Mark Cuban: How to Get Rich + Success and Motivation

You may have seen me quote Mark Cuban on Twitter the other day. This is Cuban's take on entrepreneurship in America from his, "How to Get Rich" post: 

"...The nature of our country’s business infrastructure  is that it is destined to be boom and bust. Booms are when the smart people sell. Busts are when rich people started on their path to wealth." 

Kind of applies to trading and "investing" as well, doesn't it? The smart money and experienced traders are buying or preserving their capital and looking for signs of coming strength at the trough, following a panic or bust (bear market). 

The bit players in the crowd are mostly on the sidelines, waiting for things to get exciting before they plunge in. They are driven largely by emotions and their knowledge of the market landscape is, shall we say, less than that of the experienced speculators.

When the boom is in full gear and evident to all, savvy veterans are lightening their positions and selling into a liquid marketplace that will take the inventory (stocks, etc.) off their hands. 

Novices generally buy high and sell low, losing a great deal of their money in the process, while the expert traders buy at a reasonable, or high, price and sell higher. 

This applies to business deals as well, as Mark points out in his post. But you need to put in a lot of hard work and learn your business well before you can identify the right time to invest or start building your company. 

Whatever you have set out to do, there's no quick and easy path to excellence and success. If you want to learn more about what Mark Cuban went through to get to where he is today, read his post, "Success and Motivation". I suspect there are lessons here for all of us, whether you're an artist, a writer, a trader, or an entrepreneur. 

Related articles and posts: 

1. Mark Cuban interview: "Buy and hold is a crock" - Finance Trends.

2. Howard Lindzon interviews Mark Cuban (StockTwits TV) - Finance Trends.

Mark Cuban interview: "Buy and hold is a crock"

Entrepreneur and Dallas Mavericks owner, Mark Cuban recently chatted with Alan Murray at the Wall St. Journal about investing, entrepreneurship, job creation and innovation, patent trolls, and the NBA. 

Mark kicks things off on a frank and "controversial" note by stating up front his belief that, "buy and hold is a crock of shit", and the idea that one should be almost fully invested in the markets at all times is similarly bunk.

As Cuban puts it: "Unless you really have a commitment to something, just keep your money in cash - knowing that at some point in time there's going to be a week or two like we've had [recent volatility and stock market plunge]."

Mark explicitly states that these are his times to look for opportunity in the market, and implicit in his statements are a belief in the value of market timing and his own ability to find relative bargains in the capital markets. He likes to find things that are cheap, but is not seeing the bargains he needs in leading shares yet. You'll hear more about what he's doing and his philosophy on the current realities of trading and investing in the interview.

What's really interesting to me, beyond the investing discussion, are Mark's comments on patents and the current business environment. Cuban says patent laws and patent litigation are having a "huge", negative effect on the economy and job creation, particularly with technology companies. In fact, he flat out says, "You don't need patents...ideas are easy", citing his own experience with Broadcast.com and its technology patents in the dot com boom environment.

Note that Cuban's remarks on defensive purchases of patent troves came just ahead of the Google - Motorola Mobility deal (driven largely by patent protection needs for the Android OS in the litigious mobile phone industry) announced this week.

There are a few things that I may not agree with in this interview (mostly Mark's ideas about government grants for job creation), but I really like the fact that Mark speaks his mind and is just so off the cuff and straight up with his remarks. Really refreshing at a time when you see so many mealy-mouthed individuals hemming and hawing with their measured, pre-planned responses in interviews. Great stuff, watch and enjoy.

Related posts: 

1. Howard Lindzon interviews Mark Cuban on StockTwits TV - Finance Trends.

2. Billionaires are different than the rest of us - Abnormal Returns.

Howard Lindzon interviews Mark Cuban

 

Could have sworn I posted this StockTwits TV interview with Mark Cuban months ago, but maybe I just retweeted it. In any case, enjoy this laid-back and excellent discussion with the highly visible (and vocal) Mavs owner and entrepreneur. 

Entourage guest spots, investing, free agent talks with Lebron, the birth of Broadcast.com and the rise of user-generated web video... it's all here in this interview. 

Plus, more from Mark and Howard in this long/short interview segment.

Oh, and congrats to Mark and the Dallas Mavericks on their first NBA championship. The victory is well-earned. 

Related articles and posts: 

1. 10 Questions for Mark Cuban - Forbes interview.

10 questions for Mark Cuban - Forbes interview

Thanks to Leroy Gardner and Get Rich Slowly for highlighting this Forbes interview with highly-visible entrepreneur and billionaire, Mark Cuban.

Here are a few lessons on "building and keeping a self-made fortune" from, "10 questions for Mark Cuban":

"...You have $100,000--where do you put it?

First I pay off all my credit card debt and evaluate paying off any other debt I have. What I have left I put in the bank.

Then I try to create as much transactional value as possible from that cash. I look at my annual budgets for everything and anything, and I look to see where I can save the most money on those items. Saving 30% to 50% buying in bulk--replenishable items from toothpaste to soup, or whatever I use a lot of--is the best guaranteed return on investment you can get anywhere.

Then whatever I have left I keep in the bank and let it earn nothing. Why? Because then its available for when I get a good opportunity.

Every five years or so there is a bubble bursting or amazing deals available because of a change in the economy. Anyone who just kept their cash in the bank rather than in stocks over the past five to 10 years could be buying the home of their dreams for half price in most of the country..."

Pay close attention to Mark's thoughts on essential reading for entrepreneurs and the difficulties associated with starting a business in the US right now. Some key insights packed into a quick interview.

Photo credit: Mark Cuban via Portfolio.com.