YouSaid · the spoken record

Thomas Braziel

lines on the record: 56
first: 2021-12-19
most recent: 2021-12-19
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Oh gosh, yeah. I mean, you know, I work for a few large family offices and one in particular. I'm on Twitter a bunch, not talking about stuff we're working on just because I can't. And they wouldn't like it if I did. So normally I'm talking about stuff I'm buying with my own money. So clearly if I'm wrong, I'm wrong with you or I'm wrong and I'm losing money. I'm not just like, I have no nothing to sell. Yeah, I'm around. I love looking at weird and interesting stuff.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Love it. I love it. That's funny you say that because I think I originally went, Buffett was such a North Star. He still is, but he was such a North Star for me growing up because, you know, he was such a fatherly figure for me and more than just investment. He was like a gentleman, you know, like someone who had ethics and actually had some principles. And so there was like, yeah, there was a business and then there was like a philosophy to it.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Again, I really like autobiographies. Actually, I know a lot of people read alchemy of finance by Soros, but my favorite Soros book is Soros on Soros. And like, it sounds ridiculous because it's not an investment book, but Marcus Aurelius, which was fantastic meditations and things. But those are books about life. But they're important for investing. Buffett's totally right. I mean, once you have a certain, I don't know, certain IQ, you don't even need an IQ. As long as you have a certain interest in investing, it's so much more temperament once you pass that.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“10 years Coca-Wanna buy them or something. So I just think that you should use your unique advantages. Use your unique advantages. And then the third thing that individuals can do that institutions cannot do is who cares if you have big drawdown? Who cares if it takes five years, ten years? If you're a money manager and something takes five years, you'll be fired before that works. If you're an individual, you should be using that to your advantage. So I actually really like this book. It's an autobiography about Bill Zuckendorf. That's phenomenal book. And I had somebody push back to me on Twitter recently saying, oh, well, he went bankrupt. I'm like, yes, he did. I'm not saying like be Bill Zackndorf, but he was a phenomenal person and he did some amazing deals and had a great bite. So I highly recommend that book. There was one book about the Orient Express Hotel Chain, which is fantastic.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“And I just think, like, why? But if it is of interest, you know, try to hone in on something you really like. I mean, I've met guys that, you know, rolled up all kind of things, lawn care businesses, guys and gotten into self-storage because they like real estate and they came across a deal and they liked it and they stuck with it. Even for yourself, like, okay, you're learning a lot about running a company with your current company, right? I mean, you must think, I think there's something to be said for pulling on the string of that. Like if you're a doctor and you know a lot about med tech, like why not find some interesting med tech stuff to invest in? If you're a bankruptcy guy, find some bankrupt stuff. If you know about CPG and brands and stuff, try to find some smart people that are launching their own brands or brands that are like, it's $100 million evaluation caprais now, but it's definitely going to be a billion dollar company because I know the space and I really think that this is like a brand that'll get sort of escape velocity.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so if somebody doesn't like, if they enjoy investing, but they don't want to spend like an ornament amount of time doing it, there's nothing wrong with the kind of never sell David Gardner like kind of tin can stock sort of approach. I think that's eminently advisable to somebody that's just going to buy Disney and own it for 20 years or 50 years. And they have a day job. They like what they do. They work as an accountant or they work as a doctor and they don't need to, I see people getting into danger when they think that they can kind of armchair it. Okay, I'm not saying you can't invest a little bit in sort of the stalwart projects, but why are you punting around on like little altcoins? Like, you know, what are you doing? You know, it's like, I think it's like a propensity that's not really investing. It's just kind of like gambling. I mean, again, it's fine. You can do it, but just remember it's entertainment. That would be my first thing that I see people do.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“I have some other great stories, none that have fled to such a great workout. I think that you're better off spending time in these areas though. Stuff where people kind of think you're crazy to spend your time thinking about, I don't know, longevity, going to Mars. Like, I don't know, kombucha. Like things that people think like, why would you spend a bunch of time on that? Everybody knows you're supposed to go work at a PE firm. I just think that life will be more interesting and the opportunities will be more interesting if you sort of find a road less traveled.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“And that was confirmed earlier this year. Boy, things in the Japanese, and I can't speak for the other parts of the Japanese legal system, but in the insolvency system, move like snails pace and oil compared to America or American bankruptcy system, which people refer to as speed court. And yeah, so that's kind of, and I don't know what exactly what the question was, but yeah, it's been confirmed and it was done consensually because the paired accepting class was the actual claimant. And so just to be clear, these are, imagine if Coinbase went bankrupt, you know, God forbid, but imagine Coinbase went bankrupt. If your Coinbase account, you know, this is what these guys had. They basically had Coinbase accounts from 2014. And Mac Ox at the time was 70 plus percent of the volume of crypto, which at the time crypto wasn't really crypto. It was just Bitcoin.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Property, but let's just switch it from a liquidation to what they call civil rehabilitation. In America, we would say from a chapter seven liquidation to a chapter 11 sort of reorganization. And therefore, everybody can consensually give the increase in value to the claimants without having to provide a legal opinion on whether Bitcoin is property for purposes of the Japanese insolvency code or whether it's currency and there should be a damaged value and that's all you get. So they punted on the question, which is kind of genius. But they got the votes and the paired accepts in class.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Not just in Japan who gets that increased post petition. And it really hinges on whether Bitcoin is considered property. And if it's considered property, then you should have a claim for the full amount of your property, meaning like if you lost 10 Bitcoin, you should have a 10 Bitcoin claim, no matter what that US dollar value is. Or is it currency? And you should have this damage claim that's calculated at the time of the petition being at the time they went under Bitcoin is at 400 bucks-ish. And so you get 10 Bitcoin times 400. Now that's a much lower number than 10 Bitcoin times 50,000, right? And so the question before the court was, who gets that increase? So this kind of got litigated, but not really. What happened was the Japanese court pumped in on the question. They sort of said, oh, we're not really going to answer this. It likely is probably.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Oh my gosh, yeah, so that's been resolved. And what's interesting about it, and I don't want to get too, well, I enjoy this stuff, so I apologize. But, you know, an American bankruptcy and in most insolvencies around the world, if you have a claim, you know, Trey, if your kombucha company has owed $120,000 in data company files for bankruptcy, well, how much are you owed? You owe it $120,000. You're not owed more than $120,000. And so the question with these crypto exchanges that went under in this one in particular was, well, what happens when the value of the property that you had at this brokerage goes up in value? Not a little bit, like a lot. And so who gets the increase in value? Do the claimants get the increase in value or does the company get that? And you just get what we would refer to as that damage claim, that $120,000. So for the question was, this has come up in a few jurisdictions.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Rest of this history. So I get a lot of it is you know, we get carry and a very small management fee to run the investment, but really it's all carry. This guy wasn't going by any heuristics. I mean, he thought, yeah, this person knows about bankruptcy. I know about Bitcoin. I believe in Bitcoin and I'm buying it really, really cheaply. So I'm getting a ton of convexity on the price of Bitcoin. So Bitcoin 10xes, I make 100x. That was always the trade. And like I said, the time he was buying it, he was buying it where he was getting the Bitcoin for free. So, you know, that guy is a fantastic investor. No one's ever heard of him. And he runs around trying to find stuff like this. And I mean, I'm glad he thinks that McGox is the best trade he's ever done. But he's sure found tons of stuff over the years. And he's just a regular guy. He's just out there hunting.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“It'll be a fantastic return from my investors, and this is a great thing, and whatever. So I've been quoted in this little Forbes article about Mt. Gox and somebody that was sort of into crypto who ran his family office, it just like reached out to me. And I said, yeah, I'm working on this trade. Frankly, I was closing my fund and I was trying to find a seed investor to start like an institutional grade hedge fund. And meanwhile, he was like, oh, would you mind working on this trade for me? I was like, absolutely not. I'd love to. I think it's a great trade. It's a fantastic trade. But I wasn't sure about him because I didn't know him. You know, family offices, you know, they might use a Gmail account. They might be in the second floor of a walk-up office and you think, gosh, this guy even have the money to invest. But he was, I mean, he wasn't that bad. But he's very, very legit. We transacted and got an LLC agreement together.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“I mean, to the original family office gave us your traditional, I shouldn't say the exact numbers, but think of two and twenty and think about what they might have given us. It's something not too far off that. I wouldn't say it was a lonely trade. We did have people, you know, it's funny. Most of the time when I pitched it to the hedge funds, I would have the guy that I met with email me afterwards or message me afterwards, be like, hey, man, it's not good for the fun, but like, hey, you think I could get some of these claims for my PA? I can't tell you how many guys I had kind of do that to me. And I actually did try with a few people to get them acclaim here or there. Family offices are funny. I met them because I had been quoted in a Mt. Gox article about how I thought the case was going well and I thought if it's a long story, but if the Bitcoin gets returned to the original claimants, which there was some discussion where it might go back to the company,”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“I mean, this is crazy, and I would never recommend someone do this. I put all my personal money into it. So I did that knowing that it was a little aggressive, and maybe I did it out of spite for my hedge fund closing. But no, not really. I really thought it was an amazing trade. I remember I actually had the claims that we bought in the whole setup. I remember sitting at dinner here in London.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“It's crypto. I'll never get it back my investment committee or like, oh, I get it. You're getting free functionality, but like, what is Bitcoin even worth? I mean, let's be real. And I was like, I don't know. I think it's a real possibility. It could be worth something and it hasn't died yet, even in the trade I was putting it on. Assuming Bitcoin stayed where it was, it was somewhere between the 8 and 10x return. And that was when Bitcoin, I think was it about 10 grand. So we're getting the Bitcoin for free. So our downside was extremely livid. I mean, in my mind, practically zero other than like legal risk and cost of collection and IRR risk. And optionality in Comevexity was incredibly high. So I loaded the boat. My hedge fund at the time, we were actually winding it down so we didn't add any in the hedge fund. But I was able to get a family office on board. And since my hedge fund was winding down, we were making distribution.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“And the trustee was sold some crypto to basically raise fiat. And we were able to buy the claim where we were buying the crypto for free. And let me explain how it was just, if you added up the cash in the estate and you added up the crypto or you just added up the cash, leave the crypto for a second and you divide it by the outstanding claims, you were going to get about 450 to $480 per claim per BTC per Bitcoin. And we were able to buy them anywhere between 300 to $400. So we always knew we were going to get the $450 to $480 back in cash. And on top of the cash was Bitcoin. And, you know, I pitched this trade all over town in New York trying to get a hedge fund to put in capital and let's do it. And they were, you know, people were like, hey, this is not that scalable. This is crypto. We'll never get it passed. The common injection is too small, not scalable.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Pretty, you know, trader locker be. That would be, I might Google Tray Lockerbie, and I'd look for a guy who was maybe into computer science, maybe he was into crypto. I could have had it as an interest on LinkedIn or on Twitter or something. And, you know, maybe he's the right age. Maybe he's below 35 and is into computer science or is somehow into cryptography and whatnot. So I started doing that and I basically found a few claims, bought them, and I didn't think my at the time crypto was at 300. We bought the claims for a look through price of about $100 in Bitcoin. This is kind of an okay trade. It's like, it's okay trade. This happens a lot of times in the life cycle of trade. It's like a company know a lot about. I don't know. Maybe if you follow Disney really closely or something and you're like, this is an inflection point. The real inflection point in the trade was 2018. I think when Bitcoin went to over 20,000, but it kind of pulled back.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“So, this is true in American cases. It's not always true in foreign cases, and it just happened to be that a list of creditors of approved creditors was, I don't, I mean, it is available if you're a creditor in the court, but someone had actually leaked the approved creditor list. And I remember, because hopefully this was pre-GDPR, but we had gotten a hold of the list and it was all public there. I mean, I think there's even links probably to a newspaper where they had the list, you know, posted or at least on their servers or whatnot. But there was a list of approved creditors floating around. So I started phishing around and I figured, okay, I'll start with the funny names because this will be easier to Google and find somebody that matches it, you know, because like John Smith's gonna be pretty hard to find, you know, but, you know, your last name, is it Lockerbie? Is that how you say it?”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Was in dual languages just because there were so many foreign creditors that they do everything in English and Japanese. This is like 2016. Bitcoin was probably at $300. Remember, I bought some Bitcoin on Zappo and maybe on Coinbase as well, just to kind of be like, hey, if I'm going to buy these claims, I should probably know what Bitcoin really is. Like people talk about it. I bought one claim and I thought, oh, that's really cool.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“And that's the hard part about investing this time period where you need to have your ears up, your antennas out, like, and you're kind of like looking, you know, like kind of scoping out, trying to find opportunities. But then when you find something that might be interesting, you have to choose and choose wisely as best you can on where you're going to spend your time. So for this, I saw the docket. I thought, wow, Japanese insolvency cryptocurrency claims. Wow, that's amazing. That is really crazy. I wonder how you buy these. And that was my first. This was a curiosity. I wonder how you actually paper buying this kind of thing. And I thought, wouldn't it be cool to buy one just to see if I could do it? So it was like someone saying, like, wouldn't it be cool to build a cabinet, see if I could just do it? Or something like that, you know, like someone. So I did. So I kind of went out there in the market and, you know, it's easy to read about the case. It was all in English and in Japanese.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“You know, I would just say that so much of your life in business, your personal life and in investing is going to be serendipitous in the sense that I really believe so much of it is preparation, meeting opportunity. I happen to be in the right place at the right time. I happen to know a lot about bankruptcy. I happen to know how to buy claims. And I just so happened to see something I thought, well, wow, this is like ridiculously asymmetric. If this works, yeah, this could really work. And I'll get this ridiculously magnified return on probably the most volatile and interesting asset of our time. So yeah, so Matt Cox was interesting. I mean, I sort of tripped upon Mt. Gox reading the FT and I solved the administration. It was probably year into the administration. There was an article in the FT. And I had known what Bitcoin was, but I didn't think anything of it. I mean, I'm sort of living, as we all do, I'm living in my own body.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Industry for emerging managers doesn't know how to handle that. They know how to check your interactive broker account to make sure that the stocks you say you own, they say you own, right? It sort of like matches and they can look up price on a Bloomberg, but they don't know how to handle some of that ridiculously off the run, no market type securities.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“But it's hard when you're running a $5 million fund and you have no offense very low in service providers to be able to manage that and have a full compliance and investment and valuation committee around that. Does that make sense? So it's hard for the strategy of distress to fit in that emerging manager category. It's a barrier of entry that a lot of the larger call it $50 million up or even maybe 30 to 50 million and up, Alt lender and distress firms, a luxury they have really, that barrier of it's hard to get the proper compliance and valuation oversight. You might have, if you take any big position, you might need a third party valuation for your end and that can cost you 25 grand. So the actual bankruptcy administration isn't going to do a lot. I mean, it can, but that's not really it. It's more about just the cost of running something that's really a bit high end and the sort of the cost.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Ball for them. And the institution is more like, hey, we won good returns. We also want a lot of risk control. We're fiduciaries. We're trying to target whatever 8% in our pension here. We're not allocating to you to like swing for the fences unless that's a directive, which I guess there is the concentrated equity manager, which is kind of become in vogue, I think, with some institutional allocators. That puts a lot of risk on the GP itself because, I mean, they'll pull their money if the GPN's big drawdowns, I'm sure. I mean, they say they won't. But for myself, with doing the stress, it's hard because all the things are basically level two, level three. And so meaning like there's no market price. If I buy a claim in Hertz, maybe I can use the bond that's a Perry Passoo to market. But for the most part, it's like, I own that thing. And like I could probably call some brokers and try to get a quote for Mark's purposes.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“I think it's service providers that it's like a cottage industry. Like it starts out cheap and then people say, oh, wow, there's a lot of demand here. I can charge more. I can charge more. I can charge more. And so this sort of cottage industry builds up, you know, and so all of a sudden it's 10,000 or 25,000 to do something where basically the document's all look the same. And I don't think that's the big hurdle. I think the big hurdle is crossing the chasm between the high net worth hedge fund and the institutional grade hedge fund is almost impossible. That is a hard chasm. And the high net worth individual doesn't necessarily have the same, they don't want the same products as an institution might want. The high net worth guy is probably just like looking at the numbers, maybe reading your write-up, meeting you and being like, oh, I like you. You're an entrepreneur. I'm an entrepreneur. I'll give you a million bucks. And that's great, but they probably expect you to knock the cover off.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“And you need infrastructure, you need compliance and high end service providers because you got to have them, A, because they are better and B, because institutions not request it. They demand it. I mean, they absolutely demand it because they're not getting fired over you. If you can't check the boxes from an institutional standpoint, they will not allocate to you. But I just think in terms of, I'm just trying to share there are other ways to do it and go about investing capital and doing the thing you love without just going that similar route of like, hey, let's just launch a fund, whether it's because some guys have gone IRA and separately managed account models and other guys have gone research based models. Some guys are working internally with like one client, maybe like a family office or something like that. There's just lots of ways to do it. That's all I was kind of, that's my only.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“I think there is a bifurcation in the market. You're either a high net worth hedge fund, and that's particular type of product, or you're an institutional hedge fund. And that's a different type of product with a different type of cost structure. I think for the high net worth guys that can self-promote, you know, they can get on Twitter, they can go on podcast. And it's amazing the democratization of just kind of people being able to get out there and pitch their investment process. That's fantastic. And those guys can get by on $5, $10 million. Now, they won't be living their life for Riley. They're really saving and they're probably pretty young and they're living humbly, but you can make it happen. And if you put up five, ten years of good performance, maybe get to 20, 30, 40, 50, who knows, maybe up to 100 million. And that's a business, right? That can work. On the flip side of that, institutional grade, hedge funds, I'm sure someone's going to totally disagree with me. But, you know, I would argue you need way more than that. You need probably 30 million out of the gate, 50 million out of the gate.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“To build up and start really small. I just think you should really start with the unscalable and work your way out as opposed to, I think a lot of guys are like immediately like, well, this is not scalable. I'm like, maybe you're 25. Like you're just trying to be trying to learn. You don't need to be scalable yet.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Exemplified that. And he started quite humbly as well, which everyone thinks they have to, I don't know, people think they could have put the suit on and they have to sort of become a big hedge fund or something to do gills and get out there. And I don't know if that's the case. I mean, for myself, I thought the same thing. And I had a hard, hard time scaling my hedge fund. And frankly, I've done better not having a fund, just doing deals and building a reputation as someone who can do this and is, I don't want to call it trustworthy, but just sort of like is decently professional and can transact. And both give us capital to either do deals or guys who need deals built, some bankruptcy attorney or some restructuring professional that they have a client and the client needs money and they need someone who's going to get down to business and who can actually close and things like that. So it just takes a long time to”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“First of all, his books have been phenomenal. I read it and I did the audiobook. I strongly recommend, I'm not huge into audiobooks, but I have to recommend the audiobook because he reads it himself and his voice is great. So highly recommended as a Christmas gift someone's looking for one. You know, he wrote an article about grave dancing. It was called grave dancing. It was basically this idea was, you know, and I'm a paraphrase, maybe someone who's a real estate person would just like totally break this part. But, you know, there are ways to come into situations, capital structures that are upside down, where you can inject some capital, be the first out, meaning you put in, let's say, just making round numbers some hundred million dollar project that's bankrupt. You put in a few million dollars, but you're first out capital.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Starts to get reported. I mean, the problem with a lot of stuff is it can be very, very small and it's hard. And then if you build your network, you do get inbounds. But that takes, you know, five, ten years of sending 10 or 30, you know, 10, 20, 30, 40 emails a day just to kind of like random solicitation emails like, hey, I see you join the Turnaround Association of America. I see you join the American Bureau of Bankruptcy, American Bureau, American Institute for Bankruptcy, things like that.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“If you were able to somehow pull all this data in, that would be great. I mean, one company, which is called ZLEAN, basically it helped people file mechanics links. So one of the ways you can do it is you can frankly just watch their blog about people filing mechanics liens and how they had such a great experience because they were able to protect their rights and they'll follow news stories. And then all of a sudden, even on something like Twitter, someone's filing against some school and you have some Twitter feed that might follow that, like a distressed Twitter feed that might say, oh, six flags might file for bankruptcy, things like that. And oh, all these guys that delivered literally this happened, roller coasters to six flags have filed like liens on their property because they were like still in the middle of erecting some ridiculous roller coaster. So it's just kind of like reading the news, man. And you could get more systematic about it. But I would say that for the most part, anything big gets.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Those liens and stuff like that. I don't even have that's like a fire hose at me. Like, I can't possibly find all this stuff. Sometimes what I'll do is I just have Google alerts set up for news articles about the stress. Or even if you have like the real deal, which is like, you know, really magazine, you'll see people filing court actions that'll get picked up in like local trade pubs publications. And you can just kind of read those stories and be like, oh, they're filing on this building. I should go to that county and look up that building. If there's one lien, there's probably 10 lanes. And you can kind of go from there. But you're right. It's so fragmented. I don't, I mean, if somebody, I think some firms out there that claim that they're like, you know, maybe building like tech to be able to gather all this information and therefore take advantage of it from an investment strategy so they can scale it. I don't know if one exists. I think you just came up with a business idea there, which is.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I mean, we follow most of the bankruptcy filings, so that's easy because it's filed in PACER and you can either, there are a number of services, like, I don't know, I think maybe court listener, which is like a free pacer set up by like a 501 charity. And I'm a fan of court listener because when I click on documents, the pacer costs money, you can get the documents for free on court listener. So those cases, and then the bigger bankruptcies, they have what are called claims administration agents. prime clerk, Stretto, KCC, or is it KKC? I think it's KCC. And there are a few others, but those are kind of the big boys. And so like Hertz was on, I think Prime Mineric, it might have been Stretto. I think it was Prime Clerk. But these are like, you can Google these firms and put in claims administration agents. They'll come up and you can look at the dockets of big cases like, I don't know, like a Chesapeake or a PG&E or Hertz. When you start talking about what you're talking about, which is...”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Then, if you think about we got involved in maritime, it's okay. What's the vessel worth, right? And where am I in the pecking order? Am I in front of the preferred ship mortgage behind it? How much is this vessel worth? Yada, yada, yada. So you're thinking about what the collateral is worth when you're buying leads. Those come up. We started buying them. I started buying them in bankruptcy. And then, you know, I've done a few outside. You need to know how to collect on them in state court and things like that if they're not in bankruptcy or not in chapter. And they're great. They're fun little playground, but it's hard for larger stress firms to make, there's not enough meat on the bone for them to be that interested in it. So again, it's like, you know, I met some guys recently and I've, of course, heard about people buying tax liens. Why do tax liens exist? Because they're so unscalable. Like, you know, once you start, get a certain amount of money, or if you're any certain institution, you would almost laugh at the idea of going and doing like.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, exactly. So you have Pacer when you're thinking of bankruptcies, when you're thinking of lien or like real property liens, you only need to go to that county where the real property is located. I think one of the things early on you learn when you're doing, I mean, I didn't come up through a lending. You know, I didn't come up through high yield or come up through fixed income or bonds. I came up really through just pure distress, doing claims and then moving on to loans. So I came from a different angle. And you think like, oh, well, just think about it this way. Anything that's a lien doesn't attach to, it can only attach to real property or can only attach to property. It can't attach to, you know, really can't attach to company. So you're always thinking of what your collateral. So anything with a lean is like, okay, what's my collateral on this? And, you know, if you're buying a mechanics lien, it's a building, what's that building worth? And so you don't even really need to know what's going on with the quote unquote better or the company that owns the equity. It's almost irrelevant.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Can't expect to make 30% returns, but probably make very, very healthy returns per unit of risk. And then, you know, there's chocolate cake. There's stuff that is pretty aggressive. And basically good, but like extremely high octane. And finding that balance in anybody's portfolio, I'm sure if anybody has a portfolio, they think about that their own position. So like, okay, here's some like stalwart stuff. And then here's some spec. And I've got to keep it in proper proportion. So that's what I kind of, that's how I jive those things is I don't know that the mutually exclusive or they're kind of I don't think they're talking past each other”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Very, very quote unquote safe, right? I mean, there's very little capital at risk, or I should say, like, what is it, permanent loss of capital potential? And then you go all the way to the other end of the spectrum and find stuff where you're just punting. And that's fine. It just depends on what proportion of your portfolio you're going to punt with. And I say punt, that seems mean. But there's stuff where you're buying something for a penny and it's just a litigation. So you can go the whole spectrum. And I don't think people appreciate that and about distress. They kind of just think it's all highly risky. And that's where does Peter Tiel say? He says, tell me something you know about the world that everybody disagrees with you about. And I think I wouldn't say people disagree with us about it, but there's not an appreciation that there's a whole Chinese menu or, you know, sort of buffet that you can eat from in distress. And there's salads that's good for you. Probably pretty safe.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Stuff that's really, really, I mean, maybe you can get compensated for it, but I would just be careful. And I guess for me, that comes with looking at companies. I don't, for myself, just from my time in the markets, believe or at least for me, it doesn't fit my investment philosophy that buying junk that's cheap is somehow better than buying okay stuff at okay prices. I almost think it's for me And I say that as a distressed person and you think, oh, how does that fit? Well, we're doing distress. We're normally, you know, there's a whole, I think what people don't understand about stress is there's a whole spectrum of risk. You can be the guy that takes very little risk and you're basically just being paid a premium because of complexity. But there's very little risk in what you're doing. You're on one side spectrum. And you like first lien loans, like riding dips, like things that are very...”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“It's experience. I see guys that are bottom fishers both in distress markets and in value markets and equities. I think it's a mistake to be too formulaic around the way you approach value. Anything that's paint by numbers is almost by definition suboptimal. Now maybe it helps you mentally stay strong, but it can't possibly be optimal investment strategy unless it helps you stick to the program, so to speak. And I think how do you marry those two ideas? So the idea of buying a Madison Avenue not on Canal Street, what they were basically trying to say is be careful of the stuff that's too good of a deal because it's probably fooled gold. And I think that's true in distress. You get stuff where it's like, wow, they're giving this thing away. It's like, yeah, it's probably fool's gold.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“I mean, yeah, I was all in, but I was a kid. You know, after I paid my tax, there was still a lot of money. And I was just like, I remember looking at the check and being like, wow. I mean, I got the check on my, I had kids quite young. My little girls are, I think it was her first or second. It must have been maybe it was her first birthday, but it was maybe her second birthday. It was on June 23rd and the check came cashier's check from the bankruptcy trustee and it was, you know, it was a million, over a million dollar check. And I was just like, wow, I got to do this the rest of my life. This stuff exists. It's just hard to find. It's a lot of work. You know, don't do it for the money because you could spend two years looking. And maybe their best idea is going to come in year 10.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“It was, it didn't look, didn't look great. It wasn't a bright time for him. He said, look, you send me a check for this stock certificate. I'll get a medallion signature guarantored and I'll send it out to you. And we did it. I mean, I wrote my own contract. I bought a block, paid four cents. I can't remember the actual share denominations, but I bought about 10%. A big equity block, you know, like a 10% of a company or 20% of a company or 5% of block of a company. So I was able to source that from that guy. I bought more later at much higher prices, but it worked out. I made like 22 times my money, 23 times my money. You know, once you've had the taste of making five times your money or 10 times your money or 20 times your money on something, you're done. You're going to work in investments.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Like, huh? Okay, well, I'm glad I didn't listen to his advice. And what I started doing is I realized the way this company went public, it was a reverse merger pipe. So there were literally physical shares. An actual stock certificate. So I actually bought a stock certificate off the former chairman. And for him, it's not that he wanted to sell it because he knew it wasn't worth anything. He kind of didn't think it was worth much. And I kind of told him, like, I don't know, man, I think the workout value in the bankruptcy is going to be good because they're pursuing this remission and restitution against a former insider. And then they're suing the law firm he worked at. And he said, look, son, you know, I'm like in my 60s. I don't want anything to do with this. This company was a dark time in my career because he was quite a famous guy in the ethanol industry. And they used his sort of gravitas to help build the financing. So when this company went under, of course, he had friends and colleagues in the industry invest in it, you know.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“The equity, there was going to be money returned to the equity, and the stock trades. So I bought up, I think, like two or three percent of the company, like not a lot. I didn't even have that much money. I think I had like 7,000 bucks or something in my Scott trade account. And I bought up some stock. And then I was telling a friend about it. And then I was trying to get a block. So I didn't know anything about trading blocks. I didn't know anybody in the industry. So I asked my one friend that I knew, I say friend, but the older gentleman that I knew that was like a hedge fund manager was like only hedge fund manager I knew. I didn't know any hedge fund manager. And this guy, I was like, you know, Wellington owns a 20% block of his company. You think you could call Wellington and ask them if they want to sell it. I think there's something here. I mean, it's small, but I think I could make like four or five times my money. And the guy said to me, you know, Tom, Wellington's like a very smart firm. If there's something there, they found it. So there's likely nothing there.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“20. So it's also 22, 23. You could get Pacer on your laptop. And so I was able to pull open the docket, look at the trustee's reports. It was a liquidating 11. And I could see like, hey, this thing's trading for at three pennies. It was like a 200 or 250,000 market cap. And I was like, hey, this company's going to have like a million bucks, like potentially to the equity holders. In addition to that, they have these what are called remission and restitution payments against the insider that defrauded the company. So long story short, I thought, well, this is pretty intriguing. I wonder if this is right. And it was in the footnotes. It was in the footnotes. It wasn't even listed as an asset, the remission restitution payment. So I call the trustee and he's, you know, just a nice, amiable, whatever, you know, just a local trustee. And he said, yeah, these numbers are right. Yeah, we're going for remission or restitution against the former inside of the fraud of the company. And I was like, well, that's interesting. And he hadn't even really put it together that, oh, by the way, there was going to be.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“So, if you're an enterprising investor, there is so, you know, the world is your oyster. There's so many things out there. And it doesn't have to be US, OTC, penny stocks, things like that. It can be anywhere. It can be anything. So FNX Energy, when I first found it, it was a true penny stock. It was selling for three cents. And I tried to buy, I found the story. It was on a net net screen. The numbers didn't add up on the net net screens because I saw the company file for bankruptcy. Said, oh, okay, this is probably nothing, but I'll pull open the doc to you what's going on in the bankruptcy. And so I did. This is one of the things I want to highlight is, I mean, I guess Patrick wasn't around when Buffett was around. If you had to go to the local courthouse, and even then, you would have to be in your jurisdiction because they didn't even have electronic files. I mean, when I was a kid, Pacer was only available in the clerk's office. But by the time, you know, I was the state when I was like probably 20, when I was 20 or maybe 22, they had to be over.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“I've had investors over the years that have stuck with me when things are good and things are bad. And it's not a free lunch by any stretch of the imagination. It is a lot of experience and time in the saddle. And, you know, it's kind of like you can't really teach it from a book. It's not in a book. And that really adds to the value of it. It's not like if you work for one of these firms for a year or two, you probably learn a lot and you probably can go out on your own and do smaller claims for yourself or for a club of people. But yeah, it's just experience, dude. And it's knowing the procedures. If you know a bankruptcy place is confirmed, confirmation to they're like, confirmation, then you have confirmation order. You know what the days are, and then you know confirmation to affect the date is 45 days. You know, you know those kind of statutory days, you can add it up, but you can always get extensions for all kind of reasons.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“It's very hard. And then some people will get claimants to say, Oh, you know, 80 cents and making a dollar like, gosh, you guys are really making a great IRR. I'm going to get paid in three months. I'm like, yeah, for everyone where it gets paid that fast, you know, we end up with a few that end up taking two years instead of three months or six months. So it's hard for us. I mean, we're trying to be an insurance company, really. We're trying to underwrite risk. And on the whole, be right. But we're definitely going to get it wrong a lot of times what you try to do is build in some buffer and also underwrite a pole portfolio of these things. So you try to knock it too concentrated on a docket and you try to not get too concentrated on a type of claim within a docket if it takes longer, if there's objections to it. So it's time. It's experience. It's time in the saddle. And also like whatever you think it's going to be double it. But no, in all seriousness, it's just a lot of experience. I'm very grateful that.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT
“Would you be selling it because you had a bankruptcy claim problem? No, it's because you probably have a cash flow problem. You're like, hey, this is $120,000 in working capital tied up in a bankruptcy. This could be two years. This guy's offered me $100. I mean, that's within our margin and I don't need to hire a bankruptcy counsel. So it is a service. So that's the main bread and butter business that we do. And we also do what's called a debtor and possession business, very similar to like the alt lenders that you see out there, not too dissimilar to people you've had on your show, like baby oak tree type situation. We're writing, you know, hopefully helping companies get out of trouble and restructure their balance sheet if it's over levered or sell parts to their business or restructure. And I think I could really get on a bankruptcy soapbox.”
2021-12-19 · We Study Billionaires · TIP406: Finding Hidden Treasure w/ Thomas Braziel · IDENTIFIED FROM THE TRANSCRIPT