The 17% Investment
Saleem Khatri, Co-Founder & CEO of Instavest, sat down with Thomas Lott, an Instavest investor, to find out why he loves investing. During the interview, Tom not only revealed a bit about himself but also showed how to make 17% with little effort.
Tell me about Thomas Lott? How did you become interested in investing?
Upon graduating college, I started my career in investment banking at Raymond James, covering energy and the tech industries. After 3 years as a sell-side distressed analyst at Merrill Lynch, I joined a (then) startup hedge fund called Owl Creek. Later, I was recruited to be a portfolio manager at Gracie Capital where I grew my book from $100 million to over $450 million in 7 years. I retired to Charlotte, North Carolina to spend more time with my family in 2009 but still actively invest with friends and family today.
What’s your investment philosophy?
I’m really conservative with money. I’m all about downside protection because, well, that’s my livelihood. I don’t look for anything special – really just the basic stuff - high quality companies, strong free cash flow, a talented management team. I do fundamental based analysis and have an average hold of 1-2 years. That’s not a firm rule - I’ve even held some stocks for 5 or 20 years.
What’s your take on the market right now?
Right now, there are only a few value opportunities to make real money. Most of the stuff has been picked over (already invested in) and there is a bit of uncertainty looming in the air. When I look at the market I see that oil is already down, so that won’t necessarily drive the market lower and quantitative easing is already done, so that shouldn’t hurt the market either. And I feel like an interest rate increase is priced in already. I do believe that Greece regaining stability that will have a positive impact on market conditions.
Why do you like and use Instavest?
I feel like it’s a great way for my friends to see my ideas. It’s a unique product. Why not offer ideas to beat the market? I realize that’s not always possible, but I think if you have a thesis and that thesis stays intact you’ll do really well in the long run.
Can you tell us about a recent investment you made on Instavest.
I call this my easy money trade because you can make 17% in 3 weeks via a tender offer for Global Net Lease (GNL) stock.
Global Net Lease is a private REIT that got NYSE listed last week.
What they do is not important however. This trade is an arbitrage on the odd-lot feature of their recently launched tender.
That is, for holders with 99 shares (or less), they can buy the stock at 9.00 today, tender them, and make 17% in 3 weeks. The company has plenty of liquidity to execute the tender, and odd-lot holders have priority.
So how does it work?
- Buy 99 Shares of GNL. Do not buy more than 99 shares.
- After your trade has closed (in 2-3 days), tender your shares by calling your broker. Tell them to tender your GNL stock.
- Next, tell your broker to check the “Odd-Lot” box. This should be automatic, but cannot hurt.
This should take less than 10 minutes of time, and is a free $150 (or 17%) in 3 weeks. Enjoy!
Thomas Lott is on Instavest, a website where investors post their investments and then other investors can replicate those positions and donate a portion of their profits.