Author Archives: Devesh Shah

About Devesh Shah

Hi, I’m Devesh Shah and I’m pleased to meet you. As a professional, I was a co-inventor of the CBOE VIX Volatility Index, an equities and derivatives trader, and Partner at Goldman Sachs. My passions now mostly involve writing, teaching about investments, practicing yoga, playing the piano, and volunteering with a non-profit, Sponsors for Educational Opportunities (SEO), that opens up career and college pathways for underprivileged students of color. I am an alum of SEO. My hope for the months ahead is that I might share a few things I have learnt about investing.

The Pabrai Wagon Fund Overview and Interview with Mohnish Pabrai

By Devesh Shah

On September 29, 2023, Mr. Pabrai started the Pabrai Wagons Fund (WAGNX/WGNIX), a ‘40 Act mutual fund, offering retail investors a vehicle to invest in his stock ideas.

Mohnish Pabrai, quoting ChatGPT, is a value investor heavily inspired by Warren Buffett and Charlie Munger, with a focus on long-term, concentrated bets on undervalued companies. He founded Pabrai Investment Funds, where he manages private partnerships that mirror Buffett’s approach, often emphasizing the importance of patience and low-risk, high-return opportunities.

He has written two notable books: Continue reading →

Happy 94th, Warren! In celebration, I did not nothing

By Devesh Shah

The bouncing baby Warren Edward Buffett entered the world on 30 August 1930, the only son of Laila and Howard Buffett. In celebration of this 94th birthday, I looked seriously at my portfolio … and did absolutely nothing.

That was hard, but baby Warren would have wanted it that way.

Introduction

In this article, I look back at the market lows in October 2022. Continue reading →

Summer thoughts

By Devesh Shah

“Rest is not idleness, and to lie sometimes on the grass under trees on a summer’s day, listening to the murmur of the water, or watching the clouds float across the sky, is by no means a waste of time.” John Lubbock, The Use Of Life (1896)

I’ve let my brain disconnect from the urgent events of the day (month, season, year …) a bit, and gave it rein to go where Continue reading →

Artisan Partners and the international investing conundrum

By Devesh Shah

International Investing in Theory

Sometimes I wish I lived in Theory. In Theory, investing is such a reasonable, predictable activity. Theoretical Investors know that they’re buying pieces of a company’s future earnings stream. And, being rational, they know that they’re better off buying $1 worth of future earnings for $0.60 rather than for $0.90. In Theory, investors will logically and smoothly migrate from high-cost providers to low-cost providers of an earnings stream.

In Theory, if investors Continue reading →

Asset Allocation & International Equities, Part I: What is the right percentage allocation?

By Devesh Shah

Introduction: “Can you improve the returns of this endowment portfolio?”

In late 2022, I became a trustee of a private school endowment and was asked to join the investment committee. The committee consisted of a dedicated group of trustees with prudent investment sense. Although there were no permanent employees to manage the investment, a number of decisions had made the job manageable. The endowment worked with a sharp financial fiduciary who advised and then carried out the committee’s decisions.

Broadly speaking, the endowment had followed David Swensen’s Yale public model. Market timing and stock picking were completely avoided. Asset Allocation, Continue reading →

Options Based Funds – a deeper dive

By Devesh Shah

Introduction:

In the March 2024 MFO, I introduced the two main developments in Options in recent years.

Zero-Day Options and Options-Based Funds. We learnt about the history of options, the market players involved and benefitting from Options, and started getting deeper into the Funds.

In April MFO, through the 2nd and 3rd articles in the series, I hope to Continue reading →

The Options Conundrum: Fund Comparisons, Performance, and Risk

By Devesh Shah

Having looked at the qualitative rationale for why options-based funds are offered by fund managers and sought by some investors, it behooves us to quantitatively analyze options funds’ performance. There is no ONE BENCHMARK that can be used to compare ALL the options funds. That may be a good thing. It’s made me think of what a good way to create a customized benchmark for each fund might look like. The benefit of keeping things focused on the small picture is we can look at one fund at a time, in detail, without drawing too Continue reading →

Devesh, “My friends think I’m (a little) crazy” 2023 portfolio review

By Devesh Shah

In this article, I would like to talk about how I am allocating my portfolio. I want to note that every single fund I have positively highlighted in my MFO articles is also one of my portfolio holdings. My money is where my mouth is, and you, the reader, get the good with the bad. Take what’s useful to you and throw away the rest.

Market background in Q4 2023

For 18 months, from Feb 2022 and Oct 2023, it was Continue reading →

Insane markets, anxious investors, sane asset allocation

By Devesh Shah

A winter walk around the Central Park Reservoir

My friend “W” and I have gotten into a good habit of taking an hour-long walk around the Central Park Reservoir every few months. An hour’s walk is a perfect amount of time when two people speak the same language, are willing to not pretend or live in a fantasy world, are willing to engage in a two-way honest communication, and then want to return to their lives.

W is one of the Continue reading →