting so much attention, and so is the young hedge fund manager cracking the code to private equity, but here is Samir Patel, only a few years older than the Wohl of wall street. I like the guy, and think he's going places.

 

 

 

http://seekingalpha.com/article/3991141-interview-samir-patel-founder-askeladden-capital

2016-07-01_-_Askeladden_Capital_-_Q2_2016_Letter_7f653983ef.pdf

[jawn619]

The kid has Chutzpah, for sure.

2016-08-23_Askeladden_Pitchbook_4b56c895b7.pdf

[stahleyp]

Stuff like this makes me think he's arrogant and wants to be viewed as "special"

 

"This date is significant because I still get to say I started my hedge fund when I was 21. Three days to spare!"

 

Evidently, he's also like no one else...and he says it over and over....and over again.

 

 

With that being said, he seems like a pretty bright kid.

 

[ccplz]

"Life is too short for opaque people." - Kip Tindell

"My life is for itself and not for a spectacle." - Ralph Waldo Emerson

Contact: thehappyanalyst \at/ askeladdencapital \dot/ com

 

22yo small-cap value investor interested in mental models (<3 Munger) and behavioral econ (<3 Thaler). Humility, emotional awareness, and epistemology are the keystones of my approach: how much do I really know, and how much is really knowable? (Ask why I don't build DCFs.) I care about doing the right things for the right reasons. I want to fall asleep wiser than when I woke up.

 

Native Texan; uncharacteristically empathetic INTJ who collects other INTJs. Dog person, real friend, Jody from The Yearling. Pop punk defender who still dresses like a mid-2000s emo teenager, lost boy who refuses to grow up. Kyle Fasel and Bill Angrick's unofficial fanclub leader. Covey 7 Habits disciple. Bookworm.

 

Amateur YA novelist, positive psychology advocate. Admirer of green things and quiet places. Fan of pull-up bars... but not treadmills.

 

Why Askeladden? Admittedly it sounds funny. Well, Roark/Rearden Capital were already taken, sad face, so I had to come up with something more original. The Ash Lad was my favorite character from the giant Norse mythology books I read when I was tiny.

 

He's a pretty good metaphor for my life. Wikipedia: "the Ash Lad is an individualist, free-thinker, and nonconformist who is capable of deep abstract, analytical thinking 'outside the box'." Big Boots to fill - pun intended - but I try my best! :)

 

Two other things worth mentioning: 1) my life goal is to be a great dad, possibly because I always wanted a little brother and never had one. Literally everything I do flows logically from this goal. 2) I have a delayed circadian rhythm and physically can't fall asleep before 2-3 AM (unless I'm camping). I'd like to do what I can to dispel the empirically incorrect myths about eveningness. Chris Barnes wrote some great articles on this for HBR.

 

"<3 Munger", "<3 Thaler", "sad face", "Ask why I don't build DCFs".. Pretty cringeworthy stuff.

 

https://www.linkedin.com/in/theashlad

 

 

 

[oddballstocks]

I hope he does well.  He's a kid.  When I was 21 I wrote cringeworthy stuff as well.  I'm sure at 41 I'll think the stuff I wrote at 35 (now) will be cringeworthy.  It's a growing process.  Kudos to him for starting early.

 

This board reminds me of something I saw when I was younger and followed a bunch of bands.  There'd be these little bands sharing a $300/mo apartment living in squalor playing in disgusting bars that weren't "found out yet."  If the band was good they'd start to play bigger and bigger venues, gain a wider audience and move up.  Fans always felt they'd sold out.  Nothing was as good as the old days when you could see them on Tuesday night when beer was $.25 and wings were $.10 in a basement bar.  The problem is those days sucked for the band.  Who cares about the music if you're sleeping in quarters that a submariner would say were too small?

 

The board reminds me of those fans.  Fund managers are "cool" and doing something different if they manage $2m out of their mom's basement.  But heaven forbid some guy wants to hang his shingle, advertise and market themselves and do well.  "He's SELF PROMOTIONAL!!!"  I wonder if Pabrai ever promotes himself?  Or Buffett?  Oh wait...those guys are CONSTANTLY promoting themselves.  Buffett is the greatest self promotion machine the market has ever seen.  He has a bit more experience and has perfected this home spun persona that people love.  This is what comes with experience.

 

Maybe there is some level of purity that comes with managing a tiny amount of capital.  At least this kid is out there hustling, writing for Seeking Alpha, looking to tutor kids.  He'll do well.  He seems to know the value of a buck, and he's working hard to find them.

[Guest roark33]

This "kid" is terrier investing on Seeking Alpha, if you want to follow his stuff. I believe he has like a 40% position in LQDT right now. 

 

 

[jawn619]

I hope he does well.  He's a kid.  When I was 21 I wrote cringeworthy stuff as well.  I'm sure at 41 I'll think the stuff I wrote at 35 (now) will be cringeworthy.  It's a growing process.  Kudos to him for starting early.

 

This board reminds me of something I saw when I was younger and followed a bunch of bands.  There'd be these little bands sharing a $300/mo apartment living in squalor playing in disgusting bars that weren't "found out yet."  If the band was good they'd start to play bigger and bigger venues, gain a wider audience and move up.  Fans always felt they'd sold out.  Nothing was as good as the old days when you could see them on Tuesday night when beer was $.25 and wings were $.10 in a basement bar.  The problem is those days sucked for the band.  Who cares about the music if you're sleeping in quarters that a submariner would say were too small?

 

The board reminds me of those fans.  Fund managers are "cool" and doing something different if they manage $2m out of their mom's basement.  But heaven forbid some guy wants to hang his shingle, advertise and market themselves and do well.  "He's SELF PROMOTIONAL!!!"  I wonder if Pabrai ever promotes himself?  Or Buffett?  Oh wait...those guys are CONSTANTLY promoting themselves.  Buffett is the greatest self promotion machine the market has ever seen.  He has a bit more experience and has perfected this home spun persona that people love.  This is what comes with experience.

 

Maybe there is some level of purity that comes with managing a tiny amount of capital.  At least this kid is out there hustling, writing for Seeking Alpha, looking to tutor kids.  He'll do well.  He seems to know the value of a buck, and he's working hard to find them.

 

+1

 

I have nothing to add. except for his most recent letter!

2016-09-01_Askeladden_Capital_Q3_Letter_-_Lucky_or_Smart_FINAL.pdf

[stahleyp]

I'll give him credit for striking out on his own. When I was 22...eh, yeah let's not talk about that.

 

However, don't you think it's kind of odd when someone brags about much they don't try and are still awesome?

 

Per his linkedin:

 

"Bloomberg Aptitude Test (BAT)

Score: #1 Worldwide

June 2013

Didn't prepare, had never taken a formal finance class outside of intro to accounting... all self-taught. http://about.bloomberginstitute.com/hall-of-fame-june-2013/"

 

or

 

"51Q, 44V, 7 IR, 6 AW. Took a couple practice tests the week of, but otherwise walked in cold with no test prep since studying for the SAT in middle school..."

 

I don't deny this kid is bright and will probably do well in life but bragging about how effortlessly things are isn't the best of signs. jawn, also thanks for posting the letter. He does have good returns (much better than mine haha).

 

 

 

[oddballstocks]

I'll give him credit for striking out on his own. When I was 22...eh, yeah let's not talk about that.

 

However, don't you think it's kind of odd when someone brags about much they don't try and are still awesome?

 

Per his linkedin:

 

"Bloomberg Aptitude Test (BAT)

Score: #1 Worldwide

June 2013

Didn't prepare, had never taken a formal finance class outside of intro to accounting... all self-taught. http://about.bloomberginstitute.com/hall-of-fame-june-2013/"

 

or

 

"51Q, 44V, 7 IR, 6 AW. Took a couple practice tests the week of, but otherwise walked in cold with no test prep since studying for the SAT in middle school..."

 

I don't deny this kid is bright and will probably do well in life but bragging about how effortlessly things are isn't the best of signs. jawn, also thanks for posting the letter. He does have good returns (much better than mine haha).

 

How's it different from the two gods on this board (Buffett and Munger) trying to say they're not exceptional and anyone can do it etc?  Buffett is just a "normal guy" like all of us right?  Not at all, but that's not what he wants you to believe.  But their sins are forgiven because they've made people money.

[stahleyp]

Nate,

 

I'm a little confused. This guy is implying that he is exceptional. He runs down on linkedin how he barely has to study and kills every test. To his credit he does talk about being lucky with the fund inception date.

[Munger_Disciple]

How's it different from the two gods on this board (Buffett and Munger) trying to say they're not exceptional and anyone can do it etc?  Buffett is just a "normal guy" like all of us right?  Not at all, but that's not what he wants you to believe.  But their sins are forgiven because they've made people money.

 

Munger never claimed it was easy. To the contrary, he thought it is exceedingly difficult.

 

Per Howard Marks:

 

In 2011, as I was putting the finishing touches on my book The Most Important Thing, I was fortunate to have one of my occasional lunches with Charlie Munger. As it ended and I got up to go, he said something about investing that I keep going back to: “It’s not supposed to be easy. Anyone who finds it easy is stupid.”

 

[Munger_Disciple]

Complete letter from Howard Marks:

 

https://www.oaktreecapital.com/docs/default-source/memos/2015-09-09-its-not-easy.pdf?sfvrsn=2

 

Excerpt

 

What Charlie and Professor Galbraith meant is this: Everyone wants to make money, and especially to find the sure thing or “silver bullet” that will allow them to do it without commensurate risk. Thus they work hard (actually, study is intense), searching for bargain securities and approaches that will give them an edge. They buy up the bargains and apply the approaches. The result is that the efforts of these market participants tend to drive out opportunities for easy money. Securities become more fairly priced, and free lunches become harder to find. It makes no sense to think it would be otherwise.

 

And what about the next seven words: “Anyone who finds it easy is stupid”? It follows from the above that given how hard investors work to find special opportunities, and that their buying eliminates such prospects, people who think it can be easy overlook substantial nuance and complexity.

[Oreo]

I've met a fair share of relatively young folks who have achieved disproportionate success. my 2c:

 

- this guy clearly carries a fairly big chip on his shoulder and has an ego. He watched a big chunk of his age cohort graduate from Ivies, go off to feeder bulge bracket investment banks and then hedge funds. He probably does not consider their success deserved (born with silver spoons in their mouths, were privately schooled, etc). Why else would he feel the need to compensate by re-emphasizing his amazing test scores? He thinks he needs to put that info out there to 'get on a level playing field'. I mean, Stanford MBAs with analyst experience at Tiger cubs don't say what their GMAT scores were or that they worked directly under Anthony Noto whilst at Goldman's tech practice. This Asteladden guy does not have that credentialed 'pedigree' so feels the need to pad out his online self-marketing like this. i can sympathise. When you are 19 and lack experiences, you look for anything you can find to throw down on your resume, because your conventional experiences barely fill-up half of an A4 page. But still, saying that he barely studied for the GMAT but still aced just reeks of insecurity, I must say.

 

- if I was him, I'd just emphasize track record. If can't disclose his since-inception time-weighted IRR on his account(s), then just show the rank on TipRanks or PWP. Track record is how the really good young managers became great mid-AuM managers - track record and word-of-mouth. The pitch here is kinda weird and off-putting, though I may be a tad more sophisticated than his average buyer.

[Oreo]

The other thing I'd say is that experience has value. Not everyone can be a young investing genius like WEB. Most people are actually more likely to maximize their lifetime investment success by first spending a few years working under someone as analyst.  If you were cynical, you could interpret this Asteladden guy's relentless pitch and desire to run other people's capital by himself at such a young age as a sign that he wants everything and he wants it quickly. That's precisely the opposite of the message that he probably wants to send, i.e. that he's a 'patient, rational, time-arbitrage'-kind of guy. This incongruity is probably part of the reason why some of you feel unease when you look at his story.

 

Remember Buffett's quip about Rick Guerin wanting too much too fast (and ultimately experiencing a blow-up, learning a valuable lesson) vs WEB and Charlie always knowing that they will be long-term rich so not hurrying themselves too much? The parallel applies here. These kinds of signals are telling me to stay away from this guy for now. Let him prove himself over 7-10 yrs of auditable track record and then reassess.

[arcube]

+1 + 1. On both your posts Oreo.

 

The other thing I'd say is that experience has value. Not everyone can be a young investing genius like WEB. Most people are actually more likely to maximize their lifetime investment success by first spending a few years working under someone as analyst.  If you were cynical, you could interpret this Asteladden guy's relentless pitch and desire to run other people's capital by himself at such a young age as a sign that he wants everything and he wants it quickly. That's precisely the opposite of the message that he probably wants to send, i.e. that he's a 'patient, rational, time-arbitrage'-kind of guy. This incongruity is probably part of the reason why some of you feel unease when you look at his story.

 

Remember Buffett's quip about Rick Guerin wanting too much too fast (and ultimately experiencing a blow-up, learning a valuable lesson) vs WEB and Charlie always knowing that they will be long-term rich so not hurrying themselves too much? The parallel applies here. These kinds of signals are telling me to stay away from this guy for now. Let him prove himself over 7-10 yrs of auditable track record and then reassess.

[Picasso]

A+ comments Oreo.  He's clearly a super bright guy.

 

It reminds me of people who say "my mom made me take an IQ test when I was 10 years old, and I scored 180."  Buffett doesn't need to tell people how awesome he is because he can show it through his success over time.  It was like when he did some super quick calculation in his head at the last Berkshire meeting.  You think he's this old man who's losing his touch with IBM, then bam you're like...wait a minute....

 

All that said, it's easy to be cynical with the Jacob Wohl's and other jokers online.  I've never talked to the fellow but he seems pretty level headed.  It will be interesting to see how this turns out. 

[Spekulatius]

Great comments Oreo-

 

I can see that the weird style of self promotion through feigning humility or showing of us brilliance rubs many the wrong way. It's also clear that he want to be seen as more experienced than he is.

But then again, he is just 22 year old, started his own asset management firm and had a good start, hard to argue with that.

 

If I were his dad, I would advice him to write less and let his performance do the talking. And I would be very proud of my son.

[randomep]

Great comments Oreo-

 

I can see that the weird style of self promotion through feigning humility or showing of us brilliance rubs many the wring way. It's also clear that he want to be seen as more experienced than he is.

But then again, he is just 22 year old, started his own asset management firm and had a good start. hart to argue with that.

 

If I were his dad, I would advice him to write less and let his performance do the talking. And I would be very proud of my son.

 

All brash youth need to learn some lessons the hard way too..............

 

The thing is, at 22 how does he prove to himself he is a brilliant investor, let alone to others.  I would argue he himself doesn't know what his returns will be when he looks back at his life at 55.

 

yaya, I know that Buffett knew in his 20's he was going to be rich, and he was already planning how to distribute his wealth to his kids........

 

 

[Jurgis]

I have to read through his letters - I only scanned through.

 

I think he's in difficult position.

He started well and has some nice gains in less than year.

He's smart and intelligent and maybe has talent.

 

But he's starting during expensive phase of bull market. There are no secrets. Every fricking stock is turned over by dozens of bright managers. Even if he went for microcaps, he'd have trouble to find something that is great business and cheap. I read a bunch of "great manager" letters posted and referenced here. And IMO at this time anyone who claims that they found Buffett's KO/AXP/WPO "great business at a good price" is mostly deceiving themselves either to the quality of the business or to the price or to both. (There are few exceptions but usually with bad future prospects - according to market - and you'd have to have a great business forecasting ability to predict successfully against the grain.)

 

So... we'll see how he does in next five years. Maybe he'll do great - congratz then. ;)

 

But in general: don't start a fund at later stages of bull market. Unless you gonna short it successfully. ;)

[Spekulatius]

Jurgis, good points on starting out in an expensive market. I looked at some of his pics and none of the stroked me as particularly cheap. The stock market relies too much in multiple extension for return, but can you get rich buying mid to high single digit growers at 15-20x earnings?

 

Maybe as an investment manager you can do well, if your performance is better than the indices, even if they are low in absolute terms, but I think that will be tough as well.

[Pauly]

Isn't this guy's hubris a massive red flag in itself? Investing is largely an exercise in mastering human psychology, and his humble-bragging LinkedIn profile suggests he's not quite self aware yet. He was what, 13 or 14 when Lehman collapsed? And now he's a market wizard...?

Sure he might be, or maybe he just hasn't been humbled yet. I wouldn't want my money to be his learning experience.

[Oreo]

In any case - I don't want to take away too much from this young mind. Running his own LLC is an achievement that is multiples of what I had achieved at age 22.

[shalab]

He is probably right that he didn't need any prep for some of the tests as he would have memorized most of the dictionary for spelling bee.

 

However - to succeed as an investor, one needs many other qualities. WEB is a master in spotting mis-priced securities or businesses in many different situations - bonds, stocks (small cap or large cap) etc. In addition, one needs mental equilibrium to stay the course when people say random things - not an easy thing to do. WEB's mental equilibrium (not to speak of the agility) is remarkable...

 

However, creating and running a business is a good thing - especially at a young age. He has had a good start and he will beat the indices for a while if he sells everything and puts everything into cash.

 

I wish the kid all the best!

 

In any case - I don't want to take away too much from this young mind. Running his own LLC is an achievement that is multiples of what I had achieved at age 22.

[John Hjorth]

Picasso tweeted about 18 hours ago:

Taught my toddler how to dip his fry in ketchup for the first time. Didn't have the heart to tell him that life is all downhill from here.

 

Next step for Picasso's son will be: "We know you can grab your own food with a fork or a spoon, because we have seen that you can do it - If you want something to eat, please grab your own food - your self - using the fork or the spoon."

 

At some future point in time, Picasso's boy will be eager tying his own shoelaces, after having been taught doing that by his father or mother, most likely in an exited state of mind. Furthermore, most likely, a year after that, this tiny guy will jump in his shoes while on his way out, turn to his father or mother, putting one foot in front the other, turning towards the actual parent - nothing said - it means: "Please tie my shoelaces".

 

- - - o 0 o - - -

 

In a broader perspective, we are all here to counter the downhill mentioned by Picasso, to the extent we can.

 

To me, it's all about personal development at that young age, as already pointed out in this topic. To me, most likely this guy won't be around in 10 years, but that does not imply, that he imploded within that time span, most likely he just moved on after winding up his fund - like Ted & Tod at BRK, pursuing new opportunities, he judged better, leaving his limited partners behind with a gain or a loss.

 

His goal - right now - is to become a great Dad - what does that have do with maximizing his own and his limited partners return on invested capital?

[jawn619]

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat. - Teddy Roosevelt