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Blink 3 of 8 - The 5 AM Club
by Robin Sharma
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Two and Twenty summary
Sachin Khajuria
How the Masters of Private Equity Always Win
16 mins
Brief summary
'Two and Twenty' by Sachin Khajuria is a financial thriller that offers a glimpse into the hedge fund industry's high stakes world. It exposes the industry's darker sides while providing insights on the consequences of unethical practices.
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Two and Twenty
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Key idea 1 of 4
Private equity is extreme asset flipping.
You’ve probably seen those real estate “flip” shows on TV – the ones where an aesthetically pleasing couple buy a run-down property in an up-and-coming suburb. Over the course of an hour, you watch them demolish a wall here, build a deck there, and encounter a few hiccups like bad weather or unexpected costs. As the episode nears its end, you’re given a virtual tour of a slick new property, complete with designer furnishings and impressive landscaping. Then the auction begins. The house sells for a huge profit, and the couple is flush with cash, ready to seek out their next project.
In a way, private equity is the same – only the stakes are much, much higher. And, of course, instead of playing with a few hundred thousand dollars, you’re flipping assets worth millions.
So, what exactly is private equity?
In simple terms, private equity is a type of financial investment, in the same way that buying shares or putting savings in a high-interest account are types of investments. People use private equity to turn the money they have into even more money.
Sounds great, right? Especially if you’re someone who doesn’t have a regular paycheck, like a retiree. You want the money you have to support you for as long as possible, by multiplying as much as possible.
But one thing that distinguishes private equity from other types of financial investments is risk. First, you need a huge chunk of money to play this game – much more than if you were just buying a few shares independently. Why? Well, private equity typically involves flipping entire companies. These companies are usually in a state of crisis: they’re facing bankruptcy, or they’ve lost the bulk of their customers to competitors, or they’ve failed to modernize and can’t deliver anymore.
You might be wondering why anyone would invest in a company like that. The reason is potential. A private equity firm is one that makes investments on behalf of other organizations who represent individuals – like pension funds. The firm will see the ailing company as an opportunity. Its dire circumstances will make it cheap to purchase, and the firm will have an expert team who can guide it back to health – like those house-flippers who turn a dump into a palace. But even more than that, the team will transform the company into a business opportunity that the market salivates over. At the right moment, the firm will sell and walk away with double or triple what they paid. They win, the company wins, and, most importantly, the private investors that the firm represents win.
So, why is this risky?
Well, again, you need a lot of money in the pot to not only purchase an ailing company, but nurture it back to health over several years. That money, don’t forget, often belongs to retirees living on a fixed income. And unlike the stock exchange, where you can buy or sell at any time, investors can’t withdraw their money from a private equity investment scheme for an agreed period of time. This timeframe will be years – long enough to get the ailing company back on its feet. Finally, there’s always the risk that the flipped company won’t become profitable and gain a high purchase price, in which case the investment might only break even – or worse, it could sell for a loss. So, while private equity reaps investors high returns when it’s a success, when it fails, it fails dramatically.
But it’s the promise of those high rewards – and maybe even the adrenaline rush of those high stakes – that make private equity so tempting for investors and professionals alike.
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What is Two and Twenty about?
Two and Twenty (2022) provides an up-close-and-personal account of the mysterious world of private equity. It gives insights into this unique branch of the finance sector and explains what sets it apart from other investment models.
Two and Twenty Review
Two and Twenty (2022) by Sachin Khajuria explores the complexities of human relationships, emotions, and personal growth. Here's why this book is worth your time:
- With its rich characters and intricate plot, the book presents a compelling narrative that keeps readers hooked from start to finish.
- The author masterfully weaves together various storylines to create a multi-dimensional world that mirrors our own, allowing readers to connect deeply with the characters.
- Through its thought-provoking themes and exploration of universal experiences, the book encourages self-reflection and prompts readers to reconsider their own perspectives and choices.
Who should read Two and Twenty?
- Newly minted finance professionals with million-dollar aspirations
- Cynics wondering whether private equity partners deserve their wealth
- Anyone curious about the role private equity plays in their retirement funds
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Two and Twenty FAQs
What is the main message of Two and Twenty?
The main message of Two and Twenty is that life is fleeting and we must make the most of our time.
How long does it take to read Two and Twenty?
The reading time for Two and Twenty varies depending on the reader's speed. However, the Blinkist summary can be read in just 15 minutes.
Is Two and Twenty a good book? Is it worth reading?
Two and Twenty is worth reading as it offers a unique perspective on the fleeting nature of life and the importance of making every moment count.
Who is the author of Two and Twenty?
The author of Two and Twenty is Sachin Khajuria.
What to read after Two and Twenty?
If you're wondering what to read next after Two and Twenty, here are some recommendations we suggest:
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- The Algebra of Wealth by Scott Galloway
- The Venture Mindset by Ilya Strebulaev
- 12 Rules For Life by Jordan B. Peterson
- The 80/20 Principle by Richard Koch
- Uncommon by Mark Divine