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Kevin O'Leary wearing a suit and tie: Mike Blake/Reuters © Mike Blake/Reuters Mike Blake/Reuters

  • The “Shark Tank” star Kevin O’Leary underscored the value of investing, spoke about shorting Yahoo, and predicted the pandemic would transform retail forever on the “Industry Focus” podcast.
  • O’Leary also discussed the risks of venture investing, the dearth of financial literacy in the US, and how Warren Buffett’s business partner Charlie Munger had shaped his investing approach.
  • Here are O’Leary’s 16 best quotes from the interview.
  • Visit Business Insider’s homepage for more stories.

The “Shark Tank” star Kevin O’Leary emphasized the importance of investing, told the story of his costly Yahoo short, and argued the coronavirus pandemic had permanently reshaped the retail sector during a recent episode of the “Industry Focus” podcast.

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The O’Leary Funds and O’Leary Ventures chairman – whose nickname is “Mr. Wonderful” – also discussed his conservative portfolio, bemoaned the lack of financial literacy among many Americans, and highlighted Warren Buffett’s right-hand man, Charlie Munger, as a major influence on his investing approach.

Here are O’Leary’s 16 best quotes from the interview, lightly edited and condensed for clarity:

1. “We teach our kids everything in high school: sex education, geography, math, reading, etc. We do not teach them anything about credit cards, or debt, or investing. Then we ask ourselves why we end up in a situation as we are today, which has been highlighted by the pandemic a bit: There’s 100 million people in America that have set nothing aside for their retirement.”

2. “It freaks me right out that so many people, including many of the people that work for me in my own companies, have just two weeks of cash set aside. That’s not even investing – that’s just poor financial planning.”

3. “Realize that saving and investing are two different things. One of the big challenges is people think, ‘Well, I’m going to take some amount of what I make in my paycheck and put it in a savings account.’ That is not investing. Investing is getting exposure to the market.”

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4. “I love ‘Shark Tank,’ but that’s venture investing. It’s very, very risky. That’s not where my real money is. My real money is invested in a very conservative portfolio of ETFs that focus on large-cap, mid-cap, small-cap, tech growth, and dividends.”

5. “Sometimes it’s fun to trade, I get that. I’m not against that. But I taught my own kids, you have a strategy for building your nut, the thing that protects you for the rest of your life, and then you can do whatever you like on the side.”

6. “This is a very good time to be investing and staying the course on equities.” – pointing to the Biden administration’s likely focus on distributing COVID-19 vaccines and tackling unemployment with the help of the Federal Reserve.

7. “Retail is forever changed. We’re not reopening the stores that had mediocre returns – we’re never reopening them – we’re just going to continue with the direct consumer model. If you have a brand like Lululemon or something, you can afford to have a retail store because you’re selling $1,000 winter coats. But if you’re a generic retailer in a generic mall, the outcome is not going to be pretty.”

8. “Bad news for hotels, bad news for the airlines, great news for the other 80% of the economy that’s going to accrue the benefits of that huge reduction in business, travel, and entertainment, and more productivity in terms of getting their products.” – predicting a permanent slump in business travel as people have realized the power and convenience of videoconferencing tools during the pandemic.

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9. “I shorted Yahoo before it was put into the S&P 500. I was committed to holding on to that short because I knew one day, Yahoo would be at least a zero. I killed myself by not understanding when you short a stock, your losses are unlimited. I tied up, for years, millions of dollars of my capital just for the margin to do something very, very stupid.”

10. “Don’t get caught offside – that will protect your hiney for the rest of your life – and don’t do stupid things like shorting the next Yahoo, whatever that is.”

11. “I never let a stock become more than 5% of my portfolio, and I never let a sector become more than 20% ever. That way, when I own a Tesla and it’s doing its thing, I’m selling into the strength, keeping my 5% waiting, selling, selling, selling, selling, keeping my exposure.”

12. “One of the great things about being a Shark is I get shown everything now. I see every deal there is, practically. We make many investments outside of ‘Shark Tank’ because we see wonderful ideas and great entrepreneurs, and I want to be supportive. But I consider that money gone when I invest in it, because I have no idea of what the outcome is going to be. Then every morning, because I’ve got so many of them now, I have a complete Shakespearean drama playing out.”

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13. “It’s just a giant chorus of euphoria versus complete misery, and that is the nature of venture investing.”

14. “If you want to be a venture investor, you better be ready for rock and roll, because the outcome is completely unknown, completely random. It’s lots of energy, and I love working with the entrepreneurs, but the outcomes are crazy outcomes. You just don’t know what’s going to happen.”

15. “Charlie Munger is my guy. I mean, there’s nothing wrong with Warren Buffett, but you want to know where all that philosophy comes from and who keeps Warren Buffett on a straight track, it’s Charlie Munger.”

16. “My whole investment strategy is built around cash flow. I have a little Charlie Munger on my shoulder every day when I look at a deal, and he’s just saying two words: ‘cash flow, cash flow.'”

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