The Art of Being Unreasonable: Lessons in Unconventional Thinking

Chapter 12

Investing

I can be an unreasonable investor because I can afford to take more risks.

Even so, I choose investments in the same methodical way I make business decisions: I start by doing my homework. When I’m unfamiliar with an investment category, I research and then develop a working thesis. As I read the newspapers each day, I am constantly processing and analyzing business developments, market movements, consumer trends, political shifts, and economic indicators.

My talented two-person investment team thought I had lost my marbles when I started to increase our position in gold in 2008. Gold, after all, is the favored investment of people who keep large stocks of canned goods and ammunition while scouting for signs of the apocalypse. At the time, though, I saw a series of events unfolding—the Fed lowered interest rates and injected liquidity into the market, which told me the dollar would decline and no other currency would be a viable option. Taken together, those things led me to believe that people would turn to gold. I increased our position from 1 percent to 5 percent of our holdings, and as our investment appreciated, it eventually increased to 15 percent, an allocation unheard of for any family investment office, any foundation, even most individual investors worth more than a billion. But I had a thesis and I stuck by it. From 2008 to 2011, gold increased from around $800 an ounce to more than $1,600 an ounce. My team didn’t think I was so crazy—or even particularly ...