Peter Lynch: 27 Timeless Investing Lessons

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We’ve just been re-reading Peter Lynch’s classic book – One Up On Wall Street. In it, Lynch provides 27 timeless investing lessons. Here’s an excerpt from the book: Sometime in the next month, year, or three years, the market will decline sharply Market declines are great opportunities to buy stocks in companies you like. Corrections—Wall Street’s definition of going down a … Read More

Charlie Munger: I Made Four Or Five Hundred Million Dollars From Two Decisions, With Almost No Risk

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In this short interview Charles Munger explains how he made four or five hundred million dollars from just two decisions: “I talked about patience. I read Barron’s for fifty years. In fifty years I found one investment opportunity in Barron’s. I made about $80 Million, with almost no risk. I took the $80 Million and gave it to Li Lu … Read More

Aswath Damodaran: The Inverted Yield Curve: Is There A Signal In The Noise?

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Here’s a short presentation by Aswath Damodaran on the recent inverted yield curve and whether there is a signal in the noise. He writes: On December 4, 2018, the yield on a 5-year US treasury dropped below the yields on the 2-year and 3-year treasuries, causing a portion of the US treasury yield curve to invert. Since inverted yield curves … Read More

Jeremy Grantham: Investing Was So Much Easier 40 Years Ago

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Here’s a great podcast with Jeremy Grantham chatting to Barry Ritzholt at Boomberg. When asked about the difference between investing forty years ago compared with today he said: “The world was so straight forward forty years ago. There was such a limit on the talent in the business. If you showed up and used your brains, you were likely to … Read More

James Montier: How To Protect Yourself From Wall Street’s ‘Self-Serving’ Biases

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In his book – The Little Book of Behavioral Investing, James Montier wrote a great passage on how investors can identify and protect themselves from becoming victims of Wall Street’s self-serving biases. Here’s an excerpt from that book: So much for nature. Nurture also helps to generate the generally rose-tinted view of life. Psychologists have often documented a “self-serving bias ” … Read More

Charles Munger: Why Did Ben Graham’s Net Nets Disappear

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Just been re-reading Charles Mungers’ classic speech – A Lesson on Elementary, Worldly Wisdom As It Relates To Investment Management & Business. In it Munger provides some great insights into what happened to the net net stocks popularized by Ben Graham. Here’s an excerpt from that speech: The second basic approach is the one that Ben Graham used—much admired by … Read More

Seth Klarman: One Of Society’s Most Vexing Problems Is The Relentlessly Short-Term Orientation That Manifests Itself In Investing

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We’ve just been reading Seth Klarman’s latest speech at the Harvard Business School. During the speech Klarman provides some great insights into the problems with a short-term orientation in investing. Here’s an excerpt from the speech: Consider corporate time horizons. It’s a choice to attempt to maximize corporate results over the very short run and a different and sometimes harder … Read More

Howard Marks: Avoiding All Losses Can Render Success Unachievable Almost As Readily As Can The Occurrence Of Too Many Losses

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In his 2014 memo – Dare To Be Great, Howard Marks says successful investing includes dealing with some losses saying: “To succeed at any activity involving the pursuit of gain, we have to be able to withstand the possibility of loss. A goal of avoiding all losses can render success unachievable almost as readily as can the occurrence of too … Read More

Aswath Damodaran: The One Thing You Need To Do To More Accurately Value Businesses

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Here’s a great presentation with Aswath Damodaran and the team at Google. During the presentation Damodaran reveals the one thing investors need to do to more accurately value businesses. Here’s an excerpt from the presentation: So here’s my final point about valuation. One of my favorite movies of all time is – The Wizard of Oz. Remember the story. Dorothy gets sucked … Read More

Michael Burry: Measuring Money Managers By ‘Relative Performance’ Harms Their Ability To Invest Intelligently

Johnny HopkinsInvesting Strategy, MIchael BurryLeave a Comment

Seth Klarman has often spoken about the nonsense of measuring fund managers by their ‘relative performance’. That is, measuring the performance of their investments against various market benchmarks. A quick read through Michael Burry’s Scion Capital shareholder letters shows that he’s also not a fan of relative performance as a performance indicator. Here’s an excerpt from his letters: In order … Read More

Stanley Druckenmiller: What Should Investors Do If They’re In A ‘Slump’

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Here’s a great interview with investing legend Stanley Druckenmiller at Real Vision in which he discusses the importance of investors knowing whether they’re currently ‘hot’ or ‘cold’ with regards picking investments. He also provides some great insights into what you should do if you find yourself in an investing slump. Here’s an excerpt from that interview: One of the lucky things … Read More

Nassim Taleb: In Investing The People You Understand Most Easily Are Necessarily The Bull***tters.

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Here’s a great passage from Skin In The Game by Nassim Taleb in which he discusses how easily investors can be hoodwinked by smooth talking salepeople promising outsized returns and, how often the best investing advice comes from those least able to explain it best. Here’s an excerpt from the book: The idea of this chapter is Lindy[1]-compatible. Don’t think … Read More

Jim Chanos: “Being Short With A Good Short Seller Who’s Producing Nominally Minor Positive Returns In A Bull Market Enables You To Be More Long”

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One of our favorite Jim Chanos interviews is one he did with FT Alphachatterbox in which he explained how short selling provides ‘long-side’ investors with an insurance policy saying: “Being short with a good short seller who’s producing nominally minor positive returns in a bull market enables you to be more long.” Here’s an excerpt from the interview: [Matt Klein] … Read More

Howard Marks: Going To Cash Under Almost All Circumstances Is Stupid!

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Here’s a great interview with Howard Marks at Goldman Sachs in which Marks discusses why going to cash under almost all circumstances is stupid, and why market timing is impossible. Here’s an excerpt from the interview: Interviewer: Now that Oaktree is now $120 billion, and I understand not all pools of money are the same, realistically given the size of … Read More

Charlie Munger: Moral Investing – We Could See It Was Like Putting $100 Million In A Bushel Basket And Setting It On Fire As We Walked Away

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Here’s a great video with Charles Munger and Warren Buffett at the 2005 Berkshire Hathaway shareholder meeting in which they discuss the moral distinction between buying a stock and a company. Here’s an excerpt from the video: CHARLIE MUNGER: Yeah. I think he’s asking in part, are there some businesses we won’t have as subsidiaries in Berkshire even though they’re … Read More

Jim Simons: Investing Is a Very ‘Gut Wrenching’ Business But You Can Find Things That Are Predictive

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Here’s a great video interview with Jim Simons in which he discusses how his early success came more from luck than strategy. He also discusses how gut wrenching investing can be, how the efficient market theory is wrong, and how machine learning is only as good as the humans operating it. Here’s some excerpts from the video: Jim Simons (JS): … Read More

Joel Greenblatt: Redefining ‘Traditional’ Value Investing So That It Never Goes Out Of Favor

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Here’s a great interview with Joel Greenblatt at Bloomberg in which he discusses the types of businesses he’s currently looking for and how he’s redefined the ‘traditional’ value investing strategy so that it never goes out of favor’ Here’s an excerpt from the interview: We try to stick to companies gushing free cashflow. Huge returns on capital, meaning they deploy … Read More

Charlie Munger: That Decision Has Cost Me Now About $5 Billion

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Here’s a great recent interview with Charlie Munger & Li Lui in which Munger recalls one of his greatest investment mistakes that cost him $5 Billion. Here’s his recollection: Munger: Let’s take a simple question. As I said in that book. They offered me three hundred shares in Belridge Oil, which I bought because I had the money on hand. They … Read More

Bruce Greenwald: How Smart Investors Can Take Advantage Of Overconfident Investors – Which Is Most Of Us!

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We’ve just been watching Bruce Greenwald’s 2014 presentation at the International Post Keynesian Conference in which he illustrates how smart investors can take advantage of overconfident investors, which is most of us, saying: Human beings are constituted and cannot stop themselves from believing they know what they know with a vastly higher degree of certainty than is warranted. In the … Read More