The next two classes will deal with the Fermat/Pascal way of thinking.
In my view, the best way to understand Fermat/Pascal thinking style, from an investment viewpoint, is to see how risk arbitrage works. And one of the best ways to learn the dynamics of risk arb is to study the experiences of Graham, Buffett, Greenblatt, and Rubin.
As the course progresses, we will be talking about all of these experts. At this time, however, I’d like you to do some work on Robert Rubin.
Rubin learnt risk arb at Goldman Sachs. And the lessons he learnt, he says, served him very well in his life. Risk arb teaches a lot of things about life, as you are about to find out. So, please make the effort of reading/viewing the following:
- Rubin’s page at Wikipedia;
- The first three minutes and fourteen seconds of Rubin’s interview with Charlie Rose;
- Rubin’s commencement address at Harvard;
- Rubin’s interview with Carol Loomis;
- The following pages from Rubin’s book “In an Uncertain World“: A note from the author, pages 7-8, Chapter 2 (A Market Education), Chapter 3 (Inside and Outside Goldman Sachs), pages 173-176, Chapter 10 (Hitting Bottom), pages 340-350, and page 382.
- This article on Rubin in the New York Times Magazine and this letter about that article; and
- This press release issued by Rubin’s office when he was Treasury Secretary.
Just do it!