Oct

23

 Red Notice by Bill Browder is a true life story of present day Russian capitalism and the murder of Magnitski. The author's father was chair of the mathematics department at Chicago, and the two sons were chair of math at Princeton and Brown. Bill Browder inherited the parents intelligence and applied it to becoming the biggest investor in Russia. He found that Russian assets were being sold at 5% of their value and got Salomon to invest 25 big at the lows. The funniest part is how all his colleagues approached the news. "What's the spread between bid and asked?" "What are the advisory fees we can get out of it". He describes the market where the chits to buy the properties were sold and it's like an early version of the commodity exchanges with armed guards every where since all the transactions had to be in cash.

There are many intelligent observations he makes- eg Russians love children and it's the only place in world where you can bring a crying child into a restaurant and people will smile. That led to the importance of the adoption restriction we've heard so much about. When Magniski was murdered, Kerry refused to sign off on a bill to censure Russia but Browder put so much of a full court press on that finally it passed after the election when Kerry was going to become secretary of state anyway. So Putin in retaliation banned the adoption of Russian kids by US families.

It wasn't such a innocuous thing that the kids were involved in when they met with the Russian Prime minister but a cause celebre in Russia. It was amazing to see that Browder gave up his business to get vengeance for his lawyer Magniski who was beaten with a rubber hose shortly before he died. Above all, it the story of a very smart businessman and how he became a billionaire by buying headlong into an undervalue assets.

Anatoly Veltman comments: 

I assume Browder took a lot of profits out of Russia. And he lived, too.

Look, something had to be paid. He didn't. His employee did…

Vic started this thread with an ode to the wonderful risk taker/capitalist. Part of the truth was that privatization drive resulted in the wealth of the populace ending up in just a few hands. Browder included. Many a babushka in the vastness of Siberia have taken a cut in their $60 social security to buttress Browder's retirement. Browder's brand of capitalism was a lil' too much for the majority rank and file in that land. Yes, he did pay for that nation's former assets 5c on the dollar.


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4 Comments so far

  1. Gregory Rehmke on October 23, 2017 8:59 pm

    The insecure property rights system (or lack of system) of countries in transition adds the huge risks to investments. Some invest and have their money confiscated. Others invest and earn significant returns. If returns are too high though, critics claim the assets were somehow stolen from the country. Asset value comes from capable management (whether companies or natural resources). So multiple risks: maybe the companies and resources won’t be valued more highly than the purchase costs, maybe they will be higher value, but will be confiscated by those in power of arbitrary legal system, or, third option, the asset value is realized or appreciates…and the investor is accused of ripping off retirees.

  2. Andre on October 26, 2017 11:14 pm

    Its amazing the stellar series of hands browder is dealt in beginning of book aside from his abilities.

  3. Adam on November 6, 2017 12:38 pm
  4. Mimi Gerstell on November 7, 2017 10:44 pm

    Victor, two of your old squash buddies are arguing about your status (living or dead). I have assured David Maxwell (87) that you are alive, but because he saw a NYT obit re a different Niederhoffer, he remains skeptical of my report. OTOH, my brother Fred Gerstell (81) has been convinced of your survival even though he never uses the Internet. Any tiny message from you to me, I would forward to DM as absolute evidence.

    Victor replies:

    a reader asks if I am still alive… yes. but20days ago i suffered a stroke i am on mend

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