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Michael Eisenberg
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Michael Eisenberg is a venture capitalist with Aleph. I am also a partners Benchmark Capital, while blogging at Six Kids and a Full Time Job ( and at He adds a perspective -- often on Internet stocks -- from an earlier-stage professional... More
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  • Four Money Quotes From "The Active Quest for Alpha" - With Headlines
    I excerpted some quotes from the above Seeking Alpha interview with some commentary. I encourage you to also read Umair Haque's New Capitalist Manifesto along with it (My SA review of the book is here).

    Wall Street and the Media are filled with conflict of interest. There is no such thing as objective media and and prop trading is more profitable than advice.
    "Larry Swedroe (LS): First of all, it's important to understand that the education system has entirely failed the American public and I'm assuming that's true in other countries as well. The odds are great that if you don't have an MBA, you haven't taken even a single course on capital markets, leaving you to seek your investing advice from people that have a direct conflict of interest: Wall Street and the media."
    The market is a  herd and few people behave like Buffet advises "Be fearful when others are greedy and greedy when others are fearful."
    "Funds are often created to encourage people to chase the current hot sector. That's why there were so many tech funds in 1999. All of these sector funds, double leveraged and inverse funds, they're all terrible products. They're meant to be sold, not bought. No one should own them. They lead to taking uncompensated, idiosyncratic risk and there's no reason to think anyone can identify which sector will outperform the market long-term. They don't offer any additional exposure to risk factors that add to your level of diversification. And there's no reason to think any sector-specific information you have is value relevant. If you know it, so does Goldman and Morgan Stanley and it's likely already baked into the price."
    The clothes you are buried in have no pockets but your reputation and legacy live forever. It is hard to beat the pros.
    "The sad thing is many of the people taking these unnecessary risks with hedge funds and the like are high net worth individuals. They've already won the game. They don't need to try and generate alpha. They have enough to live off of comfortably without taking risks. If they blow up and go from rich to poor, it'll be unbearable, whereas if they double their money, it'll probably make little difference to them. All they'll get is bragging rights. And no one ever had "I achieved alpha" inscribed on their tombstone."
    Anything important in the 21st century will involve helping humanity and developing awesome innovations and not trading electronic paper.
    "I think that's the most important message in the book. If you're a passive investor, you don't have to spend your time listening to Cramer or reading Money magazine. You get to spend your time on the things that really matter in life: spending time with your family, doing community service, in short, winning at the game of life."

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Apr 11 8:53 AM | Link | Comment!
  • Selling Pressure in Vocaltec
     ElanZiv sent me this note:

    "An entity called Lehman Brothers BankHaus AG (clearly the german sub of Lehman) has been selling down a big position in VOCL.    Based on two SEC filings, between October 23 and January 22nd, they  brought their ownership down to 168,425 shares from 425,684.  They likely have to sell due to bankruptcy."

    Disclosure: Long VOCL
    Tags: CALL, Lehman
    Jan 25 3:39 PM | Link | Comment!
  • Babylon Up Almost 5% On Tel Aviv Stock Exchange Today!

     I have written a lot about Babylon and Incredimail, which are driven by the same fundamental business model: Google ad clicks and search. I am not sure what drove it, but Babylon (on Tel Aviv Stock Exchange) had a huge move today, closing up 4.59%. I can only assume that Tel Aviv is finally starting to catch up with the move in MAIL. MAIL will pay out its dividend 8 days from today to Shareholders of record as of July 13th. I wonder whether Babylon may follow the same path, given the cash on the balance sheet and the profits it is throwing off. See today's Babylon chart below.

    Chart of Babylon from July 20, 2009

    Full Disclosure: Long Babylon and MAIL

    Tags: PERI
    Jul 20 12:22 PM | Link | Comment!
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