(Image Credit: www.forbes.com)
Recently I started an investing video series called, Contemporary Investing Gurus.
Over the years I’ve spent loads of time reading articles, watching videos and listening to podcasts from some of the best investing minds in the world. Names like Joel Greenblatt, Mohnish Pabrai, Warren Buffett, Charlie Munger, Meb Faber, and Guy Spier, just to name a few.
This week I’ve got a video from one of my favorite investors, Ray Dalio. His video definitely meets the criteria of making complicated things sound simple.
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Like two heavyweight boxing champions, there’s been loads of tests and comparisons made between heavyweight stock screeners, The Acquirer’s Multiple (the method provided by the screens here) and The Magic Formula (which of course was developed by Joel Greenblatt).
Here is one such article published by Lukas Neely, a former Hedge Fund Portfolio Manager and author of the Amazon #1 bestselling book (valuation), Value Investing: A Value Investors Journey Through The Unknown. It’s part of an interview with Tobias Carlisle, founder of this website, and provides some great information on The Acquirer’s Multiple and his entire investing strategy.
You can find the original article here, Is The Acquirer’s Multiple the Next Magic Formula?
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Like baseball, investing is more about safe hits that’ll get you on base rather than hitting home runs. The importance of calculating down-side risk rather than upside gains is one of the most overlooked concepts in stock market investing.
Of course Warren Buffett is often quoted as saying, “Rule No.1 is never lose money. Rule No.2 is never forget rule number one.”
One of the best pieces on the subject comes from one of my favorite investors, Joel Greenblatt.
Greenblatt is an Adjunct Professor at Columbia University Graduate School of Business. He’s Managing Partner of Gotham Capital, a hedge fund that he founded in 1985, and a Managing Principal of Gotham Asset Management. He’s also written three books.
If you’re serious about investing. Do yourself a favor and grab a copy of Greenblatt’s book, You Can Be A Stock Market Genius, from the library. While most investing books can be dry and dense, this book is very easy to read.
Let’s hear what he has to say on minimizing down-side risk and getting on base…
(Image Credit: mebfaber.com)
One of my favorite bloggers is Meb Faber @ mebfaber.com.
Meb recently wrote an article called Institutional Investors Are Delusional, where he commented on a recent survey of 400+ real money institutional respondents asked to estimate the net returns they will receive from their hedge funds.
The results astounded Meb and they will astound you.
(Image, Do You Have a Friend Who is a Loser? Get Rid of Em!, accessed 18 July 2016, http://persuasive.net/)
Let’s face it, no-one wants to hang out with losers.
But when its comes to investing, these are the exactly the types of stocks most likely to provide outstanding returns.
The problem is there’s one undeniable fact in stock market investing and that is that human beings are drawn to the beautiful, high growth, glamour stocks.
It’s not just in the stock market, it seems that human beings are simply attracted to attractive things.
(Image, John Bogle on the Rise of Index Funds, accessed 16 July 2016, http://www.barrons.com/)
Have you ever looked at the statement you receive from your investment manager and wondered, what the heck are they talking about!
You think you’re getting good returns but it turns out you’re underperforming. The question is, WHY?
One reason that investors continue to underperform is provided by a simple illustration from John Bogle in his book, The Little Book of Common Sense Investing.
John Bogle is the founder and retired CEO of The Vanguard Group. He was also named one of the “world’s 100 most powerful and influential people”, by Time magazine in 2004.
Bogle’s innovative idea was creating the world’s first index mutual fund in 1975. Bogle’s idea was that instead of beating the index and charging high costs, the index fund would mimic the index performance over the long run. Thus, achieving higher returns with lower costs than actively managed funds.
Let’s see what he has to say.
(Image: The Walter Schloss approach to value investing, accessed 14 July 2016, http://vintagevalueinvesting.com/)
The good news is that there’s thousands of websites that provide great information for new investors in the stock market. The bad news is that there are thousands more not providing such great information.
If you’re new to stock market investing, here’s three important rules to start with:
(Video. Danny DeVito Explaining Value Investing — Benjamin Graham Style (Other People’s Money), accessed Youtube 13 July 2016, https://www.youtube.com/)
Bit of humor today.
Its aged a little, but here’s a great 3 minute video from the 1991 movie, Other People’s Money. Danny DeVito explains the timeless concept of value investing succinctly.
(PHOTO: Source, www.michaelmauboussin.com)
One of the great things about being a stock market investor in the year 2016, is that we have the internet. That means we have access to loads of free information to help us become better investors.
There’s lots of great research that tells us why we continue to underachieve in the stock market. One of my favorite bits of research is by a guy called, Michael Mauboussin.
Michael Mauboussin is the Managing Director and Head of Global Financial Strategies at Credit Suisse. He’s also written three books, he’s been an adjunct professor of finance at Columbia Business School since 1993, and received the Dean’s Award for Teaching Excellence in 2009.
So, it’s fair to say, he’s an expert in the area of investing!
If you’re like me, you insure your car, your house, and your life.
The reason I insure my house is because if it burns to the ground my insurance company will provide the necessary funds to rebuild it. The reason I insure my car is if I crash into a Ferrari LaFerrari, valued at $1.6 Million, I won’t have to sell my house to pay for it, and the reason I insure my life, should be pretty obvious.
So why is it that stock market investors, particularly those that picking individual stocks, don’t take out an insurance policy on their investment?
Huh! I’m pretty sure you can’t insure your shares against losses!
(Image Credit, cnbc.com)
Why is it that every time you pick up a newspaper or switch on the finance channel, some talking head is making a prediction on what’s likely to occur with macro-economic events like interest rates, currency rates, or movements in the stock market.
The simple truth is, no one can predict the future!
(PHOTO: Source http://www.talkativeman.com/seth-klarmans-recommended-books-on-investing/)
Recently I wrote an article on investing and Behavioral Finance. Behavioral finance is a relatively new field that seeks to combine behavioral and cognitive psychological theory with conventional economics and finance to provide explanations for why people make irrational financial decisions.
The article is called, The biggest problem in share investing, is you! It demonstrates how human beings make terrible decisions when it comes to investing in shares.
I often get asked, “What’s the best way to implement an Acquirer’s Multiple (AM) deep value investment strategy?”.
Tobias has written a number of articles over the years on how best to implement this strategy. Here are five questions we are regularly asked, answered by Tobias himself.
If you’ve got any questions on how to implement your own AM investment strategy, drop me a comment at the bottom of this article so that others can see your question and my response.
Today, I’m starting a new series here at The Acquirer’s Multiple called Contemporary Investing Gurus.
Over the past few years I’ve spent a lot of time reading articles, watching videos and listening to podcasts from some of the best investing minds in the world. Names like Joel Greenblatt, Mohnish Pabrai, Warren Buffett, Charlie Munger, Meb Faber, and Guy Spier, just to name a few.
You have to love the Large Cap Deep Value Stock Screener here at The Acquirer’s Multiple (TAM). The Large Cap Deep Value Stock Screener shows the top 30 companies in The Acquirer’s Multiple® Large Cap 1000 universe, which is drawn from the largest 1,000 U.S. exchange-traded stocks and ADRs excluding financials and utilities.