Compounding investing wisdom...
Buffett regularly makes the difficult, sound very easy. His knack for simplifying things, in a way a mass audience can understand, often gives the false impression that investing is easy.
“Simple, but not easy” best describes it.
Still, his simple messages get misinterpreted often. It leads some people to believe you can do it too without much effort. Others seem to think Buffett has a super secret formula that always spits out winners and he just refuses to share it. Continue Reading…
Sometimes we don’t make the obvious choice or the one that makes the most sense or even the favorite.
A scientist ran a study where participants were given a choice between two candy bars. Of course, they picked their favorite. But when the number of choices increased, they were less likely to do so. Continue Reading…
This is part three of The Intelligent Investor series. I’ve been sharing some of the timeless wisdom from Graham’s groundbreaking book as a way to put my notes to good use. The first part covered the first four chapters of the book and part two covered the next four chapters. This post continues in kind.
In chapter nine, Graham explains why the defensive investor should use mutual funds. I’m sure if he could update the book today, he’d offer a similar view on index funds. Chapter ten digs into the role financial advisors play, along with warnings on the role pseudo “advisers” play as well. Finally, chapters eleven and twelve delve into Graham’s thoughts on security analysis generally and how to deal with earnings per share specifically.
Below you’ll find a few random bits of wisdom from each chapter. Continue Reading…
I do my best to ignore it but this year it’s hard not to look away. Like a car wreck at an intersection, this year’s political circus has grabbed a lot of attention. Train wreck probably better describes it. I’ll spare you my opinion of the candidates, except to say it looks like a choice for the least worst option. Neither candidate is a glowing example (spray-on tan doesn’t count) of much. But I’m cynical.
As is so often the case, there is perception – what you’re being told sold – and reality. And 20-second sound bites drive most of what voters perceive (not much different then the markets). Reality, on the other hand, requires a bit more time and thought and logic to weigh outcomes and trade-offs of all the complex issues being discussed. But our time is short, so 20-seconds suffices for too many of us. Continue Reading…
Warren Buffett released his “ground rules” for the Buffett Partnership in the 1962 Annual Letter. Between his rules and the rest of the letter, you get an idea of how and why he builds a conservative portfolio.
Throughout the earlier letters, Buffett repeats several themes, which he wraps up into seven rules: Continue Reading…
Michael Mauboussin published a great piece late last week titled Reflections on the Ten Attributes of Great Investors.
I pulled a couple of the attributes below but it doesn’t do the piece justice. Mauboussin expands on each one further. You really should box out some time this weekend to read it in full. Continue Reading…