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In Episode 126, we welcome entrepreneur, author, and investor, Karen Finerman.\nThe episode starts with an interesting connection \u2013 Karen and Meb\u2019s wife both attended the same high school in Los Angeles, and apparently, it\u2019s the only high school in the U.S. with a working oil rig on campus. From here, Karen gives us a brief walk-through of her history after graduating Wharton, heading to Wall Street, where she eventually launched her own hedge fund.\nMeb asks about the framework she used in the hedge fund as she launched. Karen tells us they were fundamentally focused. Coming out of the savings and loan crisis, there were many smaller banks that had been unfairly stigmatized. Many were absurdly cheap with great balance sheets. Karen was able to take advantage, and developed an expertise in the space. She notes it was interesting how badly the market could mis-price an entire sector. She continues by telling us her strategy was mostly long focused. Her shorts were generally idiosyncratic, intended to hedge the portfolio. Beyond that, tax efficiency was a big focus.\nNext, Meb and Karen dig into her methodology for evaluating specific investments. Karen gives us the details, mentioning fundamentals, growth at a reasonable price, users that tend to be inelastic on price, and various other details, culminating with a specific example of a company she likes.\nMeb asks what Karen is seeing now. She tells us she\u2019s a little spooked by the tariff situation. Perhaps a big exogenous risk. She then changes gears, going into details about a specific company she likes \u2013 Alphabet \u2013 noting what she finds attractive (and where she feels they could improve). But overall, she\u2019s very impressed.\nThe conversation gravitates toward \u201cselling\u201d. After all, buying is generally the easier part \u2013 it\u2019s when to get rid of an investment that can be tough. Karen tells us that if an investment hits their target return, they\u2019ll lighten their position. These leads into a conversation about investment theses and how that plays into selling.\nThe years 1999 and 2000 come up, with Karen telling us she feels her group did the right thing then, avoiding getting sucked into the bubble. The new metrics at that time (stocks trading at a multiple of eyeballs) just didn\u2019t make sense to her. She notes there are some similarities today, as there are certain companies that are losing lots of money despite posting growth numbers.\nThis dovetails into a discussion of Tesla. It turns out Meb and Elon Musk shared a few words about short-selling on Twitter on the morning we recorded this podcast. Surprising no one, Elon is not a fan of shorts. Listen in for the details.\nThere\u2019s way more in this great episode: the ETF-ization of investing\u2026 Karen\u2019s book\u2026 How to address the great investing education problem\u2026 and of course, Karen\u2019s most memorable trade \u2013 actually, she shares two, a good one and a bad one. On the good side, there was an undervalued convenience chain in which Karen got involved at the right time and enjoyed a nice payday when Diamond Shamrock showed up at the buyer\u2019s table. The bad trade relates to when United Airlines was supposed to go private. Karen didn\u2019t factor in the possibility that the deal would collapse. Just how bad was the damage?\nFind out in Episode 126.\nLearn more about your ad choices. Visit megaphone.fm/adchoices