Model Portfolio dishwasher:VMSF

My guess is that many of the people who are going to glance at my profile during the next six months have never even heard of the country where I was born, Belarus. As you might have guessed, my story is thus quite a bit different from that of the "typical" portfolio manager. I did not graduate from an Ivy League school or spend time in a top-tier investment bank.

It's not that I couldn't do it. I probably fit the profile quite well -- always at the top of my class in school, passed all three Chartered Financial Analyst exams on the first try, took prizes in both national and regional contests in numerous subjects and even recently won a full-tuition MBA scholarship to one of the top-rated finance schools in the world.

But as I learned during the last several years, it takes a lot more than an Ivy League degree to become a successful investor. It takes passion, determination, the desire to learn and a lot of hard work. The stock market is by definition a giant discounting mechanism, and thus whenever someone seems to get ahead for a short while, that edge simply gets arbitraged away.

Because of this constant market fluidity, there isn't a single strategy that works at all times, so being flexible is the only way to go. Being a "flip-flopper" might not be good if you are running for president, but in the investing world, the opposite is often true. Sticking with losing stocks works in the long run only if are absolutely convinced that you know something no one else does, which is rarely the case.

I learned my lessons the hard way. My investing experience started six years ago, when I plunged all the money I had earned in the previous 12 months into a freshly opened brokerage account. I knew very little about investing; I had come to the United States from a country where the concept of stocks in general did not exist. Thus in the beginning I only bought stocks I heard about on TV. After probably two months or so, 80% of my portfolio disappeared into bottomless holes with names like was called "Calpine" and "Mirant."

But I was only a student at the time, so I wasn't discouraged and decided to fix the problem. I started reading investment books by the ton, and the more I read them, the more I liked it.

Then I discovered Marketocracy a place where I could put all my newly found investing ideas to work without risking more of my limited savings. The performance of my model portfolios at Marketocracy gave me the confidence that I was good at managing money and it was something I loved to do. So I switched my major in school from management to finance and never looked back. I sometimes think that these initial losses might have simply been the best "worst" investment I made in my life.

But that wasn't the only tough experience I had to overcome to get where I am today.

Being a 20-year-old in a foreign country with no money, no friends, and limited English wasn't a walk in the park. I routinely worked 80-hour weeks and did everything there was to do in the hospitality industry, going all the way from dishwasher to manager. But I never regretted the struggle, and I doubt I ever will.

Being born in a communist country where the concept of capitalism did not exist has also given me a rare opportunity to understand why socialist principles do not work.

No one has to explain to me why high inflation is bad for the economy. I lived through several years of triple-digit inflation, accompanied by severe deficits of basic goods and food that people here in the United States take for granted. I also know firsthand why nationalized health care does not work, and why well-functioning financial and legal systems are an absolute "must" for any country aspiring to become successful in the long run.

Being on my own, thousands of miles away from my family and old friends, taught me what hard work really means and why it matters to never stop learning. But I'll admit it has also led to me becoming intolerant, and may be even somewhat cruel, to anyone who feels they are entitled to something.

Yes, capitalism can be harder on some people than on others. But as my personal story shows, America is truly a land of opportunity, and that the only requirement is that you work hard and keep an open mind by looking at every challenge as an opportunity.

So to cut my long story short, I used to be a corporate strategy manager for a large IT company where most of my time was spent on the merger-and-acquisition side, so you can say that I valued companies "for a living." That's when my long-term track record at Marketocracy and my success in their Strategy Lab Open competition opened up the opportunity for me to join a small private equity firm where I'm now a VP of Finance.

To sum it up, I am a permanent student of economics and the investing world who is not only unafraid of challenges but who spends his free time looking for them. And I intend to stay that way, because, as the quote I cited above says, I know that while I might not be able to change my past, it is certainly within my powers to make a brand new ending.

Posted by Marketocracy at 2:28 PM | Permalink