Fora da Curva - Pierre Moreau, Florian Bartunek and Giuliana Napolitano

How to create your own investment style? And even more, how to succeed with it? To this end, the book "Fora da Curva" (Out of the Curve) brings, through real-life accounts, what the great Brazilian investors did to get where they are now.

It was through crises and drastic scenario changes, surviving the strong dollar volatility and interest rate variations that these investors were forged, and they are ready to share their stories, failures, and achievements with the readers.

Ready to chat with them? Then grab a cup of coffee and join us!

About the book "Fora da Curva"

The book "Fora da Curva" by Pierre Moreau was released in 2016 and seeks to present a little of the trajectory of great investors in Brazil, as well as to show young people the many career possibilities in the financial market.

It has 216 pages and is divided into 10 chapters, each with an account of the experience of one of the "out of the curve".

About the author Pierre Moreau, Florian Bartunek e Giuliana Napolitano

Pierre Moreau attended Harvard Business School and Harvard Law School and earned his master's and doctorate degrees in law from Pontifícia Universidade Católica of São Paulo. He is the founder and partner of Moreau Advogados.

Florian Bartunek graduated in business administration from the Pontifical Catholic University of Rio de Janeiro. He is the founder of the fund manager Constellation, and advisor to several educational groups, such as Somos Educação and Fundação Estudar.

Giuliana Napolitano has a degree in journalism from ECA-USP. She works at Exame as the financial editor. She is responsible for the real estate and investment editions.

To whom is this book indicated?

The book "Fora da Curva" is suitable for those who are starting a career in the financial market or planning to open their own business.

Main ideas of the book "Fora da Curva"

Each of the interviewees in the book brings their own views on investing, but some in common were:

• Learn from the great investors, and develop your own investment style;
• Always have a long-term vision;
• As today the Brazilian market is more mature, the in-depth study of the companies has become a prerequisite for success;
• Avoid big risks that can wipe out your assets;
• Try to work with competent and honest professionals, they will be the most important factor for the success of the investment;
• Seek to act and think differently from the market.

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André Jakurski

André Jakurski is one of the founders of Pactual Bank, where he worked for 14 years as an executive director. He left in 1998 to found the fund manager JGP, which had billions of dollars in net worth in 2015.

Before that, he got an MBA at Harvard and was called to work at Unibanco, where he worked in almost all areas.

According to Jakurski, we should have a defensive strategy in investments, and avoid those that can compromise our assets.

"If you can't make money during the hours you are awake, there is a problem."

André says that investors who spend sleepless nights or interrupt their sleep several times during the night compromise their health. In this sense, he recommends scheduling buy or sell orders to avoid losing sleep.

Some more of Jakurski's ideas are:

• It is not possible to predict the future, but we can predict possible scenarios and adapt as they materialize;
• In bullish periods it is easy to make money. Anyone who makes money only when the market is doing well is not a good manager;
• Governments do not have the ability to direct the economic activity of a country. When they try to do so, they create artificial scenarios that generate crises.

André Jakurski indicates the reading of some technical books to create the fundamentalist basis necessary to invest:

• "Security Analysis" by Benjamin Graham and David Dodd;
• "Technical Analysis of the financial market", by John Murphy.

Antonio Bonchristiano

Antonio Bonchristiano was elected Young Global Leader by the World Economic Forum. He studied politics, economics, and philosophy at Oxford and is the executive president of GP Investimentos. His major work has been with private equity.

Antonio has several successful cases with private equity working for GP. One of them is the company Submarino, which gained 900% in six years. He says that this return was relatively normal, since in his type of strategy only 20% of the investments work out, and they outweigh the losses of the other 80% that do not work out.

According to Bonchristiano, if an investment has gone wrong you should get rid of it as soon as possible. We should not spend time on something that is not an opportunity. In this sense, failure comes from a combination of factors:

• Poor sector analysis;
• Failed due diligence
• Weak capital structure
• Inadequate staff.

In private equity, investors act effectively in the management to improve and enhance the value of a company. Since managers of this type of fund do not have the structure to train employees, André advises those interested to:

• Work in a consulting company or investment bank;
• Get to know sectors, investors, and entrepreneurs;
• Follow the market;
• Take an MBA.

He observes that, in his kind of routine, sports are essential to preserving health and avoid excessive stress. Another tip is to "compartmentalize," that is, to separate work from personal life.

Finally, Antonio Bonchristiano indicates reading books related to technology companies, because he believes they can revolutionize traditional businesses:

• "Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future", by Ashlee Vance;
• "How Google Works", by Eric Schmidt and Jonathan Rosenberg.

Florian Bartunek

Florian Bartunek started his career at Banco Pactual and then founded Constellation, an equity fund manager with billions of reais in assets. He has a degree in business administration from PUC in Rio de Janeiro.

At Pactual, Bartunek used to call and research the most relevant companies, at a time when few analysts were interested in doing so. With these practices, he got the position of head of the general analysis department at the age of 22.

Florian says that, at the end of the day, it is the bosses that make the difference in your career. Working for Jorge Paulo Lemann, for example, he learned that there is a difference between process and result. What matters is not the result of the investment being good, but the process, because it is the process that will guarantee success in the long term.

Florian Bartunek brings some concepts that he believes are important to invest in:

• Invest in the best companies: those that have entry barriers for other companies. Sector leaders, with large market shares, are ideal;
• Study the company's partners and entrepreneurs: the ideal is that they are family companies, with owners that participate in the board and in the company's day-to-day activities. This way there's a better alignment of information.
• Choose companies with predictable results: how will the company be a decade from now? Coca-Cola, for example, will probably continue as the market leader, it is predictable;
• Build Noah's Ark in times of crisis: that is, make conservative financial management, control costs, reduce debts, and try to consolidate yourself as the leader in your sector.

Bartunek states that a mistake with investments can be corrected by selling the shares as soon as possible. A mistake with people, however, is not so simple. New employees must be thoroughly evaluated: if they have the company's profile and the necessary competence.

Finally, Florian indicates the reading of some books for those who want to invest:

• "Common Stocks and Uncommon Profits". It has investment lessons from Philip Fisher, the genius who inspired Warren Buffett;
• "Sam Walton: Made in America", by Sam Walton. Investors should understand business.

Guilherme Aché

Like Florian Bartunek, Guilherme Aché started his career as an intern at Pactual Bank. With a degree in Economics from Cândido Mendes College, he became head of the equity analysis area of the bank at the age of 23.

Guilherme brings the vision that in the 80's and 90's, the market was more speculative, there was a lot of macroeconomic uncertainty, and the investments were more immediate.

Nowadays this is no longer the case, it is necessary to study the company. To understand its management, "the third derivative of value creation", its competitors, both national and international.

According to Aché, we must avoid the big mistakes that make us lose everything. In other words, avoid exaggerated risks and have an obsession to understand how companies work. If you cannot dedicate yourself to this, he advises leaving the decision to good managers.

About private equity, his investment area, Guilherme observes two things:

1. In Brazil, private equity is an alternative to the stock market, which, because it is small, does not offer the possibility of growth from a certain equity.
2. Working in private equity funds allows investors to get to know the reality of business in Brazil, making them better prepared.

Finally, Guilherme Aché recommends reading great investors, such as Warren Buffett and Charlie Munger, through books:

• "Charlie Munger: the Complete Investor", by Tren Griffin;
• "The Essays of Warren Buffett: Lessons for Corporate America", by Warren Buffett and Lawrence A. Cunningham.

Guilherme Affonso Ferreira

A graduate from the University of São Paulo, Guilherme Affonso Ferreira is a production engineer and one of the biggest names among individual investors in the stock market.

He founded the fund manager Teorema in São Paulo and is a member of the board of directors of large companies such as Arezzo, Petrobrás, and Gafisa.

Guilherme had a very practical sense. Two cases that reflect this are:

1. At one point he bet on Unibanco, even with poor prospects for smaller banks at the time. His thought was "no country lives without banks, some of them will turn around". He studied hard before choosing and the bet worked well.
2. In another situation, the government cuts fertilizer subsidies. While many were selling shares of companies in this sector, he was buying. His thought was "Brazil has a huge agricultural potential, it will not abandon fertilizers like this". It also worked out well, and he profited from the appreciation after the fall.

One of his values is to buy shares of companies in difficulty, but that he believes can be fixed. In this way, he participates in the "turnaround" in the company's situation. But for this, he studies a lot about the company: about two and a half months before each purchase.

For him, what matters most are the people in the company, not its financial situation. Effective managers will be able to turn difficulties around. The question is to trust them.

In his view, we should have a "wish list": what we would like the company to do to increase its value. As long as this list is long, the company has the potential to appreciate in value, and it is worth holding on to the shares.

Guilherme Afonso indicates some reading outside the investment world, such as the book "Os Tambores de São Luís", by Josué Montello, which brings important aspects of Brazilian history.

José Carlos Reis de Magalhães

Zeca Magalhães, as he is known, has a degree in business administration from Fundação Getúlio Vargas in São Paulo. At twenty-four, he founded his own asset management company, Tarpon, which owns the largest market share of the food company BRF.

For Zeca, the risk is the probability of a business permanently deteriorating and no longer generating value to shareholders. With this perspective, he does not see Tarpon's investing 55% of its equity in BRF as a risk, as he knows the company's fundamentals and its potential.

In this sense, one of his tips is to do an in-depth analysis. Understanding in detail a few companies, their evolution, and their strategies, is something that guarantees a sustainable advantage in investments.

In the case of BRF, he followed its entire restructuring process and is aware of its strengths and weaknesses and the company's potential.

In his perspective, the risk is precisely in doing what everyone else does. Diversifying in the same stocks, having the same investors as everyone else.

Finally, according to Zeca, we should choose stocks by their quality, not price. A company has quality stocks when it has barriers to entry for other companies, such as:

• Effective management;
• Strong market share;
• Relevant cost advantage.

Zeca indicates the reading of some books to invest better:

• "Purpose: The Starting Point of Great Companies", by Nikos Mourkogiannis and Roger Fisher, as Zeca believes that to be successful, the company has to have a purpose;
• "Thinking, Fast and Slow", by Daniel Kahneman, for us to understand what influences our decisions and our behavior, and thus have advantages in the investments.

Luiz Fernando Figueiredo

Luiz Fernando Figueiredo was a director of the Central Bank for four years, and founding partner of the asset management company Gávea. With a degree in administration from Faap, in São Paulo, he is currently the president of Mauá Capital, an asset management company he founded.

A large part of his experience was acquired in the day-to-day operations of companies, and not through academic studies. This experience and his success in the market led him to be called to work as a director at the Brazilian Central Bank.

There, he acquired a strong macroeconomic vision, which guided his future investments.

In this sense, the decisions made by Mauá Capital always start with a deep macroeconomic analysis. Forecasts are made, for example, for the exchange rate, the economy's performance, interest rates, etc.

Luiz Fernando affirms that in calm times, it is possible to see trends and take advantage of them. In times of crisis, the market becomes volatile, and it's better to make more opportunistic investments. Fixed income bonds, for paying high-interest rates, are an option in Brazil.

He also observes that, for lay investors, good advice is essential to avoid big mistakes. Therefore, we should study the advisors' track record before hiring them.

Luiz Fernando Figueiredo indicates some reading for those who want to invest, such as:

• "Great by Choice", by Jim Collins and Morten T. Hansen;
• "Central Banking in Theory and Practice", by Alan Blinder.

The former is "a course on how to run a business". The second is a book to understand how the Central Bank works, and thus to be able to do good macroeconomic analysis.

Luis Stuhlberger

Luis Stuhlberger is a civil engineer from USP, and specialized in administration from Fundação Getúlio Vargas. He worked at the brokerage house Hedging-Griffo, which was sold to Credit Suisse, where Luis became a director.

He currently works at Verde Asset, an asset management company he founded that specializes in multimarket funds. The Verde fund, created before the company was founded and which inspired it, reached a return of 12, 041% between 1997 and 2015.

This was only possible because Stuhlberger, throughout his career, consistently got his assumptions about macroeconomic scenarios right.

From this perspective, he states that managers are successful when they can anticipate scenarios and find golden opportunities.

To do this, one must fight the inclination to buy on the upside and sell on the downside, which is only possible by studying the market and the cycles of the economy.

Luis also defends that it is valid to take certain controlled risks. For him, it is acceptable to lose a little today if in the future there are great returns.

Finally, Luis Stuhlberger states that:

"Sometimes investing in stocks is like a bumpy road. You can't give up in the middle of the road."

Even good companies go through bumps, so we shouldn't give up before it's time.

Some reading pointers from Stuhlberger are:

• "O valor do amanhã" (The value of tomorrow) by Eduardo Giannetti. It helps to understand Brazil, and why the future is so uncertain there;
• "Predictably Irrational", by Dan Ariely. Analyzes aspects of behavioral finance, and how people's decision-making process works.

Meyer Joseph Nigri

Meyer Joseph Nigri is a civil engineer from USP and works in the real estate market. While still in college, at the age of 22, he founded the real estate developer Tecnisa, a company that had over one billion reais in revenues in 2015.

As an intern in construction companies, Nigri learned a lot about the real estate market, which allowed him to found Tecnisa. The company has had great success, and he lists his knowledge of financial mathematics - at a time when few had this knowledge - as the most important factor for this.

Meyer says that in the real estate market there are some fads, but that logic should prevail over logic.

One example is the trend that has occurred in recent years to build compact apartments. Facing this trend, Tecnisa did exactly the opposite: "long space" apartments larger than the average.

With this approach it saved on scale, providing a more advantageous cost per square meter for the client.

"We should do what we think is feasible, not what the market asks."

The main tips he gives to investors interested in the real estate market are:

• Take the opportunity to invest in real estate in crises. It is possible to get good prices, but the investment must be long term;
• Look for other options in the real estate market, such as fixed-income securities: LCIs and CRIs;
• For security, set aside emergency reserves and invest them in conservative businesses.

Finally, some of Nigri's reading recommendations are:

• "Man's Search for Meaning", by Viktor Frankl. It gives the idea that those who have a purpose, survive, whether in life or in investments;
• "When All You've Ever Wanted Isn't Enough", by Harold Kushner. It is a self-explanatory title: we should not seek to have everything, but what really matters.

Pedro Damasceno

Pedro Damasceno has a degree in Economics from Universidade Cândido Mendes, in Rio de Janeiro. He is a partner at Dynamo, a large Brazilian investment manager, where he is responsible for analyzing companies and approving investments.

Damasceno's first internship was at the Montreal Bank, where he learned to analyze the fundamentals of companies. Through this experience, he became capable of applying an investment strategy known as value investing.

In this strategy, the focus is to approach companies to get to know them deeply. He affirms that it is not enough just to look at the computer screen, it is necessary to spend the soles of your shoes. At Dynamo, 80% of the time is used for these analyses, based on the three fundamental points of the companies:

• Their results;
• Their managers;
• Their strategy.

If you cannot do these analyses yourself, find a fund manager to do it for you.

Two other points to be considered before investing, in Pedro Damasceno's opinion, are:

1. Scaled companies have market barriers, and therefore are good investment options. In Brazil, for example, Cielo and Redecard have a very large capillarity and distribution advantage, since they can serve the whole territory.
2. Take advantage of public documents to learn more about the companies, such as corporate documents. Through them, we can find out if there is alignment between minority shareholders, managers, and owners of the company. If there is no such alignment, the future of the company may be compromised.

Pedro Damasceno indicates some reading for investors, such as:

• "Merchants of Debt", by George Anders. It is about cases of KKR, a private equity fund: "it should be mandatory in any finance course";
• "Charlie Munger: The Thought and Trajectory of Warren Buffett's Billionaire Partner." It objectively presents the investment principles of the investment genius, Charlie Munger.

What do other authors say about it?

In "The Most Important Thing", Howard Marks, a brilliant investor at Oaktree Capital, covers more than fifteen topics on what a successful investor should not miss.

While in "Análise Fundamentalista" (Fundamentalist Analysis), José Kobori teaches how to achieve sustainable results in investments through a practical and rational approach.

Finally, in "Business Adventures", John Brooks presents cases of success and failure in the business world, and his style is so engaging and his teachings so useful that he simply wins over Warren Buffett and Bill Gates, to the point that these two friends put the book on their "favorite books" list.

Okay, but how can I apply this to my life?

Throughout the book "Fora da Curva" several practical tips were passed on. Here we will review the main ones:

• Seek to build your own investment style, and be inspired by the big names to take from each the learning to evolve;
• Seek to invest for the long term;
• Invest in companies with market barriers;
• Do not despair in crises, seek to learn from them;
• If there is cash in the midst of crises, take advantage of good opportunities;
• Know in-depth the background of the professionals, and choose the best ones.

Did you like this summary of the book "Fora da Curva"?

So, were you able to get some ideas for investing? Very cool to see how each of these investors has their own style, right? We hope they have helped you develop yours!

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