Learning from 'world's craziest investor' | Lionel Barber, Making Money Podcast
Big picture stuff
Lionel Barber, former editor of the FT, has just written a book about “the world’s craziest investor”, Masayoshi Son, Gambling Man.
Masa, as he’s often called, has made and lost hundreds of billions of dollars.
He was Japanese but his parents and grandparents came from Korea. He was an outsider.
He’s ridden the tech wave and been a global investor, from Yahoo to ARM to Alibaba.
He describes himself as Yoda and the world’s craziest investor.
He seems to have a bottomless appetite for risk, for betting everything, time and again. Is he addicted to taking risk?
He was a good operator, an effective business builder, before becoming an investor.
The key lessons from Masa? 1 - take risks. 2 - failure isn’t a bad thing, just learn from it.
He’s got a table in his office in Tokyo which is even longer than Putin’s in the Kremlin, lol.
Masa’s background
Born in 1957, Masa's parents and grandparents had moved from Korea to Japan as economic migrants.
Korea was part of the Japanese empire at the turn of the 20th century.
Masa and his family suffered a lot of racism in Japan because they were Korean.
In fact they had to change their names (as all Koreans do in Japan) because of the racism.
Koreans weren’t allowed many types of career in Japan so a lot of them got into running gambling dens. His grandfather worked in a coal mine.
After WWII, Masa’s family tried going back to Korea but they were rejected. They went back to Japan and had to live in a shanty town.
His father made moonshine then went into pig farming then loan sharking and pachinko (gambling parlours) - basically the underground economy. Masa saw the hustle as a child, and saw his father’s big attitude to risk.
Masa managed to go to America for high school where he learnt English which was key to his later success.
He was treated like a prince by his father who thought he was a genius.
He still faces a lot of anti-Korean racism.
When Lionel was first trying to secure an interview with Masa, he found the one question to ask him - why does he hate the Japanese so much?
As an investor
Cumulatively, Lionel reckons Masa's lost over $250 billion. Woof.
He’s worth about $30 billion today .
These are estimates - it’s difficult to really know because of borrowings.
Masa became the richest person in the world for three days in the dotcom bubble, then rapidly lost 98% of his wealth.
He doesn’t dwell on failures. He’s got mega resilience.
After his dotcom failure, he moved into broadband. He lost a billion dollars a year for a few years because he was convinced it was the future - and he was right.
Masa is the opposite of Warren Buffet who’s very modest, deliberate, careful and analysis driven.
Masa’s got a very good sense of who's going to be a successful Founder.
But of course he can get it wrong. According to Lionel, Masa had a Founder love affair with Adam Neumann, the bonkers Founder of WeWork. The Netflix show about the business (WeCrashed) gives a wee insight. Anyway, Masa saw something in Adam so backed him to the hilt - losing $14 billion!
Masa is a long-term investor and generally has a great sense of the application of technology.
He’s got a short attention span re: decision-making - he’ll make a decision on the fly, with his gut. But when he invests, he does so for the long term.
The stock market and real estate crash in Japan in 1989/1990 fuelled record low interest rates which meant Masa could borrow for extremely low rates and then invest it.
But he sold Nvidia too early in 2019 (he owned 5% and sold it all) and has been scrambling to get back into AI (e.g. buying ARM).
He just invested half a billion in OpenAI, the makers of Chat GPT.
Masa would often invest way more in companies than they’d asked for (or try to).
He’d also threaten Founders by saying he’d invest in their competitors if they didn’t take his money.
