Compounding investing wisdom...
Before Warren Buffett took control of Berkshire, he ran Buffett Partnership from 1956 to 1969. His early partnership letters have been floating around the internet for some time.
Recently, I printed all the letters to read through chronologically. I’m only through the first five years (and will have more once I’m finished) but I thought I’d share a few takeaways from the first few years. Continue Reading…
There are two competing ideas around handling financial news. Either check your statements once a year while you try your best to ignore all the news noise. The other is to listen to everything until you learn to filter the news from the noise. Despite what people say, there are pros and cons to both.
I bring this up because the last post highlighted a Seth Klarman interview in which he was asked about how he avoids groupthink. I touched upon it briefly and wanted to expand on it. The answer he gave was an example: Continue Reading…
Jason Zweig interviewed Seth Klarman at a conference back in 2010. I recently dug up the transcript and wanted to highlight a few parts. The entire interview is a worthy read because Klarman always has good insights to share.
The interview also offers a reminder of the prevailing groupthink just two years after the financial crisis. If you paid attention to the financial news at the time, you might remember the constant coverage of inflation worries, gold as the answer, a double-dip recession, and the EU breaking up. Continue Reading…
The returns most investors actually get are very different from the total return advertised by a fund. Put another way, the one thing driving most investment decisions – past total returns – are not what investors actually earn. In reality, investors earn less, and in some cases, a lot less than the total return advertised by a fund.
Morningstar updated its report on the investor returns gap late last week (download the full report at the source link below). The report found that investor returns for the 10 year periods ended 2012 to 2015 fell short – on average – by 1.13%. Continue Reading…
I flipped through Philip Fisher’s Common Stocks and Uncommon Profits a few days ago. The first time I read this book, I set it down a half dozen times before finally finishing it. That doesn’t take away from the books importance. It belongs in the list of classic investing books.
Fisher’s investment style is a completely different approach from Graham’s value investing. Though, there is a little bit of value of in him. In part three of the book, Fisher breaks down his investment philosophy: Continue Reading…
I read a few newsletters to keep me updated on what other people think. One of those is Richard Bernstein’s since he offers monthly research from a top-down, macro view of the economy – something I don’t spend much time on – because it’s nice to get an intelligent viewpoint from that perspective.
His latest newsletter points to one flaw in the current thinking behind what drives bull markets: Continue Reading…