General correspondence: contact@inverteum.com
Inverteum (in-ver-tee-um) is a trading firm employing long-short algorithmic strategies to generate returns in both bull and bear markets. We strategically short sell and opportunistically deploy leverage with the aim of consistently beating the S&P 500.
Our name "Inverteum" comes from the fact that the best investments come from inverted thinking.
The Power of Inverted Thinking
Look, I'm not going to lie to you. Getting rich is hard. Mostly because most people are idiots. Not you, of course, dear reader. You’re clearly a discerning individual with impeccable taste in substacks. But other people. They’re the problem. And Charlie Munger, Warren Buffett’s less-famous-but-possibly-even-more-crotchety partner at Berkshire Hathaway, has built a fortune by, essentially, not being one of them.
His secret? Inversion. It's not some fancy Wall Street alchemy. It's just thinking backwards. Instead of trying to figure out how to get rich, Munger spends his time figuring out how to avoid getting poor. Which, let’s be honest, is probably a lower bar to clear for most of us.
Imagine you're playing golf. Most people focus on hitting the perfect shot, visualizing the ball soaring majestically through the air and landing softly on the green. Munger, on the other hand, is probably thinking about all the ways he could screw up: slicing it into the woods, shanking it into the water hazard, accidentally beaning a groundskeeper with a rogue Titleist. By meticulously avoiding these pitfalls, he ends up, you know, not in the woods, not in the water, and not facing a lawsuit from an irate groundskeeper. He might not win every hole, but he’s sure as hell not going to lose his shirt.
This applies to pretty much everything, especially finance. Take investing, for example. Everyone's chasing the next hot stock, the next Tesla, the next Bitcoin. They're pouring over spreadsheets, building complex financial models, trying to predict the future. Munger’s just sitting there, asking himself, “What are all the ways this company could go bankrupt?” He's looking for red flags, accounting shenanigans, unsustainable business models. He's not trying to hit a grand slam; he’s trying to avoid striking out.
This isn't rocket science, people. It's common sense, weaponized. Think about your own life. Want a happy marriage? Don't cheat. Don't lie. Don't leave dirty socks on the floor. The point is, avoiding the obvious pitfalls often gets you further than chasing some idealized, unattainable perfection.
Munger’s inversion principle isn't just about avoiding disaster, though. It’s also a powerful tool for understanding complex systems. By examining what could go wrong, you gain a much deeper appreciation for what needs to go right. It’s like taking apart a clock to see how it works – except instead of gears and springs, you're looking at human psychology, market dynamics, and the inherent fragility of highly leveraged financial instruments.
So, the next time you're faced with a difficult decision, try flipping it on its head. Don't ask yourself, "How can I succeed?" Ask yourself, "How can I avoid failing spectacularly?" It might not be glamorous, but it’s effective. And in the world of finance, effective is often synonymous with “rich.” Just don't tell everyone. Let them keep chasing the hot stocks. More room for us in the bunker when the market inevitably implodes.
Inversion As Described By the Man Himself: Charlie Munger
