As today’s preeminent doomsday investor Mark Spitznagel
describes his Daoist and roundabout investment
approach, ‘one gains by losing and loses by gaining.’
This is Austrian Investing, an archetypal, counterintuitive,
and proven approach, gleaned from the 150-year-old Austrian School
of economics, that is both timeless and exceedingly timely.
In The Dao of Capital, hedge fund manager and
tail-hedging pioneer Mark Spitznagel–with one of the top
returns on capital of the financial crisis, as well as over a
career–takes us on a gripping, circuitous journey from the
Chicago trading pits, over the coniferous boreal forests and
canonical strategists from Warring States China to Napoleonic
Europe to burgeoning industrial America, to the great economic
thinkers of late 19th century Austria. We arrive at his central
investment methodology of Austrian Investing, where victory
comes not from waging the immediate decisive battle, but rather
from the roundabout approach of seeking the intermediate
positional advantage (what he calls shi), of aiming at the
indirect means rather than directly at the ends. The monumental
challenge is in seeing time differently, in a whole new
intertemporal dimension, one that is so contrary to our
wiring.
Spitznagel is the first to condense the theories of Ludwig von
Mises and his Austrian School of economics into a cohesive
and–as Spitznagel has shown–highly effective investment
methodology. From identifying the monetary distortions and
non-randomness of stock market routs (Spitznagel’s bread and
butter) to scorned highly-productive assets, in Ron Paul’s words
from the foreword, Spitznagel ‘brings Austrian economics from
the ivory tower to the investment portfolio.’
The Dao of Capital provides a rare and accessible look
through the lens of one of today’s great investors to discover a
profound harmony with the market process–a harmony that is so
essential today.
About the author
Mark Spitznagel is the founder and President of Universa
Investments, an investment advisor that specializes in equity
tail-hedging–or profiting from extreme stock market losses as
a means of enhancing investment returns. In addition to hedge fund
investing, Spitznagel’s twenty-year investment career has ranged
from independent pit trader at the Chicago Board of Trade to
proprietary trading head at Morgan Stanley. He also owns and
operates Idyll Farms in northern Michigan.
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