Michael Episcope - Investing Is About How You Behave and Not What You Know

BIO: Michael Episcope is the co-CEO of Origin Investments. He co-chairs its investment committee and oversees investor relations and capital raising.

STORY: Michael invested in a multi-family property in Austin with a friend who had vouched for somebody else. Unbeknownst to Michael, the guy in Austin had taken a loan against his property to save other properties in his portfolio.

LEARNING: Do not justify the red flags because an investment opportunity looks great. Investing is about how you behave and not what you know.

“When looking at an investment opportunity, do not justify the red flags because the investor investment opportunity looks so great.”

Michael Episcope

Guest profile

Michael Episcope is the co-CEO of Origin Investments. He co-chairs its investment committee and oversees investor relations and capital raising. Prior to Origin, Michael had a prolific derivatives trading career and was twice named one of the top 100 traders in the world. Michael earned his undergraduate and master’s degrees from DePaul University. He has more than 30 years of investment and risk management experience.

Worst investment ever

In 2004, Michael, a commodities trader, ventured into an investment with a friend’s recommendation. His friend’s assurance and Michael’s financial stability made him believe he was impervious to mistakes.

The investment was a multi-family property in Austin, Texas. Michael trusted his friend and thought he did the due diligence, but he did not. The deal was okay, as they had the right city and the right piece of land. But then the communication from the individual in Austin was not going very well, and things just weren’t adding up. But Michael’s friend kept insisting everything was good.

Still, something didn’t sit well with Michael, so he went online and Googled his property. He saw his property was sitting on a bridge lender site. The guy in Austin had taken a loan against Michael’s property to save other properties in his portfolio.

The whole thing just went sideways. Michael took a lot of time and effort to wrangle away from that investment, wasting a year of his life. He got pennies on the dollar back from that investment.

Lessons learned

• Investing is about people.
• When looking at an investment opportunity, do not justify the red flags because the investment opportunity seems so great.
• Investing is about how you behave and not what you know.

Andrew’s takeaways

• Even though you may sometimes have the wrong outcome, it doesn’t mean you didn’t do the right thing.

Actionable advice

• Do as much due diligence as possible. When investing with someone, ask yourself:
• Do they have something to lose if the investment fails?
• Do they have their skin in the game?
• Do they have a balance sheet?
• Do they have something here at risk more than you do?

Michael’s recommendations

Michael recommends that anyone wanting to learn about personal finance read Morgan Housel’s books. He also recommends downloading his free Comprehensive Guide to Real Estate Investing.

No.1 goal for the next 12 months

Michael’s number one goal for the next 12 months is to deliver a great product and service to his investors. On the personal side, Michael has two kids in college and one still at home. He aims to spend as much time as possible with the son still at home and then enjoy life after kids as an empty nester with his wife.

Parting words

“Thank you so much for having me on today. It’s been great.”

Michael Episcope

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Andrew’s books

• How to Start Building Your Wealth Investing in the Stock Market
• My Worst Investment Ever
• 9 Valuation Mistakes and How to Avoid Them
• Transform Your Business with Dr.Deming’s 14 Points

Andrew’s online programs

• Valuation Master Class
• The Become a Better Investor Community
• How to Start Building Your Wealth Investing in the Stock Market
• Finance Made Ridiculously Simple
• FVMR Investing: Quantamental Investing Across the World
• Become a Great Presenter and Increase Your Influence
• Transform Your Business with Dr. Deming’s 14 Points
• Achieve Your Goals

Connect with Andrew Stotz:

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• My Worst Investment Ever Podcast