Out of the Box: Grant’s Rules for Investing & Grant’s Rules of Conduct

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For more than forty-five years I have been on Wall Street. I may not have seen it all, but I have seen a great deal of it. I don’t watch sports, I have never played golf, I don’t fish, I could care less about socializing, and I focus on the Great Game with great intensity. I get up between 3:00-4:00 daily, to write my commentary, “Out of the Box,” and I go at it with vigor, because I continue to be fascinated with winning, in the most complex game on Earth.

From time to time, and today is one of those days for 2019, I share with you what I have learned. Yesterday, one of the biggest money managers in the world asked for my annual recount. Here you are my friend, the Rules for Investing and the Rules of Conduct and what I think “really” matters. I hope the rest of you enjoy it as well.

Grant’s Rules for Investing

1. Preservation of Capital
2. Preservation of Capital
3. Preservation of Capital
4. Preservation of Capital
5. Preservation of Capital
6. Preservation of Capital
7. Preservation of Capital
8. Preservation of Capital
9. Preservation of Capital
10. Preservation of Capital
11. Make Money
12. When a company is under Federal investigation for Fraud—Sell.
13. When a company gets a “Going Concern Letter” from its auditors—Sell

Grant’s Rules of Conduct

1. Your reputation is EVERYTHING. Guard it with your life.. Your word is not only your bond, but it is also your future. There is no amount of money that is worth tarnishing your reputation. This plays out in a number of ways, living in your own skin, sleeping soundly at night, and earning the title of being a “stand-up guy.” Not even the title of CEO, or Chairman of the Board, carries more weight.

2. Surround yourself with people you love and who love you. The rest, well, be polite.

3. There is nothing you can do about getting older. There is “everything” you can do about getting old.

4. Your best, that is what you give. Not one iota less, ever. Good is never enough. Learn to be Great!

5. When you meet an obstacle, and you will meet plenty of them along the way, here are the instructions: “You can go over it, you can go under it, you can go around it, you can go through it, and when nothing else works, dance until it moves.”

6. Pooh said it best, “You can’t stay in your corner of the forest waiting for others to come to you. You have to go to them sometimes.”

7. Many people, along the way, will tell you, “It can’t be done.” Just smile, and then do it. They will never forget the moment, and neither will you.

8. Life is just an adventure. More than that, it is “your” adventure. Have a wonderful adventure from the beginning, to the end.

9. The road to success comes in four stages. They are dreaming, thinking, planning and executing. Everyone can dream, fewer can think, fewer still can plan and the people that know how to execute are a very rare breed. Learn how to execute.

10. No university, on the planet, teaches deductive reasoning. It is one very important key to winning on Wall Street, “figuring it out.” Go buy yourself the collective Sherlock Holmes books. Read them. Learn how to reason deductively.

11. Wishing, Hoping and Praying are not functional tools of the Great Game. Avoid them and the people that use them. Our playing field is riddled with their memories.

12. If you make a mistake it is “your” fault. It is never “their” fault and always remember, “There is no crying in the trading room.”

13. On Wall Street experience is the teacher. She is a harsh taskmaster. The test comes first, and the lesson comes afterwards.

14. Remember the Past and make use of it. Stand in the Present and contemplate it. Finally, stride purposefully into the Future. Make it yours.

15. If you want to be successful, don’t go with the crowd. Make your own path and leave a trail for the crowd to follow.

16. Learn how to transform Excellence from a goal, into a habit.

17. Take the shot. No goal can be made, unless the shot is taken.

18. You get in life what you have the courage to achieve.

19. Wall Street is full of storms. Most people just stand there and wait for them to pass. I suggest that you learn how to dance in the rain.

20. When opportunity knocks, open the door.

21. Learn to be so good at what you do that they can’t ignore you. If you are really, really good, however, you will find that you can ignore them.

22. In my first job interview on Wall Street I was asked, by the head of Human Resources, what I wanted to be. I said, “Fascinated.” I was told that I didn’t understand the question. I replied that she didn’t understand the answer. I was hired.

23. Learn the Rules like a pro, so you can bend them like an artist.

24. Finally, there is “Stuff.” If it is your health, or the health of those that you love, two legs or four legs, or if it is a significant amount of money, then it matters. The rest is just “Stuff.” Don’t confuse what matters, with “Stuff.”

Mark J. Grant
Chief Global Strategist, Fixed Income
Managing Director
B. Riley FBR Inc. & B. Riley Wealth Management
U.S. 954-468-2366
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