Steven lent me his kindle so I’m reading Fooling Some of the People All of the Time. Anyone who knows me knows my opinion of the typical hedge fund (e.g. being long and short in stocks within the same sector is not hedging). But Einhorn’s fund does not come across as the typical hedge fund. Reading this book makes me fall a little bit in love with absolute return investing. (By investing, I mean value investing, not statistical arbitrage.)
Absolute versus relative return investing is a good metaphor for life. If I do not decide to be different, then I will default to a “like everyone else—just better than everyone else” mentality. I realize that I’m not really that different. But I decided to not become a doctor, I decided to not get a graduate degree from an ivy league school and I decided to not work as a management consultant. Now I just have to decide to not buy a house in a highly ranked school district and get certified as a rebel yuppie. (Volatility of rankings is higher than I expected.)
I’m still trying to decide whether being an entrepreneur is the best way to make an unique contribution. Part of me feels that the how to pivot your startup trend is like statistical arbitrage (i.e. success lies in the ability to respond to events, not a fundamental understanding of what creates value). Part of me wonders whether it’s possible to work for an established company and not default to a “like everyone else—just better than everyone else” mentality.