Ep49: Paul Sheehan – A Deal is Never Done Until it is Done

Paul Sheehan has more than 25 years of experience in financial institutions, starting as a central banker at the Federal Reserve Bank of New York.  Subsequently, he was a Managing Director and Head of Financial Institutions for Lehman Brothers, Bear Stearns, and ING Barings, and founder and CEO of Thaddeus Capital, an institutional fund manager.  He continues to advise governments, sovereign wealth funds, and multilateral institutions. Paul is a US citizen and was educated at the State University of New York, Yale and Harvard. He is currently the CEO of Melmotte Brothers, which is based in Hong Kong and covering emerging markets in Asia, Europe, and Africa.

In this episode, Paul shares his worst investment ever story that was related to the sell-off of Bank Internasional Indonesia (BII) in 2008, a transaction that almost caused him to lose his firm plus $37 million worth of shares in 15 minutes.  Learn why it is essential always to watch the market and to remember that a deal is never done until it is done.

 

That concept of certainty is what leads you into trouble.”

Paul Sheehan

 

Topics Covered:

01:15 – Paul’s professional background 

03:03 – Paul narrates the series of events behind investing in an Indonesian bank

17:27 – He recounted why things didn’t go as planned and how it almost caused a massive amount of loss and considered his worst investment experience

25:21 – Sharing the valuable lessons he learned and the advice to avoid falling into the same situation

27:37 – Andrew shares a brief story when he sold his motorcycle and got the payment check only to bring it back to the bank because the payment was stopped

29:30 – Paul ends the episode with this advice: “Always talk about your losers because you don’t learn anything from winning.”

 

Main Takeaways:

Lesson 1: “Do not get complacent. Nothing is ever done until it’s done.”– Paul Sheehan

Lesson 2: “To say markets are discontinuous and the idea that if something goes wrong, you can get out, does not always apply even if I paid attention.”– Paul Sheehan

Lesson 3: “Always watch the market.  If the market sells off 25% in 20 minutes, someone knows something more than you do, you should consider getting out no matter what.”– Paul Sheehan

Lesson 4: “Never bet the firm.”– Paul Sheehan

Lesson 5: “Always talk about your losers because you don’t learn anything from winning.”– Paul Sheehan

 

Resources:

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About the author, Andrew

Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company that provides institutional and high net worth investors with ready-to-invest stock portfolios that aim to beat the benchmark through superior stock selection.

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