Sublime

Meriwether did not himself possess a first-rate mathematical mind. Instead, he recruited the top academic talent. No finance professor was more respected than Robert C. Merton. Merton had consulted for Salomon Brothers, so Meriwether already knew him. He agreed to come on board. Meriwether’s other great coup was recruiting Myron Scholes. As journal

also believed then, as I do now after more than fifty years as a money manager, that the surest way to get rich is to play only those gambling games or make those investments where I have an edge.

1906 was a year of political victory for Sam Johnson, but it was also a year of financial disaster. Having gambled and won on the cotton-futures market in 1902 and 1903 and 1904, in 1905 he had gambled more, buying on margin, overextending himself—as his father, having gambled and won on the cattle drives of 1868 and 1869 and 1870, had gambled too

But you said he was a mentor. So what did you learn from him? Risk management. While he was buying into weakness, he wouldn’t just put on a full position and hold it. He would probe the market for a low. He would get out of any trade that had a loss at the end of the week and then try again the next time he thought the timing was right. He kept pro

That a bull market has added to my bank account or a bear market has been particularly generous I do not consider sufficient reason for sticking to the bull or the bear side after I receive the get-out warning. A man does not swear eternal allegiance to either the bull or the bear side. His concern lies with being right.

For example, we have all read the axiom of ‘buy low and sell high’. I changed that to ‘sell low and cover lower’ and ‘buy high and sell higher’.