I know a couple of senior managers who follow exactly what's written in the blog. Another friend did something clever. Since he believes in tech industry's indomitable rise (aka Software eating the world), he uses his stocks to trade stocks of other publicly traded companies. He buys Netflix, Facebook, and stock of other lesser known companies when he's feeling like a gambler.
He treats his stock compensation as bonus. And that has worked well for him. He has a set timeline for when he cashes out, and usually draws a lot of funds only when he's investing that to buy land or house or put that money in indexed funds...
The managers I spoke about have, by my estimates, lost 10x value on the stock grant. They sold too early, too many years back. But they are still at the company. No matter how risk averse you are, that must hurt.
Some stocks are chickens that lay golden eggs.
I wonder if there's a nice mathematical way of maximising income from this.
IMO - its a question of exposure and convexity of your positions moreso than risk. Risk involves predicting the chance that different outcomes occur and...no one is really good at that. However, do you feel comfortable exposing X% of your total assets to the upside of Google growth? If you think in terms of controlling your max loss per opportunity and making sure you're in ones that have significantly more upside than exposure, you don't need to predict correctly quite as much.
He treats his stock compensation as bonus. And that has worked well for him. He has a set timeline for when he cashes out, and usually draws a lot of funds only when he's investing that to buy land or house or put that money in indexed funds...
The managers I spoke about have, by my estimates, lost 10x value on the stock grant. They sold too early, too many years back. But they are still at the company. No matter how risk averse you are, that must hurt.
Some stocks are chickens that lay golden eggs.
I wonder if there's a nice mathematical way of maximising income from this.