Investing

“The Investors’ Single Biggest Mistake”

Bob Gries, the founder of The Opportunistic Investor, shares his insights from his many successful million dollar investment transactions.

He advises:

“The single biggest mistake that investors make is being seduced by the upside of the opportunity.

Whether it’s buying a business or making millions on a “home run” investment, you think to yourself ‘I am going to make all this money’ and the next thing you know you are so seduced by the upside that you didn’t bother to take the time to think about the downside.

When you are looking at opportunities, you have to approach them with the philosophy of the cup being half empty. When I look at an investment before I determine whether I am going to make a dollar or millions, I ask myself about the risks. I first determine my exit strategy to get my money out if things go wrong.

Train yourself to look at the downside first. Determine how you are going to mitigate your risks. Only once you have resolved this issue should you look at the upside.”

“Save money. Learn from the mistakes I made.”

“Looking back we probably couldn’t have picked a worse time to begin actively lending than in 2005- at the very peak of the economy. It was probably a recipe for disaster, but nobody knew that at the time. I could have made a lot of money betting that my company would succeed while Merrill Lynch, Lehman Brothers, Bear Sterns, AIG, Citigroup, Bank of America, Fannie Mae, Freddie Mac all failed.

One of the biggest lessons I learned, is that it is vitally important to be able to say “no” to a deal. The ability to say no  is as critical to investing success as the willingness to say “yes” to a good opportunity. If you are unable to walk away from the bad deals, you will never get the chance to do the good ones.”

Sophisticated Investor Lesson Learned: Don’t be seduced by the upside.

Bob Gries tends to fly under the radar. The extremely successful Tampa, Florida businessman has, according to his own admission, found that overnight success rarely comes overnight. In his twenties Bob owned multiple businesses, none of which became great successes. They just were businesses. Period. In the late 1990s, Bob identified that “spark” for himself and became involved as an active investor by becoming a private lender. But even then, once he had identified his “passion,” it was not all smooth sailing.

What Bob and his company did that major Wall Street firms were unable or unwilling to do, was identify a need in the market and satisfy it. Be very selective, and understand risk. Bob and his colleagues are extremely thorough at risk assessment, something that major Wall Street firms have failed miserably at in recent years.

“Because we had a better understanding of risk, how to evaluate business transactions and how to protect our capital, we were able to truly distinguish ourselves during a period of time when far more businesses were failing than succeeding,” says Bob.

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Portfolio Case Study: Casa Del Mar

St. Augustine is Florida’s oldest community. Our member provided a mezzanine loan for a condo-hotel conversion. Although the market experienced a significant downturn and the conversion was not implemented, the property was sold and the member, due to conservative underwriting- achieved their targeted return.

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Porfolio Case Study: Tampa Bay Lightning

Bridge financing was provided to facilitate the sale of the franchise from its original ownership group.The team has since gone on to be a perennial contender and captured the Stanley Cup in 2004.

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Portfolio Case Study: Marinas

An emerging trend in the marine industry is the conversion of previously rented boat slips and dry storage racks to dockaminiums or owned boat slips and racks. One of our members was able to use its capital market expertise to assist in arranging financing for one of the largest marina transactions of 2006.

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Not sure whether to say “yes” or “no” to a deal?
Contact us today at 1-800-314-9040 for more information.