Enrique is hiring an analyst; Yen Liow on The Game Within the Game; The dumbest McKinsey partner ever; I'm running the World's Toughest Mudder this weekend

1) Since joining Empire Financial Research in mid-2019, my colleague Enrique Abeyta has launched five newsletters (and contributes to two others).

Now, he's looking to hire a rock star analyst to join his high-octane "Empire Elite" team.

Enrique would love to hear from you if you're a stock market junkie who enjoys writing and talking about stocks all day long. You can read the full job description and learn how to apply by clicking here.

2) My friend Yen Liow, the founder of hedge fund Aravt Global, is one of the smartest guys I know and articulates his investment approach better than anyone I've ever seen. He recently did an interview that is an absolute must-watch for any serious investor – trust me. He titled it, The Game Within the Game (50 minutes).

Here's a summary of the questions he addressed in his opening remarks:

• How many 10-baggers do you need in your lifetime? How many 100-baggers?
• Can you find big inefficiencies that you can repetitively exploit?
• Can you survive the ride?
• How do you systematically break down the vast universe of investment opportunities into a finite set of ideas that you have a chance of generating sustainably superior returns?
• How do you maximize your return on time?

And here are the questions from the audience:

• Now that you're going downstream into small caps and even microcaps, maybe tell us a little more about your research process and demonstrate how that needs to evolve as you go downstream – if it does at all?
• What types of industries or companies do you look for, given that you're looking for this "replication"?
• What type of concentration or diversification does your fund have? How many stocks do you own?
• What is your approach to selling a position, and what factors do you use to make that decision?

• What's your typical holding period? 

• Could you talk about idea sourcing and how you size your positions?
• How do you know when a company has a blip in fundamental performance versus a secular change for the worse?
• In a world with increasing innovation, how do you judge the ability of a company to protect its monopoly or oligopoly and not become disrupted?

• When you look at a business moving out of the proof-of-concept stage into that replication stage, how do you define that transition, and is that the point you attempt to invest in it, or do you wait a little longer than after that inflection point? 

• How do you go about identifying a moat? What are the key factors you look at, and are there any financial metrics or whatever you might use as part of that?
• How do you think about the management team versus the moat, and how do you mix those two together, and what are some of your thoughts on those kinds of areas?

3) Bloomberg's Matt Levine with a story about the dumbest McKinsey partner ever (whose last name – I'm not making this up – is Dikshit): McKinsey Partner's Insider Trading Strategy Was Bad. Excerpt:

The consultant made his trades using an account in his name and one in his spouse's name, according to the . Evidence of Dikshit's insider trading was found on his work computer, prosecutors said. On the day before the GreenSky deal was announced, Dikshit used Google to search: "What happens to options when company is acquired" and "greensky market cap." He also used it to check his broker's web page for information about $10 GreenSky call options, they said.

Three weeks later, after news of suspicious trading in GreenSky options, Dikshit used his McKinsey computer to run searches about Rajat Gupta's insider trading conviction.

If I were Goldman, I'd be mad! Not because of the "misusing their confidential information" stuff; that's embarrassing, but it's not like Dikshit's alleged trading drove up the price Goldman had to pay for GreenSky or anything. Just because of the operational incompetence! This is the guy you hired to advise you on your integration of a financial services firm, and he's (allegedly) out there buying short-dated out-of-the-money call options on the target of a merger he's working on? In his own name? From his work computer? Come on!

4) I flew to Las Vegas last night and am now driving 90 minutes south to Laughlin, Nevada, to compete in the World's Toughest Mudder, which starts at noon tomorrow and finishes at noon Sunday (with an extra 90 minutes to finish the last lap, so it's a 25-and-a-half-hour race). The goal is to run as many five-mile laps as possible, each with 20 obstacles, including water, electric shocks, monkey bars, walls, etc.

This is my fifth time doing it. From 2016 to 2019, I ran the first four times as an individual and twice won the 50-plus age group and set the all-time age-group record (since tied but never broken) of 75 miles. You can read about those races here. Here are pictures from the 2018 race, in which temperatures dropped to 26 degrees in the middle of the night, which caused nearly half of the field to drop out due to hypothermia:

This year I'm running it as a two-person team with my buddy, Mark James, a former U.S. Navy SEAL and professional triathlete, who now teaches high-level scuba diving to SEAL candidates in the infamous BUD/S program. Here are pictures of me congratulating him after the 2019 race, plus two pictures of us working as a team at a regular Tough Mudder in 2015:

The rules for a team call for us to run our first and last laps together, but we can alternate laps the rest of the time. We're shooting to each do 50 miles, which would result in 90 miles as a team.

Fortunately, the weather forecast for this weekend couldn't be better: a high of 86 during the day and only dropping to 65 at night.

Nevertheless, it's always a suffer-fest, so wish me luck!

Best regards,

Whitney

P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.