Compounding investing wisdom...
by Jon
Quality is king. That’s what Buffett and Munger have been preaching for a few decades and Berkshire is the shining example that it works.
Buffett has been laying out what to look for in quality businesses for a while now. I’ve been going over some his earlier thoughts on quality companies after listening to the BRK annual meeting.
Buffett’s lecture at the University of Florida probably is one of the best at describing examples of what he looks for: Continue Reading…
by Jon
During the Berkshire annual meeting, both Buffett and Munger had great things to say about Jeff Bezos. I highlighted some their comments earlier this week. At one point, Buffett recommended watching an interview Bezos did with Charlie Rose late last year.
It’s a good interview that fits with what Buffett and Munger discussed during the meeting. Bezos’s ideas around Amazon’s customer-centric view and long-term perspective fit with their philosophy: Continue Reading…
by Jon
The Q&A session at the Berkshire Annual Meeting can be hit or miss. A lot of questions get repeated year after year. The answers don’t really change much either. About half the time a good question gets asked or an old question finally gets a great answer.
Now that the meeting is streamed online, getting through it and taking notes is much easier. I watched the replay to this year’s meeting. I actually watched it twice. The first time at a faster speed just to get through it (the Q&A was 5 hours long), noting the timestamp for the better questions and answers. Then I watch those sections over again.
The notes below are from those topics I found most interesting. Continue Reading…
by Jon
The current market valuation is expensive by historical standards. Some say it’s overvalued but others don’t.
If you’re lean on the side of expensive, a question worth asking is what would make our current high market valuation “not expensive”?
Jeremy Grantham asks the same question in the latest GMO letter. He has some decent answers worth thinking about: Continue Reading…
by Jon
I finally finished reading a book’s worth of articles written by Peter Lynch from 1992 to 1999. It was 44 articles to be exact and offered a peek into his thought process during the last seven years of the longest bull market in history.
His articles were a mixture of the typical Peter Lynch advice and case studies where he saw opportunities at the time.
Surprisingly (maybe not), he never mentioned the huge run-up in dot-com stocks. Instead, he focused on business he understood and fit his strategy. So most of the discussion was growth stocks, cyclicals, and turnaround opportunities.
I wanted to share some of my favorite highlights from Lynch’s articles. Continue Reading…
by Jon
Show me an investor who wants great returns right now and I’ll show you an investor who wants persistently great returns while avoiding losses too. This strategy has been pursued and promised since the dawn of time.
The problem is it doesn’t exist. You can’t have it both ways but people continue to chase the dream.
In the Luncheon Speech I referenced a few days ago, Peter Lynch was asked a question on shareholders rights and whether shareholders should be more involved in business decisions. Here’s his response (emphasis mine): Continue Reading…