We’ve just been watching Charlie Munger at the latest Daily Journal meeting in which he recounts the most important investing trick he learnt from his grandfather, saying: I had a grandfather who was very useful to me. My mother’s grandfather. He was a pioneer. He came out to Iowa with no money but youth and health and took it away … Read More
Seth Klarman: The Proper Wiring for a Long-Term Investor
In Seth Klarmans’ latest shareholder letter he writes successful investing is like being a successful relief pitcher, saying: Consider the plight of a relief pitcher. Historically undervalued, unappreciated, often used interchangeably with other relievers, and, until recently, low on the major league pay scale. Required to be ready throughout most games at only a moment’s notice. And the role comes … Read More
Warren Buffett: How’s That For A Strategic Plan?
In the 1984 Berkshire Hathaway Shareholder Letter, Warren Buffett describes his and Munger’s suprising strategic plan for finding their big investment ideas, saying: “Using my academic voice, I have told you in the past of the drag that a mushrooming capital base exerts upon rates of return. Unfortunately, my academic voice is now giving way to a reportorial voice. Our historical 22% … Read More
Charles Munger: EMT – The Stock Market Ain’t Like Physics, It’s Like A Mob At A Football Game
Here’s a great short video with Charles Munger talking about The Efficient Market Theory saying: “Well I think we’ve had some effect, but they’re still teaching The Efficient Market Theory. Remember the old ideas die hard. And by the way it’s roughly right. It’s just the very hard form which everybody believed. They believed it was impossible and was rare. … Read More
James Montier: What’s The Key Lesson Investors Can Learn From Templeton, Soros, Berkowitz and Steinhardt
One of the best books ever written on Behavioral Investing is – The Little Book of Behavioral Investing by James Montier. There’s a great passage in the book in which Montier emphasises the key lesson that investors can learn from the world’s greatest investors saying: Small manageable steps are likely to be the best way towards sustainable weight loss. The same is … Read More
Seth Klarman: How To Increase The Likelihood Of Achieving Sustainable Gains With Limited Downside Risk Over The Long-Run
In his latest Baupost Sharholder Letter, Seth Klarman provides some great advice for investors on how to increase the likelihood of achieving sustainable gains with limited downside risk over the long-run saying: “We believe another key element in portfolio management is curtailing the duration (the weighted average life) of one’s portfolio through exposure to investments with catalysts for the realization … Read More
Howard Marks: How Can Investors Become Effective Contrarians
We’ve just been re-reading Howard Mark’s 2009 Memo – Touchstones. In the memo Marks provides some great insights into how investors can become more effective contrarians saying: Resisting – and thereby achieving success as a contrarian – isn’t easy. Things combine to make it difficult, including natural herd tendencies and the pain imposed by being out of step, since momentum … Read More
Warren Buffett: There Is Only Three Ways A Smart Person Can Go Broke
Over the years Warren Buffett has spoken about the absurdity of borrowing money to buy stocks. Here’s a great short video that encapsulates his thoughts. Our favorite quote from the clip is: (1:47) – “My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies, and leverage. Now the truth is, the first two … Read More
Peter Lynch: 13 Filters For Finding The Perfect Stock
One of our favorite investing books is – One Up On Wall Street by Peter Lynch – It’s an investment classic! In Chapter Eight, Lynch provides thirteen filters for finding the perfect stock saying: Getting the story on a company is a lot easier if you understand the basic business. That’s why I’d rather invest in panty hose than in communications … Read More
Charles Munger: One Filter That’s Very Useful For Investors
During the 1997 Berkshire Hathaway Shareholder Meeting, Warren Buffett and Charlie Munger were asked their thoughts on calculating intrinsic value. Here’s Munger’s response: I would argue that one filter that’s useful in investing is the simple idea of opportunity cost. If you have one opportunity that you already have available in large quantity and you like it better than 98% … Read More
Stanley Druckenmiller – Bulls Make Money, Bears Make Money, And Pigs Get Slaughtered – I’m Here To Tell You I Was A Pig
We’ve just been re-reading one of our favorite speeches from legendary investor Stanley Druckenmiller at the Lost Tree Club some years ago. During the speech ‘The Druck’ provides some great insights into the mindset necessary to become a successful investor, saying: The third thing I’d say is I developed partly through dumb luck – I’ll get into that – a very … Read More
Michael Burry: How Can Investors Get Even After Suffering A Loss
We’ve just been re-reading Michael Burry’s MSN Case Studies in which Burry provides some great insights into what investors should do after suffering a loss saying: How to get even An outsider might find investors’ thinking odd. Presented with new money to invest, most set goals of growing that money. They set targets of 20%, 30% or sometimes much more. And they set off … Read More
Steve Romick – Value Investing Has Morphed From The Days Of Graham and Dodd
We’ve just been listening to a great interview by Meb Faber with one of our favorite value investor’s – Steve Romick, Portfolio Manager for the FPA Crescent Fund. During the interview Romick explains how value investing has morphed from the days of Graham and Dodd saying: Steve: Value investing is, to us, simply investing with a margin of safety, believing that … Read More
Joel Greenblatt – Great Value Investors Need To Be Cold Hearted JellyBean Counters
Here’s a great video with Joel Greenblatt at the CFA’s Distinguished Speaker Series. During the presentation Greenblatt recounts the story of how he was able to explain the stock market and value investing to a ninth grade class, using a big jar of jellybeans. Greenblatt says: I have a friend who’s an orthopedic surgeon. He’s head of this group of … Read More
Stanley Druckenmiller: What Characteristics Do You Need To Be A Great Investor
Here’s a great interview with Stanley Druckenmiller speaking to Bloomberg’s Erik Schatzker in which Druckenmiller provides his thoughts on the economy, stocks, bonds, trump, algos, and the Fed. Druckenmiller was asked what sort of personality you have to have to be a successful investor. He says: “I think you have to be a little sceptical and a bit of a contrarian… … Read More
Charles Munger: Investing In Shares Is Much Easier Than Investing In Real Estate, Here’s Why
Here’s a great little video in which Charles Munger is discussing why investing in shares is better than investing in real estate. Munger says: “The trouble with real estate is that everybody else understands it, and the people who you’re dealing with and competed with, they’ve specialized in a little twelve blocks or a little industry. They know more about … Read More
Peter Lynch: 27 Timeless Investing Lessons
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
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?
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
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