INVEST FIRST AND ASK QUESTIONS LATER

Suddenly a familiar face loomed up out of the cocktail party mist. It was
Jim, a guy I knew from the past, a guy a lot of people refer to as Jim the
Trigger. When he is working, Jim is an investment manager like me.
People in the business call him the Trigger, as in hair trigger, because, as a
portfolio manager, he reacts so quickly to a story.This sobriquet is not
necessarily flattering; invest first and ask questions later is what is implied.“
Ready! Fire! Aim!” is the Trigger’s modus vivendi. In a bull market,
when the mongrels are running, it works great. In tougher times
like now, it’s not so effective.

The Trigger is a handsome guy in a sleek, sculptured, California sort
of way.The top three buttons of his fitted shirt are unbuttoned, and his
sports jacket clings to his shoulders. Our eyes meet. Jim’s are haunted
and a little mad, but who is not a little deranged on the terrace of The


The Trigger’s career has experienced a few undulations. He is always
into what is hot, but sometimes gets there a little late or just before
it gets cold.The Trigger is and always has been a momentum investor, a
player in the parlance, and his strength (and his weakness) is that he has
no memory for pain. He unfailingly gravitates to where the fast money
is, and he is capable of putting up enormous numbers in a hot, trending
market. However, in the past he has often followed the lemmings over
the proverbial cliff. I like him, though, because, in the heat of each moment,
he truly believes his own bullshit and doesn’t pretend to be anything
other than what he is—a stock jockey.

I first knew the Trigger in the early 1980s when his aggressive
growth-stock fund was loaded with whisper stocks like the small oil exploration
companies and drillers with names like Three Guys and a
Rig. He was up 40% in 1979 and 65% in 1980, and the money came
pouring in. But then in 1981, when oil overnight went from being
black gold to just another commodity, the Trigger’s fund was down
55%. He almost lost his job, as I remember it, but in 1982 and 1983, he
came back and shot the lights out with the small tech and emerging
growth stocks, his “beloved athletes” as he called them. In those days he
would go to a company presentation, meet the adolescent storyteller,
listen to the pitch, come out saying,“The kid’s a gifted natural athlete, a
winner,” and then buy a couple of hundred thousand shares without
ever seeing a number.

Subsequently, when his beloved athletes died horrible deaths and
the moon balls crashed in the mid-1980s, the Trigger actually did get
fired, but he has a great sense of the game and he always gravitates relentlessly
toward relative strength.Value was in and growth was out, and
he knew he had to change and find new faces to fall in love with. He
caught on with a value investing firm called U3—for Undervalued,
Underowned, and Unloved—which also did risk arbitrage. However,
value was too slow for his blood; the Trigger needed emotion and momentum
in his life. It was hard for him to truly fall in love with a dirty
industrial dog just because it was cheap.

I remember at the time his telling me, “Value sucks and Ben Graham
was a loser. Buying cheap stocks on book value analysis is for
small-minded accountants. I miss the adrenaline rush from an up stock
or running in the shorts with a tail.”This was sacrilege, because (just in
case you don’t know) Benjamin Graham is the god of value investing
and wrote the bible, a book called Security Analysis. So the Trigger left
U3 for an emerging markets boutique, and for a while he actually lived
and operated out of Hong Kong and Eastern Europe. Then came the
Thai baht and Russian debt busts, and the emerging markets became
the submerging markets.

Almost as if it were foreordained, he migrated back to tech in the
late 1990s.Tech was the perfect milieu for the Trigger. Before tonight, I
had last seen him in late 1999 when he ran a tech fund for a big, very
aggressive mutual fund company in Denver.Those were the days when
the new-issue market was on fire, and the Trigger was giving spellbinding
speeches around the country about tech, Internet productivity, and a
new era.The public was pouring money into his fund, and the Trigger
was riding high on the hog. That day he had come for lunch with a
young, statuesque woman on his arm who drank Stolichnaya straightup.
I wondered why he had brought her because she was obviously
bored with the stock talk, although occasionally she shot him languid,
but amorous glances.

The Denver mutual fund company stocked smart, quick, fast-talking,
momentum guys and gals who had heard every story long before I did.
I remember going to visit them once during those days, sitting in a conference
room with half a dozen kid portfolio managers who looked so
young and fresh and innocent that you expected them to still have
braces on their teeth, and realizing that I had nothing to say that interested
them.They thought I was a useless, old fuddy-duddy, and that afternoon
I felt like one. They didn’t care a P/E ratio about valuation,
fundamental change at the margin, or the economy.They wanted stories
about up stocks.They wanted action, stocks on steroids. As the meeting
went on, I realized they weren’t at all innocent.They were baby-faced
killers and it was I who was the innocent. The Trigger’s fund, stuffed
with new issues,was up 85% that year.