Ted Weschler, known for his $5 million bid to dine with Warren Buffett at charity auctions in 2010 and 2011, is not just a philanthropist but also a savvy investor. His journey from participating in charity lunches to joining Buffett’s team at Berkshire Hathaway Inc. is as unconventional as it is inspiring.
Weschler, now a key figure in managing Berkshire Hathaway’s investment portfolio alongside Buffett, revealed the growth of his retirement fund from $70,000 to $264 million in less than 30 years. This extreme increase was disclosed in a Washington Post interview with columnist Allan Sloan in late 2021, following ProPublica’s June 2021 revelation of Weschler’s nest egg size based on federal tax returns.
Weschler’s journey began in 1984 when, as a 22-year-old junior financial analyst at W.R. Grace and Co. earning $22,000 a year, he opened an individual retirement account (IRA). By maximizing his contributions and leveraging his employer’s match, he grew his account to over $70,000 by the end of 1989. That year marked a turning point as Weschler left his job to start a private equity firm, subsequently transferring his savings into a self-directed IRA.
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In 2000, Weschler launched a hedge fund Peninsula Capital Advisors, which delivered compounded annual returns of 22% for its clients between 2000 and 2011. Before joining Berkshire in 2012, he became known for his $5 million charity lunch with Buffett in 2010 and 2011. Despite experiencing a significant setback in 1990, where his IRA lost 52% of its value, Weschler viewed this as a learning opportunity rather than a loss.
Weschler’s strategic decision in 2012 to convert his IRA into a Roth IRA involved paying over $28 million in federal income tax. This move exempted him from future taxes on withdrawals from his retirement account.
The investor’s successful approach to retirement savings was not solely focused on individual stock picks. He emphasized the value of index funds, particularly for those who may not be as invested in studying the market. He noted that his $70,535 savings in 1989, if invested in Vanguard’s S&P 500 index fund, would have grown to about $1.6 million by June 30, 2021.
“In a perfect world, nobody would know about this account,” Weschler said told the Washington Post. “But now that the number is out there, I’m hopeful that some good can come of it by serving as a motivation for new workforce entrants to start saving and investing early.”
Weschler’s tenure at Peninsula Capital Advisors sheds light on his investment acumen. Among his notable successes were investments in Cogent Communications and W.R. Grace. Peninsula’s stake in Cogent Communications grew significantly in value, from $159,000 in 2003 to $51 million by 2011. Peninsula’s shares in W.R. Grace also surged, reaching a value of $358 million from an initial $33 million.
Weschler’s financial journey exemplifies the power of strategic investment, long-term planning and resilience in the face of market fluctuations. His experience provides valuable insights for people looking to optimize their retirement savings and investment strategies.
In addition to traditional investment strategies like those employed by Weschler, investing in startups has emerged as another viable avenue for investors seeking to grow their portfolios. Startups offer the potential for high returns, albeit with higher risks, and can be an exciting way to contribute to innovative and disruptive businesses in their early stages.
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TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
