Ask Sam
This is your opportunity to ask Sam Wyly your question, be it on entrepreneuring, green energy, technology, finance, management, the economy, history, or books.
11.13.09 | David H. from California asks Sam:
At this economic juncture, where is the best place to invest money?
Sam replies:
I have been through many different phases in my investment life.
I started out as a Saturday morning stock picker, where I pored over newsletters that sent me 90-day free trials. Being a good reader makes you a better investor. My first portfolio came from one of the newsletters, “America’s Fastest Growing Companies.” Later, my own University Computing Company went public and became one of these fastest growing companies.
I went on to become an investor-owner with Bonanza, Sterling and Michaels. Then with Maverick came the hedge fund world – the least understood and most maligned. In all of these cases, my overriding strategy has been simple: Invest in good businesses run by good managers.
Today, as an investor I see lots of great companies. How do you find a great company? Do your homework. Read a lot.
10.28.09 | Katherine C. from Michigan asks Sam:
Do you think we’re heading for an inflation time period like you saw in the 70s?
Sam replies:
We won’t have much inflation in the next year or two. After that, it’s hard to see how to avoid it; it’ll take some maestro work by the money supply managers of the world. We used to sweat over 1, 2, 3% increases in the Federal Reserve Bank’s balance sheet. Since a year and a half ago, the U.S.A. government has guaranteed every piece of paper in sight!
The ‘70s were really miserable. We had both high unemployment and high inflation. We added up those two rates to get the “misery index.” I really don’t think it’s going to be as bad as back then.
Since the ‘70s, we’ve had so many changes for the better in both geopolitics and macroeconomics. There’s much more global competition and growth. We’ve had a huge increase in education and productivity based on knowledge. And, knowledge is so much more available because of the world-wide web. Also, the reduction of “command and control” economies marked by the end of Maoist China 30 years ago and the end of Stalinist Russia 20 years ago has made a lot more people free, adding two billion more customers, vendors and competitors.
10.14.09 | Nate B. from Massachusetts asks Sam:
"You’ve weathered economic ups and downs for decades – when do you see our current recession ending?"
Sam replies:
I think we’re at or close to the bottom. It’s bad news for jobs now, but the recession is clearing out excess inventory so growth can start up again in the future. Entrepreneurs will quickly replace the bloated big businesses that have been lost. Jobs will be created by American businesses that are now more productive. Investors and entrepreneurs like me see bargains galore.
9.30.09 | Mark R. from Texas asks Sam:
"What advice would you give a late bloomer at the age of 39 years, who’s looking to achieve success in business?"
Sam replies:
Most important, as I write in my book, “Success is the quality of the journey.” So, to start, take some time to reflect on what you really enjoy, what it is that really makes you happy. By doing what you love, you will be more enthusiastic, productive and effective.
Second, opportunity is ever-present, economic downturn or no. Now is no different.
Third, as Peter Drucker said, “The purpose of a business is to create customers.” Many businesspeople do not understand that. In the end you have to put every great idea to that test: Are you really going to be able to create customers with this product or service? Will the dogs eat the dog food?
Finally, it’s clear that energy efficient businesses will grow faster as we transition away from a carbon-based economy. So, “green will be the new gold.”
9.16.09 | Chris K. from New York asks Sam:
"As a clean energy proponent, what are your thoughts on the climate bill currently before Congress?"
Sam replies:
I’m convinced that a Carbon consumption Tax and Tariff is a much better way to go than the “cap and trade” bill passed by the House of Representatives this past June.
As I explain in one of the new chapters of my book, this tax is far superior to cap and trade. It taxes what we burn in our coal plants and cars, not what we earn for our work. It is so simple that it could be implemented in a matter of months. That’s compared to more than seven years for the implementation of cap and trade. And a carbon tax is easy to understand, honest, and fair. Cap and trade, however, is a lobbyist’s dream, a way for federal politicians and bureaucrats to pick and choose among who pays what and who gets what. It creates a new currency so politicians and lobbyists can get more powerful and richer, while each congressman and senator competes for his share of cap and trade’s rights to pollute. Economists love the Carbon Tax and Tariff but politicians love cap and trade.
What’s more, I propose that the Carbon consumption Tax and Tariff could be a “revenue neutral” tax, with proceeds going to “fix” social security.
