How To Turn $100K into $4,000,000 with Distressed Investing
About This Episode
Shaan and Sam interview Thomas Braziel, a distressed asset investor who explains his strategy of buying bankruptcy claims in companies like Mt. Gox and FTX. The conversation explores the 'stake and sizzle' framework, the legal nuances of the claims market, and the high returns possible when professionalizing a niche investment category.
Episode Description
Show Notes
- 0:00Distressed investing 101
- 6:06FTX deal details
- 25:59First, Best, Worst, Weirdest
- 33:27Shop Madison not Canal
- 34:27Your first decade is tuition
- 38:25Where Tom puts his cash
- 41:46A position well bought is already half sold
- 43:35The ugly side
- 46:24How to handle public controversy
- 55:42Recommended reading
- 59:33E.P. Taylor
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Key Takeaways
Apply the 'stake and sizzle' rule: buy assets with a clear margin of safety (stake) while maintaining significant optionality for upside (sizzle) if conditions improve.
Look for 'invented categories'—niche markets where institutional capital has not yet arrived—to capture massive tailwind returns before the cost of capital compresses.
Recognize that investing is the opposite of operating; where entrepreneurs are rewarded for constant action, investors are rewarded for inaction, patience, and sitting on their hands.