Top 50 Microcap Investor: Joe Koster
We are excited to present Joe Koster, Managing Member and Portfolio Manager of Sorfis Investments, LLC and a part of our Avenel family. Since our analysts view him as a role model, we wanted to surprise Joe by featuring him in this week's Thanksgiving Co/Report. We are grateful for Joe’s mentorship, support, knowledge, and friendship given to our Co/Investor Club team.
Read our feature on Joe Koster
Envy
“These tales constitute the folklore of the financial markets, which, feeding on rumour, are particularly fertile grounds for their cultivation. Like the medieval exempla, the legends contain parables of the Seven Deadly Sins (pride, wrath, envy, lust, gluttony, avarice, and sloth) along with the folly that springs from human credulity.” —Edward Chancellor (“Devil Take the Hindmost”)
In the Financial Crisis that got everyone’s attention in 2008, many blamed the problems on greed—greedy bankers, greedy loan officers, and all those others greedy people that borrowed what they could to buy a dozen or so condos on the side. But, as Warren Buffett and others have said in the past, it’s not greed that drives the world, but envy.
The bankers, loan officers, and your neighborhood barber just couldn’t stand seeing other people making “easy” money. So they borrowed, lent, and leveraged up to play the game too. And as more people saw what those people were doing, they entered the game too—and on and on. Everyone had a good time for a while. But then, as Charlie Munger described it shortly after the crisis:
“It finally got to be like musical chairs, except in musical chairs, you are only one chair short when the music stops. In the new form of musical chairs, everybody has a hell of a time and is sitting on his ass on the floor.”
As we’ve written before, history often rhymes. Over the last 18 months, speculators have been having a jolly good time, on average. The more they speculate and buy things without cash flow or near-term prospects for cash flow, the more someone comes along and pays more to reward that speculation. And on and on.
We make no predictions as to when the music will stop, or which people may find themselves on the floor, but in this season of thanks, we are thankful that the investing game is a no-called-strike game. You can wait for your pitch, and swing when you’re ready. There is always something to do, and there is always value to be found somewhere.
“Almost all the parts of our bodies require some expense. The feet demand shoes, the legs stockings, the rest of the body clothing, and the belly a good deal of victuals. Our eyes, though exceedingly useful, ask when reasonable, only the cheap assistance of spectacles, which could not much impair our finances. But the eyes of other people are the eyes that ruin us.” —Benjamin Franklin
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