What are you reading now? “Life,” Keith Richards’ autobiography.
Your essential book on investing? “Confessions of a Wall Street Trader” by Daniel Reingold. It’s a very old book and the rules that play into that haven’t changed in decades. So, people think that the world’s different; it isn’t really different. The same challenges of greed and fear play out every day in the markets.
What is the first website that you check every day? A blog from Harry Whitton from Knight Capital Group on the ETF markets. It’s a very insider blog about activity...short and concise. I read a lot of stuff on the treadmill between 5:30 and 6:30 a.m. ... primarily bond reports, globally. I think bonds tell you everything. They tell you what’s going to happen to equities long before the equity guys even know.
What is the last website you check every day? I check all the social media feeds from Facebook, LinkedIn and Twitter, as they pertain to investment themes. I’m actually finding that social media is becoming in some ways more important than financial press because I’m interested in getting the take of the individuals on various market moves before they get re-interpreted by writers. You can get that by just following those feeds.
What is the best Shark Tank investment that you have ever made? Highest absolute return so far has been GrooveBook. I invested $75,000; turned it into $14 million within 11 months. And Wicked Good Cupcakes — the first royalty deal ever done on Shark Tank — the company is now the fastest growing cupcake brand in America.
The worst? Probably ToyGaroo — it was the Netflix of baby toys.
An audit of your Shark Tank portfolio had women-run companies outperforming men? The returns are coming from women-led businesses. I am not trying to start a gender war here; I would give money to a goat if I thought I would get a great return. Women tend to manage time better and it is showing up in returns.
What should every investor know about investing in early-stage companies? You’d be lucky for one or two in 10 to work — that’s why you need a portfolio.
You have described yourself as agnostic toward the two political parties. Is that still the case? It is. I demand two things from politicians: transparency and performance. This election is unique; it’s hard to get either from either candidate.
You believe that Republican presidential candidate Donald Trump will win. Why? The outcome of this election is going to surprise everybody. We’ve learned the polls mean nothing. It’s clear to me that we have two flawed candidates, but somebody has to go and fix the things that are hurting America right now. I don’t know whether a career politician is right, which is what we have in one candidate, or somebody who will go and break the furniture in the White House, which is maybe what we need to do. The rest of us are asking the same question; we may not like those two choices, but in the end, this election will come down to simply two things: Which candidate will keep me safe and which candidate will get me a job. Everything else is irrelevant.
Where are Democrats most vulnerable this election cycle? Assuming success too early — this is not a coronation. The old crusty brand of politican doesn’t work anymore — Kennedy, Bush, Clinton — they don’t mean anything to the millennial voter who doesn’t have a job right now.
What would you consider to be the biggest success of President Barack Obama‘s administration? As an international investor, Obama fixed America’s brand overseas — no question about that because when he came in, the brand was tainted. Today, people understand America way better — I give him credit for that.
Its biggest failure? He spent all of his political capital fixing healthcare and many people don’t consider it fixed. He ignored the problem we have with our tax code and regulation, and that’s hurt businesses. It’s hurt job growth.
What should the federal minimum wage be? There shouldn’t be a minimum wage — the market should decide. I’m very concerned that we’re actually destroying employment by raising minimum wages. There’s some evidence that job growth declines half a percent by just controlling minimum wage. Letting the states compete for jobs would [create] a better outcome for everybody and lead to more jobs at a higher wage.
Your take on our tax code? Complete mess; it’s hurting America, making it uncompetitive, scaring away capital — not allowing companies to bring their money home. It’s a total screw up. Our country is broken on tax and on regulation. I see it every day. The best arteries of entrepreneurialism and capitalism in America are clogged with the plaque of government regulation: municipal, state and federal levels. I live it every day. The fastest growing cost in my company — and I’ve got 32 of them — is compliance we have to pay for lawyers. That’s not America; it shouldn’t be.
What two political reforms would you enact if you could? I would immediately reduce corporate tax rates to be competitive with the rest of the world; I’d do that overnight. And I would eliminate the penalties to your party capital for foreign jurisdictions for America tomorrow morning. It would have a massive upside outcome for job creation.
Whose presentation on Shark Tank was the most memorable? If you look at thousands of presentations on Shark Tank and look at the ones that actually got financed, they all had three attributes: They all articulate the opportunity in 90 seconds or less. Like Wicked Good Cupcakes — “Hi, I make cupcakes. I put them in a mason jar and I FedEx them to everybody in America” — It took 20 seconds and I get exactly what the company does. Number two, everybody that got a check was able to explain why they were the right person or team to execute the business plan. Number three, and this is the one that is the most important, you have to know your numbers. If you don’t know your numbers after beating the odds and getting on Shark Tank, you deserve to burn in hell in perpetuity. It’s just so important that people understand the economics of their business and can articulate their numbers.
Who is your favorite Shark? Really? No question; it’s Mr. Wonderful. I love that guy.
Favorite musical artists? My favorite band is Steely Dan. If you look at all of the artists that have played with that band —they’re the best jazz musicians in the world, they always have been. They might be some of the best music ever played. And I like individual artists like Herbie Hancock and Miles Davis.
Who is your political hero? [Otto von] Bismarck. He’s probably one that I’ve spent the most time studying.
Who is your investment hero? Peter Lynch.
Should access to private investments be restricted to accredited Investors? No that’s absolutely ridiculous. I’m hopeful the jobs act will democratize. Transparency and disclosure could solve that problem so people can understand the risks they’re taking.
How would the market respond to a Trump or Hillary Clinton victory? I don’t think it’s going to matter which politician wins — the market is going to assume that both the House and the Senate will remain gridlocked [like] the last eight years. It’s too bad that that’s the case, but it’s going to take a masterful leader to drive through changes. We need a dealmaker. So the market outcome probably favors Trump, regardless of what you think about this strategy. He’s made more deals than any politician ever has.
What is a “next big thing” in financial services? The actively managed, rules-based or smart beta ETF is going to become a very, very large asset class. It allows millennials who are only investing small, incremental amounts on a bimonthly basis to achieve instant diversification. I’ve also been looking at the Department of Labor rules about transparency on fees. This is going to be a major driver for this asset class because for tax efficiency and fee transparency, nothing beats an ETF. And that’s one of the reasons this asset class is probably going to grow at 30% per year.