Women of The Street by Palgrave Macmillan Professional Business

Contents

Acknowledgments

Part I

The Research

Introduction: â&#x20AC;&#x153;The Womenâ&#x20AC;?

The Feminine Investing Mystique

Part II From Theory To Practice: Public Equity Investing 2 Aim Small, Miss Small: Targeting International Small-Cap Stocks Leah Zell, Founder and Principal, Lizard Investors

Quite Contrary: Going Long in Mid-Cap Stocks Thyra Zerhusen, Founder, Fairpointe Capital

Getting Extra from Ordinary: Investing Long and Short in Micro- and Small Caps Fran Tuite, Portfolio Manager, RMB Capital Management LLC

She Blinded Me with Science: Investing in Biotech Dr. Fariba Fischel Ghodsian, Chief Investment Officer, DAFNA Capital Management, LLC

69 91

Credit Investing 6

Puzzling It Out: Distressed Credit Investing Marjorie Hogan, Portfolio Manager and Managing Member, Altum Capital

117

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Contents

Acknowledgments

Part I

The Research

Introduction: “The Women”

The Feminine Investing Mystique

Part II From Theory To Practice: Public Equity Investing 2 Aim Small, Miss Small: Targeting International Small-Cap Stocks Leah Zell, Founder and Principal, Lizard Investors

Quite Contrary: Going Long in Mid-Cap Stocks Thyra Zerhusen, Founder, Fairpointe Capital

Getting Extra from Ordinary: Investing Long and Short in Micro- and Small Caps Fran Tuite, Portfolio Manager, RMB Capital Management LLC

She Blinded Me with Science: Investing in Biotech Dr. Fariba Fischel Ghodsian, Chief Investment Officer, DAFNA Capital Management, LLC

69 91

Credit Investing 6

Puzzling It Out: Distressed Credit Investing Marjorie Hogan, Portfolio Manager and Managing Member, Altum Capital

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7 The Simple Things: Relative Value and Directional Credit Investing Olga Chernova, Managing Principal and Chief Investment Officer, Sancus Capital Management

143

Private Markets: Venture Capital, Private Equity, and Real Estate 8

In the Beginning: Seed and Series A Venture Capital Investing Theresia Gouw, Co-Founder, Aspect Ventures The Pragmatist: Growth Equity Investing Sonya Brown, General Partner, Norwest Venture Partners

167 191

10 Mrs. Fix-It: Distressed and Turnaround Private Equity Investing Raquel Palmer, Partner, KPS Capital Partners LP

211

229

Billion-Dollar Listings: Investing in Real Estate Deborah Harmon, Co-Founder and CEO, Artemis Real Estate Partners

Funds of Funds Investing 12

The Sleuths: Fund of Funds Investing Connie Teska and Kelly Chesney, Founders, Pluscios Capital Management

249

Part III Investing As and Like a “Girl” 13

Lessons from the “Broad Market”

275

Notes

283

About the Author

291

Index

293

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WOMEN OF THE STREET

Copyright © Meredith A. Jones, 2015. All rights reserved. First published in 2015 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN: 978–1–137–46289–3 Library of Congress Cataloging-in-Publication Data Jones, Meredith A. Women of the street : why female money managers generate higher returns (and how you can too) / Meredith A. Jones. pages cm ISBN 978–1–137–46289–3 (hardback)— ISBN 1–137–46289–2 (alk. paper) 1. Women stockbrokers—United States—Biography. 2. Wall Street (New York, N.Y.) I. Title. HG4621.J66 2015 332.6082—dc23

2014041238

A catalogue record of the book is available from the British Library. Design by Newgen Knowledge Works (P) Ltd., Chennai, India. First edition: April 2015 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America.

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Introduction: “The Women”

n 2007, I traveled to Evanston, Illinois, to meet what had up to then been for me an urban legend of the alternative investment industry—women portfolio managers. Sure, I knew that women portfolio managers existed. I had tracked several women-owned or managed funds in various hedge fund databases for a few of my nine prior years in the industry. This was, however, my first in-person sighting. Constance (Connie) Teska and Kelly Chesney of Pluscios Capital Management run a fund of hedge funds based in Illinois. I spent all afternoon with them, exchanging ideas, talking markets, and comparing investment philosophy. They gave me their history in the investment industry, and I shared mine. We didn’t braid one another’s hair or exchange recipes, but aside from that, it was as deep a bonding experience as I have had in my professional life. I left that meeting and did what any Southern woman does with good news to share: I called my mom. Even though my mother is not in the investment industry, she listened intently to my re-cap of the day. From then on, she never missed an opportunity to ask about Connie and Kelly. “How are The Women?” she would ask. On another day: “What do you hear from The Women? After the market crash in 2008: “Are The Women okay?”

When I look back on her use of that generic terminology, I realize that I am in many ways to blame for her language. My mom, like most people, had only a passing familiarity with the hedge fund industry. She had never heard me, or anyone else for that matter, tell stories

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about the market exploits of a non-male investment wizard. George, John, Warren, and Julian were familiar names to her. Connie, Kelly, Leah, Nancy, Catherine, Renee, and other female monikers were completely foreign. My mom is not alone in believing the hedge fund industry specifically, and the money management industry in general, is a man’s world. At the writing of this book, I estimate that there are fewer than 125 female-owned or managed hedge funds out of roughly 10,000 or more funds worldwide. John Coates, senior researcher in neuroscience and finance at Cambridge University, has said that “[e]ven with massive diversity pushes I don’t think there is more than 5 percent women taking risk in the financial world, starting from the trading floors to the asset managers.”1 Certainly, there is a wealth of female participants in the hedge fund and investment industries. You’ll often find women marketers, investor relations staff, operations and compliance personnel, or financial officers. Rarely do you find a woman in the driver’s seat as the decision-maker who decides what to buy and sell and when. As a result, those few intrepid female portfolio managers have had to look pretty far afield to find mentors and role models. One portfolio manager I interviewed as background for this book described her investing idol to me in detail. Nicknamed the “Witch of Wall Street,” this manager’s mentor developed a tried-and-true methodology for growing and protecting wealth: • invest conservatively • keep substantial cash reserves • don’t let emotion rule your investments This investment philosophy served the Witch of Wall Street well, creating a vast pool of wealth estimated to be $2 billion. 2 Unfortunately, this portfolio manager has not been able to meet her mentor and learn her market wisdom directly. Why didn’t they chat? Because the Witch of Wall Street, otherwise known as Hetty Green, died in 1916. This female portfolio manager, faced with a dearth of investors who thought and traded like she did, researched a woman who had been dead for nearly a century to use as a role model. Hence, one of the many reasons I decided to write this book.

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When people ask why I feel a project like Women of The Street is so important, I can now practically anticipate the questions and objections. • • • •

If there are so few women in the industry, why bother? Why doesn’t anyone ever talk about men who perform well? Isn’t the sample too small to draw any real conclusions? Are you a sexist?

These questions come up so frequently that I now answer them almost by rote. It has been proven, in my research and that of others, that women invest differently than men, upon whom a wealth of investment research has been conducted. Collectively, women’s approach, which is in many ways similar to Green’s tenets above, has proven profitable and reliable, and it outperforms the industry at large. More women portfolio managers in the investment industry would be good for investors. Being able to choose an investment manager whose approach more closely mirrors your own is also a positive. Diversification of investments, be it by strategy, asset class, or gender, is good for all investors. Deploying some of the techniques that women instinctually use can be beneficial to investors, male and female. The fact that I’m researching women’s unique and potentially valuable investing skill set does not mean I’m a sexist. It simply proves I’m a capitalist. Finally, providing women with role models who did not own Civil War bonds is crucial to attracting more female portfolio managers. They need to know there is a place for them in an industry that tends to celebrate only big and splashy wins, such as George Soros’ $10 billion bet against the British pound and John Paulson’s $3.7 billion subprime mortgage win. The investment industry is one in which both the tortoise and the hare exist. Not surprisingly, we hear stories only about the hares who make a big killing on a few risky deals. Even more intriguingly, we all know that at the end of the fable, the tortoise wins. And, as Margaret Thatcher famously quipped, “The cock may crow, but it’s the hen that lays the eggs.”3 This book celebrates the steady and consistent execution of an investment strategy that results in long-term outperformance. The portfolio managers interviewed exemplify the best traits that women

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investors tend to exhibit. Their example will help encourage the next generation of women portfolio managers, and their wisdom can inform your investment decisions, no matter what your gender. At the end of the day, I hope you learn from them and that this book makes you invest “like a girl.”

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Index

9/11, 65, 202–3, 241, 244 13-F stock filings, 20 Accel, 168–72, 186 Acorn International Fund, 26, 32, 34–6, 41, 44 active capital, 261–4 adjustable-rate mortgage (ARM) swaps, 125 Airborne Health, 192, 206, 209 Alcoa, 57–9, 63 Allegheny/Chicago Trust Talon Fund (CHTTX), 48, 50–1 Allergan, 95 Altum Credit Master Fund, Ltd., 118, 123–4, 131 Amazon, 167, 177, 186 American International Group (AIG), 20 amygdala, 18–19 see also brain Angel List, 178 Anheuser Busch, 217 annuities, 82–5 apartments, investment in, 240–3 Apple, 20, 69, 77, 167 Aramsco, 202, 204 Artemis Real Estate Partners, 229, 236, 238–41, 243, 245 Aspect Venture Partners, 168, 171–3

asset-backed lending (ABL), 260–1 Aston/Fairpointe Mid-Cap Fund, 48, 50 AT&T, 242–3 Attends Healthcare, 220 Bailey 44, 208–9 Bank One, 250, 257 Bankers Trust, 121, 230–3, 235 bankruptcy, 78, 85, 140, 148, 160, 162, 196, 212, 218, 226, 234, 243, 261 Barber, Brad, 10, 14–16, 276–7 Barron’s magazine, 50, 57, 87, 268 Bear Stearns, 10, 118, 121–4, 128–30, 138, 192–5, 197, 236 Bear Stearns Asset Management (BSAM) funds, 129 Belo, 60–1 Berkshire Hathaway, 117 biotech, 91–9, 101, 104, 106, 108–13, 215, 279 Birchbox, 171, 182, 184 Blair, William, 70 Boeing, 59, 119–20, 128 bonds, 5, 20, 125–8, 134, 136–7, 139–40, 144, 148–50, 152–3, 156, 159, 161, 259, 276 BorgWarner, 54–5 Boston Scientific, 56, 65

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brain amygdala, 18–19 cognitive diversification and, 20 gender and, 18–19 hormones and, 18 nucleus accumbens, 19 toxicity, 109 Britton, Paul, 131 “broad guidelines” for investing, 277–80 Brown, Sonya, 191–210, 279, 281 early career, 193–5 on growth equity, 198–200 on importance of networks, 204–7 iXL Ventures and, 195–8 on omnivorous investing, 200–4 overview, 191–3 on return expectations, 207–9 on women CEOs, 209–10 Buffett, Warren, 44, 117, 278 Cahill, Larry, 19 Capital Adequacy, 157–8 Capstone, 131, 133–4 Cargill, 145 Charles Schwab, 51 Chernova, Olga, 143–64, 277–9, 281 Citi Group and, 155–7 disciplined approach to investment, 157–62 early career, 144–8 on educating investors, 148–50 on experience and market cycles, 162–4 on investing during financial crisis, 150–4 overview, 143–4 Chesney, Kelly, 3, 249–72, 277, 280–1 on active capital, 261–4 early career, 251–3 funds business and, 257–61 on integrity, 264–8 Long Term Capital and, 253–5

on-the-job training, 255–6 overview, 249–51 on portfolio diversity, 268–70 on pulling the trigger, 270–2 China, 32, 83, 171 Cintas, 84 Citi Group, 155–7 Citibank, 123 Clement, Douglas, 20 Coates, John, 4, 14, 17 collateralized bond obligations (CBOs), 125 collateralized debt obligations (CDOs), 117, 126, 128–9, 131–5, 174 collateralized loan obligations (CLOs), 117, 135, 137, 148–9, 153, 156, 159 Columbia, 26 commercial mortgage-backed securities (CMBS) loans, 129, 239–40 consistency, 88–90 controllable situations, 222 Crain’s “40 Under 40” list, 212 credit derivatives (CDX), 156 Credit Suisse, 136 cross-asset correlations, 157 DAFNA Capital Management, LLC, 91–2 de Gennaro, Manuele, 15, 17 default, 9, 135, 144, 149, 151, 154, 156, 158–60, 164, 255 Dendreon, 107 Department of Justice, 217 Depository Trust & Clearing Corporation (DTCC), 161 diffusion tensor imaging (DTI), 19 Dimon, Jamie, 130, 257 diversification, 5, 7, 20, 49, 62, 109, 133, 135, 158, 161, 241–3, 245, 250, 255–6, 260, 264, 267–8, 276, 278, 281 Dodd-Frank, 156

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Doyle, Arthur Conan, 249 Draper Fisher Jurvetson (DFJ), 169, 172 early-stage investors, 168–9, 171, 177–80, 190, 192, 195, 205 Edward Lifesciences, 55–6 efficacy, proof of, 102–6 Eisen, Steven, 88 Electrical Components International, 212 Elowitz, Ben, 184 emotions, managing, 64–7 estrogen, 16, 20, 170 Exabeam, 171, 173 Exchange Traded Funds (ETFs), 64, 77, 159 Excite@Home, 242–3 Expera Specialty Solutions, 212, 218 Facebook, 76, 167–8, 173, 178, 266 fads, 27, 39, 89–90, 189, 277 see also trends Federal Deposit Insurance Corporation (FDIC), 236 Ferh-Duda, Helga, 15, 17 Fiesta Restaurant Group, 88 financial crisis Chernova on, 150, 152–3, 155–9, 161–3 Citigroup and, 155–7 credit derivatives and, 153 Greece and, 144, 162 Harmon on, 229–40 J.P. Morgan and, 150 leverage and, 153, 158 liquidity and, 159 North American Breweries and, 218 opportunity and, 235–40 OTC trades and, 161 real estate and, 233–4 Zerhusen on, 61 First Boston, 118–21

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295

First Chicago, 250–1, 257 First Data Resources, 32 Fischel, Nathan, 92 FMC, 53, 57 Fonstad, Jennifer Scott, 168 Food and Drug Administration (FDA), 100, 107–9 food engineering, 93–5 forecasting, 13, 79 Foreman, Peter, 73 FORTRAN, 122 FTI, 53, 57 Gannett, 60 Gates, Bill, 168 Gateway Computers, 196 Gaucher disease, 92, 111 gender bias, 147 General Electric (GE), 196, 213 General Motors (GM), 169–70 Genta, 107 Genzyme, 111–12 geography, 20, 186, 232, 238, 240–1, 244 Ghodsian, Fariba Fischel, 91–113, 278–9 Allergan and, 95–8 biotech and, 108–11 early career, 93–5 on efficacy, 102–6 food engineering and, 93–5 on health care, 111–13 hedge funds and, 98–101 overview, 91–2 on short investments, 106–8 Gilbert, Alex, 236 Ginnie Mae, 125 Global Brass and Copper, 224 Google, 47, 52, 69, 76, 167, 174, 178 Gouw, Theresia, 167–90, 277–9, 281 Accel and, 169–72 areas of expertise, 182–6 Aspect Ventures and, 171–2

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Gouw, Theresia—Continued on building value, 176–8 on diversification, 174–6 on early investment, 179–82 on getting back to basics, 172–4 overview, 167–9 on predicting markets, 186–90 Great Depression, 231 Great Recession, 48 Greek debt crisis, 144, 162 Greenspan, Alan, 128 Gross, Bill, 185 GTE Automatic Electric, 251 Gunthel, Richard, 232 Gur, Raquel and Ruben, 19 H&M, 41 H&R Block, 62 Hamman, Stephan, 18 Harmon, Deborah, 229–46, 277, 279–80 on crisis opportunities, 235–40 early career, 230–5 on multifamily investments, 240–2 on new cycle, 244–6 overview, 229–30 on real estate investment risks, 242–4 Trump and, 234 Harris Associates, 31–5, 70, 72–3 Harris Bank, 48–50 Hedge Fund Research, Inc. (HFR), 10–12, 144, 250 hedge funds, 3–4, 8–12, 20, 27, 40, 59, 61, 64, 69–73, 85–6, 90, 92, 98, 118, 131–4, 144, 153, 249–50, 252–6, 258, 260–2, 266–9, 271, 277, 280 Hedgefund.net (HFN), 11, 118 herd mentality, 20–1, 56–60 Heritage Home Group, 212, 226 Hewlett Packard, 169 Hill, Napoleon, 167

Hogan, Marjorie, 117–41, 277–9, 281 Altum and, 131–4 on building a business, 122–6 on distressed funds, 139–41 early career, 119–22 on learning to lose, 137–9 overview, 117–18 on people aspect of business, 126–8 on risk, 128–31, 134–7 Hostess, 226 HotelTonight, 171, 182, 184 Hour between Dog and Wolf, The (Coates), 17 Hurricane Katrina, 87 IBM, 37, 52, 61, 196 Icahn, 20 Imperva, 168, 171, 175–6, 179, 182, 184 Inbev, 217 inflection points, 34–5 initial public offerings (IPOs), 89, 96, 101, 150, 168, 184, 188, 194–5, 205, 209 interest only/payment only (IO/PO), 121 International Equipment Solutions, 212 investment banking, 26, 29, 31, 35, 96, 119, 192–4, 204–6, 211–13, 215, 218, 232–3 IRAs, 21, 276 ISDA (International Swaps and Derivatives Association), 146, 152, 159, 161, 164 iTraxxx, 150 iXL Ventures, 192, 195–7, 200 J.E. Robert Companies (JER), 230, 235–6, 239–41 J.P. Morgan, 130–1, 144, 147–8, 150, 155, 250, 258 Jiang, Ping, 20 JOBS Act, 89

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Johnson & Johnson, 77, 103 juggling responsibilities, 35, 123–4, 192, 223, 235–6, 280 Kahneman, Daniel, 16 Keilin and Bloom, 211, 213–16 Kendra Scott Design, 209 Kickstarter, 178 Kidder Peabody, 211, 213–14 Kimberly Clark, 220 KKR, 197, 232 Knowles, 80 KPS Capital Partners, 211–12 Labatt USA, 217 Landes, David, 33 Lehman Brothers, 10, 26, 29–32, 92, 96, 152–3, 162–3, 236 leverage Chernova on, 152–3, 157–9, 164 Ghodsian on, 109 Harmon on, 231–3, 239, 243–4 Hogan on, 129, 136 Palmer on, 218 Teska on, 265 Tuite on, 79, 83, 85 Zerhusen on, 61–2 leveraged buyouts (LBOs), 160 Lewis, Edward, 211 Li Chang, 128 Libbey Glass, 71, 82–3 LIBOR, 125, 159 Lighthall, Nichole R., 18 liquidity, 52, 58, 61, 77, 81, 101, 110, 128–9, 132, 134, 137–41, 144, 156, 158–61, 163, 188, 205, 214, 226, 229, 239–41, 244, 249, 256, 269–70, 280 Lizard Investors, 25–7, 34, 42, 44–5 Long Term Capital Management (LTCM), 20 long-term investing, 53–6 loss ratios, 168, 179–80

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297

Maestripieri, Dario, 15, 18 Magna International, 55 market cycles, 54, 79, 88, 162–4, 232, 244, 278 Marruka, Mike, 167 Mather, Mara, 18 McDonald’s, 77 McGraw-Hill, 62 medical devices, 91, 106, 110–11 mentoring, 4, 33–4, 70, 73–4, 83, 86, 88, 232, 251, 258, 280 mergers, 30, 60, 194, 196, 202, 217, 258, 260 Microsoft, 61, 69 mid-cap stocks, 42, 48, 50, 52, 54, 58, 65–6 milestones, 117, 187 money managers, women as admitting mistakes, 21 benefits, 7–9 biology and, 17–20 “broad guidelines” for investing, 277–80 cognitive and behavioral reasons, 12–21 confidence and, 278 conviction and, 21, 278 discipline and, 279 diversification and, 7, 20, 276 gender discrimination and, 281 herd mentality and, 20–1 investing in people, 279–80 juggling responsibilities and, 280 keeping and open mind, 279 mentoring and, 280 need for, 281 networking and, 281 outperformance of female investors, 9–12 overconfidence and, 13–14 paths to success and, 281 practical application, 22

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money managers, women as—Continued re-evaluation of investment theses, 278 risk and, 14–15 trading, 16, 277–8 Monsanto, 57 Morgan Stanley, 162, 193 mortgage crisis, 152 mortgage-backed securities (MBS), 117, 129 motherhood, 280 MTV, 194 multitasking, 19 see also juggling responsibilities mutual funds, 8–9, 32, 35–6, 40, 48, 59, 113 My Alarm Center, 208–9 National Institutes of Health, 234 networking, 281 Northern Trust, 63 Norwest Venture Partners, 199–200, 204 Novadaq (NVDQ), 113 nucleus accumbens, 19 see also brain Nvidia, 52 Obamacare, 111 Odean, Terrance, 10, 14–16, 276–7 Oglebay Norton, 78 omnivorous investing, 200–4 optionality, 41–3 overconfidence, 13–14 Overstock, 87 over-the-counter (OTC) transactions, 160–1 Packaging Dynamics, 218 Palmer, Raquel, 211–27, 279, 281 on bankruptcies, 226–7 Depends and, 220–2

early career, 212–15 on finding values, 222–4 on manufacturing, 224–6 on opportunities, 218–20 overview, 211–12 transition from advisor to investor, 215–18 Paquette, Lynn, 123 PCA Skin, 192, 206, 208–9 Peterson, Peter G., 30 pharmaceuticals, 91, 94, 99, 202 Pharmacyclics (PCYC), 102, 105 Physicians Formula, 192, 205, 209 PIKs (pay interest in kind), 150 Pluscios Capital Management, 3, 249–50, 255–6, 258, 263 practical rules for principal investing, 192–3 prepayments, 117, 126, 135 Pretty Woman (film), 211 price-to-earnings ratio (P/E), 55–6, 66, 91, 97, 106, 249 pricing, 111, 120, 151–2, 238, 245, 252 Pritzker, Penny, 229, 237 Procter & Gamble (P&G), 71, 203, 220–1 Psaros, Michael, 213, 224 Pure Food and Drug Act (1906), 91 Questcor, 87 Quidsi, 186 Reagan, Ronald, 64, 267 real estate, 88, 167, 182–3, 195, 229–33, 235–42, 244–6, 276 referrals, 172–3 regulation, 91, 95, 97–8, 100, 109, 112–13, 156, 158 Related Companies, 233 relative value, 154, 157, 162, 255, 259–60 Release Software, 170 Republic Engineered Products, 222

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residential mortgage backed securities (RMBS), 128 Resolution Trust Corporation (RTC), 235, 239, 244 risk Brown on, 203, 209 Chernova on, 143, 148–54, 156–63 Chesney on, 256–61, 265–9, 271 female investors and, 9, 12, 14 gender-specific risk aversion, 14–15 Ghodsian on, 102–3, 109–10 Gouw on, 173, 179–80 Harmon on, 235, 237, 239, 241–6 Hogan on, 120, 122, 125–7, 129, 134–41 managing risk and finding opportunities, 62–4 Palmer on, 219–20 research on gender and, 16–19 Teska on, 252–6, 262, 270 Tuite on, 74, 80–1, 83, 89 Zell on, 31, 36, 40, 42–3 Zerhusen on, 62–4 RMB Capital Management LLC, 86 Roosevelt, Franklin D., 229 Rose, Charlie, 58 Ross, Stephen, 233, 235 Roth Capital Partners, 92, 96 Rothstein Kass, 11, 285n21 Russell Mid-Cap, 48, 54, 66 Russia, 67, 143–6, 255 SAC Capital, 20 Sancus Capital Management, 144 SAP, 36–7, 41 Sapienza, Paola, 15, 18 Schubert, Renate, 15, 17 Schwartz, Alan, 194 Scott, Kendra, 206, 208–9 Sears, 48, 50–1, 62 selling, general, and administrative costs (SG&A’s), 79

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299

Series A investments, 168, 171–3, 175–7, 179–80, 184, 186–7 sexism, 5 Shakespeare, William, 47 Shapiro, David, 213 short investments, 47, 60, 69, 72, 78–9, 81, 84, 88–9, 106–10, 129–30, 140, 149–50, 152–3, 158 short selling Chernova on, 149–50, 152, 158–9 Ghodsian on, 106–7, 109–10 Hogan on, 129–30, 135, 140 Palmer on, 221 Teska on, 253, 255, 272 Tuite on, 79, 86–9 Zell on, 43 Zerhusen on, 60 short-term thinking, 26, 37, 43–4 Silicon Graphics, 169 Sirius Partners, 70, 73, 82, 88 small caps, 25–7, 32–40, 42, 52, 77, 81, 87, 277 Smith, Scott, 57 Smith, Tony, 60 Snap Fitness, 192, 206 Solomon Brothers, 121 sovereign debt, 151–4, 162–4 Sparta Systems, 192, 202, 207, 209 special purpose vehicles (SPVs), 261 Spector, Warren, 121, 138 sports, 70, 73–4 stress, 17–19, 135, 137, 150–3, 158 Summit Partners, 192, 198–200, 204 Talon Asset Management, 48, 51, 70, 78, 85–6 tariffs, 82 tech bubble, 88 Tech Wreck, 48, 189, 196, 244 Teska, Connie, 3, 249–72, 277, 280–1 on active capital, 261–4 early career, 251–3 funds business and, 257–61

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Teska, Connie—Continued on integrity, 264–8 Long Term Capital and, 253–5 on-the-job training, 255–6 overview, 249–51 on portfolio diversity, 268–70 on pulling the trigger, 270–2 testosterone, 15–19, 21 Thaler, Richard H., 20 Think and Grow Rich (Hill), 167 Thinking, Fast and Slow (Kahneman), 16 Tong, Andrew, 20 trends, 82, 89, 154, 162, 168, 180, 212, 250, 277 see also fads Trulia, 168, 171, 179, 182–4 Trump, Donald, 233–4 Tuite, Fran, 69–90, 277–9, 281 on annuities, 82–5 on consistency, 88–90 day-to-day operations and, 74–7 early career, 71–3 mentoring and, 74 overview, 69–71 on owning what you know, 79–82 on short selling, 86–7 smallcaps and microcaps, 77–9 sports and, 74 turnarounds, 69, 211–12, 214, 216, 218, 225–6 TXU, 159 uniform industry, 84 United Airlines, 211, 214 Vanguard, 10, 21, 276, 278 venture capital, 88, 95–6, 168, 170–1, 173–8, 183, 192, 196–7, 204, 207, 209, 275, 277, 280 volatility, 60–2 Volcker Rule, 156

Wall Street Journal, 92, 96, 98, 256, 261, 272 Walmart, 82 Wanger, Ralph, 26, 33 Waterford-Wedgwood, 224 Waupaca Foundry, 224 Wausau Paper, 218 Wedbush Morgan Securities, 92, 96–9, 110 WetPaint, 184 Wolf of Wall Street, The (film), 16 Yahoo, 65 Zell, Leah, 25–45, 277, 280 “don’t bitch, switch,” 32 early life, 27–9 on holistic approach, 38–41 inflection points, 34–7 Lehman years, 29–32 on lessons learned, 45 on maintaining optionality, 41–3 on mentoring, 33–4 overview, 25–7 on perfect storm for business, 43–5 on small cap investing, 37–8 Zerhusen, Thyra, 47–67, 277, 280, 281 CHTTX and, 50–1 Harris Bank and, 49–50 on ignoring the herd, 56–60 on long-term investing, 53–6 on managing emotions, 64–7 on managing risk and finding opportunities, 62–4 on mid-cap investing, 52 overview, 47–9 on volatility, 60–2 Zillow, 87, 168 Zingales, Luigi, 15, 18 Zynga, 190