Warren Buffett is the best investor of our time. Better yet, he has shown a remarkable willingness to share his knowledge through interviews, letters, and most notably the Berkshire Hathaway annual reports.
This presentation presents some of Buffett's most memorable quotes that have a real capability of impacting your personal investing strategy.
TSLA Trend Trade after Double Bottom Intradaysmbcapital
- The document discusses intraday trades of Tesla (TSLA) stock after it reversed from a double bottom pattern and trended higher throughout the day.
- Positive company news around vehicle deliveries and an interview with Elon Musk helped propel the stock higher.
- The author entered and exited several call option positions in TSLA throughout the day, capturing a total of 20 points in profits from the intraday momentum moves.
- They were happy with their trade entries and exits but acknowledged struggles deciding between intraday versus swing trades, and were content to close positions at the end of the day.
The document discusses a short trade idea on Seagate Technology (STX) stock. It notes that Seagate announced weaker than expected preliminary Q3 2016 financial results, driving the stock down 11% in pre-market trading. Charts of STX and the S&P 500 are presented, along with trade strategy details such as looking for continuation of the down move on STX and adding to positions at important support levels. Management guidelines emphasize using multiple time frames and technical levels to enter and exit the trade.
This helpful presentation takes an in depth look into the many issues surrounding this important topic in the hedge fund industry, clearing up misconceptions and offering a thorough explanation of the reasons behind offshore investing.
Included in this presentation among other topics, users will find information regarding:
How hedge funds are structured
The composition of hedge fund investors
Reasons why investors choose offshore hedge funds
The various domiciles in which hedge funds operate
How hedge funds accommodate the needs of various investors
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
The document discusses various options trading strategies, including:
1) Buying call options to profit from an expected rise in the market. This strategy has unlimited upside potential but limited downside risk of the premium paid.
2) Buying put options to profit from an expected fall in the market. This also has unlimited upside potential and limited downside risk of the premium.
3) Holding stock and selling covered calls to generate income from the stock holding when a neutral market is expected. This caps upside potential in exchange for the option premium received.
The document explains the mechanics and risk-reward profiles of these and other options strategies through the use of diagrams and payoff tables.
This document discusses risk management and money management strategies for trading systems. It covers:
1) Calculating and measuring risk related to money management and differentiating between diversifiable and correlated risk.
2) Determining optimal position size using formulas like risk of ruin, theory of runs, and Kelly criterion to maximize returns while minimizing risk of ruin.
3) The importance of initial capital, as a series of early losses could wipe out a trading account before it has time to perform as expected. Proper money management is key to managing both the expected and unexpected risks in a trading system.
The document summarizes various options strategies that can be used based on different market outlooks. It describes bullish, bearish, neutral, and volatile market strategies using calls, puts, spreads, and combinations. For example, it explains that buying a call is a bullish strategy that profits if the market rises above the strike price, while selling a put is also bullish but profits from premium received if the market stays flat or rises.
The document discusses parameters, test data, and evaluating robustness for system testing. It notes that parameters like moving averages and stop losses should be identified for testing. Both in-sample and out-of-sample data are important to test on, including addressing price shocks. Robustness is evaluated by testing across different parameter values and market conditions over long periods. A robust system works consistently under various scenarios.
A simple trading strategy for beginners with only use daily candlestcik to set the pending order buy and sell. IT is suitable for beginners to start trading forex. IT tells where to set the pending oders, where to put stop loss and and how much the target profits.
TSLA Trend Trade after Double Bottom Intradaysmbcapital
- The document discusses intraday trades of Tesla (TSLA) stock after it reversed from a double bottom pattern and trended higher throughout the day.
- Positive company news around vehicle deliveries and an interview with Elon Musk helped propel the stock higher.
- The author entered and exited several call option positions in TSLA throughout the day, capturing a total of 20 points in profits from the intraday momentum moves.
- They were happy with their trade entries and exits but acknowledged struggles deciding between intraday versus swing trades, and were content to close positions at the end of the day.
The document discusses a short trade idea on Seagate Technology (STX) stock. It notes that Seagate announced weaker than expected preliminary Q3 2016 financial results, driving the stock down 11% in pre-market trading. Charts of STX and the S&P 500 are presented, along with trade strategy details such as looking for continuation of the down move on STX and adding to positions at important support levels. Management guidelines emphasize using multiple time frames and technical levels to enter and exit the trade.
This helpful presentation takes an in depth look into the many issues surrounding this important topic in the hedge fund industry, clearing up misconceptions and offering a thorough explanation of the reasons behind offshore investing.
Included in this presentation among other topics, users will find information regarding:
How hedge funds are structured
The composition of hedge fund investors
Reasons why investors choose offshore hedge funds
The various domiciles in which hedge funds operate
How hedge funds accommodate the needs of various investors
Learn more about the global hedge fund industry at: www.hedgefundfundamentals.com.
The document discusses various options trading strategies, including:
1) Buying call options to profit from an expected rise in the market. This strategy has unlimited upside potential but limited downside risk of the premium paid.
2) Buying put options to profit from an expected fall in the market. This also has unlimited upside potential and limited downside risk of the premium.
3) Holding stock and selling covered calls to generate income from the stock holding when a neutral market is expected. This caps upside potential in exchange for the option premium received.
The document explains the mechanics and risk-reward profiles of these and other options strategies through the use of diagrams and payoff tables.
This document discusses risk management and money management strategies for trading systems. It covers:
1) Calculating and measuring risk related to money management and differentiating between diversifiable and correlated risk.
2) Determining optimal position size using formulas like risk of ruin, theory of runs, and Kelly criterion to maximize returns while minimizing risk of ruin.
3) The importance of initial capital, as a series of early losses could wipe out a trading account before it has time to perform as expected. Proper money management is key to managing both the expected and unexpected risks in a trading system.
The document summarizes various options strategies that can be used based on different market outlooks. It describes bullish, bearish, neutral, and volatile market strategies using calls, puts, spreads, and combinations. For example, it explains that buying a call is a bullish strategy that profits if the market rises above the strike price, while selling a put is also bullish but profits from premium received if the market stays flat or rises.
The document discusses parameters, test data, and evaluating robustness for system testing. It notes that parameters like moving averages and stop losses should be identified for testing. Both in-sample and out-of-sample data are important to test on, including addressing price shocks. Robustness is evaluated by testing across different parameter values and market conditions over long periods. A robust system works consistently under various scenarios.
A simple trading strategy for beginners with only use daily candlestcik to set the pending order buy and sell. IT is suitable for beginners to start trading forex. IT tells where to set the pending oders, where to put stop loss and and how much the target profits.
This document discusses various options trading strategies, including:
1. Long call - buyer is bullish on the underlying asset and pays a premium for the right to buy it at a set price.
2. Short call - writer is bearish and collects premium but has obligation to sell the asset if exercised.
3. Covered call - involves buying the asset and writing a call to generate income but limits upside.
4. Long put - buyer is bearish and pays premium for right to sell the asset at a set price.
5. Short put - writer is bullish and collects premium but has obligation to buy the asset if exercised.
It provides details on the risk and reward
The document is a Haiku Deck presentation that contains 16 photos credited to different photographers on Instagram and other sites. Each photo is credited to a different photographer or source. The presentation encourages the viewer to get inspired and create their own Haiku Deck presentation on SlideShare.
The document discusses risk and return in investments. It defines key concepts such as realized and expected return, ex-ante and ex-post returns, sources and measurements of risk including standard deviation and coefficient of variation. It also discusses the risk-return tradeoff and how higher risk investments require higher potential returns to compensate for additional risk.
Options are excellent tools for both position trading and risk management, but finding the right strategy is key to using these tools to your advantage. This presentation helps you understand what options are and how they work
Meeting 3 - Mechanism of trading (Capital market)Albina Gaisina
This document discusses the mechanisms of trading in capital markets. It covers the major assets that trade, including money markets, fixed income markets, equity markets, and derivative markets. It also covers the differences between primary and secondary markets, with primary markets involving the initial sale of securities to raise capital for the issuing company and secondary markets involving the resale of securities between investors with no funds going to the company. The document outlines the order information flows and types of orders involved in primary and secondary market trading.
SMB Training provides trader education and training through online courses and in-person seminars. The document discusses 5 lessons from the prop desk, including trade strategies, new trading setups, and examples of trades in MAT, CSX, and ATI. It also profiles a successful trader named Nadal who discovered his edge in trading low-float stocks through SMB's college training program. The document emphasizes finding a trading niche, consistently working to trade larger sizes, and taking advantage of short squeezes in highly shorted low-float stocks.
This document provides an introduction to portfolio management. It defines a portfolio as a collection of investments held as a group by professional institutions, asset management corporations, and individual investors. The key objective of portfolio management is to maximize returns from investments at a given level of risk. This involves investing in and divesting different assets while managing risk. Portfolios are evaluated using models like Markowitz portfolio theory and modern portfolio theory to measure expected return and risk. Factors like market risk, credit risk, and operational risk must be continuously monitored and managed.
The document provides information about SMB Training, which offers educational seminars and training courses on trading. It states that SMB Training is not a broker dealer, but rather focuses on trader education. It also offers both online and in-person training products and services. The document emphasizes that the seminars and information provided are for educational purposes only, and that participants are fully responsible for their own investment decisions.
How does a professional trader spent the day? Here's how. Learn best practices that you can turn into habit to improve your trading performance. This PP was presented during SMB Premium, smbu.com/premium. We hope it helps. mbellafore@smbcap.com.
http://profitabletradingtips.com/trading-investing/trading-stock-options
Trading Stock Options
Trading stock options holds two definite advantages over trading stocks directly. A smart trader can certainly make money trading stocks. But by trading stock options the same trader can limit risk and leverage his trading capital.
What Are Options?
Options are contracts that give their buyers the right, not the obligation, to sell or purchase the underlying assets at a future date, within the term of the contract. Whether it is in stock options trading or in trading commodities like corn futures, trading options allows the investor to invest trading capital using a variety of strategies. A call option gives the buyer the right to buy and a put option gives the buyer the right to sell the underlying stock. Sellers are paid a premium for taking on the risk of having to buy or sell at a loss when the buyer chooses to execute his contract. Options are used to both hedge risk and to leverage trading capital.
Hedging Risk and Leveraging Capital
In trading stock options a buyer limits his risk to the premium paid. Let us say that your fundamental and technical analysis of ABC stock indicates that it will soon rise in price. You can buy a hundred share of ABC for $100 a share or $10,000. Or you may see that you can buy a $102 option on ABC for $1. A $102 option means that you can buy to stock for $102 a share at any time up until the end of the contract. Obviously the stock is currently worth $100 a share and you would not want to execute the contract. But, if your analysis is correct the stock price will go up. Let us say that the stock goes up to $110 a share. If you purchased the stock you make $1000 minus fees and commissions. That is a ten percent return on investment. And if the stock price falls to $90 a share you lose $1000, ten percent of your trading capital. But in trading stock options on ABC you pay $100 for a $102 call option on 100 shares. The stock goes up to $110. You execute the contract and purchase the stock for $102 a share and then sell for $110 a share. You make $8 a share or $800 which is a $700 profit or 700% return on invested capital. And, if the stock price falls to $90 you lose your initial $100 and no more.
Short and Long Term
Trading stock options is not just for short term profits. Let us say that you have purchased a hot growth stock. It has multiplied in value
Join CMT Level 1, 2 & 3 Program Courses & become a professional Technical Analyst, CMT USA Best COACHING CLASSES. CMT Institute Live Classes by Expert Faculty. Exams are available in India. Best Career in Financial Market.
https://www.ptaindia.com/chartered-market-technician/
The document outlines a 5-step swing trading blueprint for managing risk and executing trades. Step 1 is risk management, which teaches how to set risk parameters like trade allocation as a percentage of core equity. It provides examples of conservative, moderate, and aggressive fixed risk models using 1-4% of equity. The optimal trade allocation depends on account size, with smaller accounts using a higher percentage and larger accounts a lower percentage. Overall, the first step establishes how much money can be risked for each trade based on the trader's risk tolerance and account characteristics.
: Security and Portfolio Analysis :Efficient market theoryRahulKaushik108
Key Concepts of Efficient market theory: Very Lucid presentation , very Useful for MBA student to understand the Concepts of Efficient Market theory( Random walk hypotheses ) .The key idea of the hypotheses is" no one can efficiently out predict the market" or in other terms, technical analysis or fundamental analysis can not beat "the naive buy and hold strategy".
The power to predict basics and advanced forex analysisPower Point
1) The document discusses advanced techniques for analyzing currency markets, including the use of pivots, Elliot waves, and Fibonacci to predict market movements and find high probability entry and exit points.
2) Pivots including support/resistance levels, moving averages, and trend lines are described as the basics for finding key market levels, with examples given on charts.
3) Elliot wave theory and Fibonacci retracements/extensions are presented as more advanced techniques for analyzing market emotions and structure. Examples on charts show how these can predict movements.
4) The author promotes their website, newsletter, and broker for learning these techniques through free courses and trading support.
The best swing trading strategies are the ones that allow you to trade and profit from your beliefs about the market. I have added some of the most popular swing trading indicators as a guide for you to explore. The swing trading indicators listed here focus on trend trading, volatility, and overbought/oversold conditions.
This document discusses portfolio analysis and selection based on modern portfolio theory. It defines key terms like portfolio, phases of portfolio selection, the Markowitz model, efficient frontier, diversification and the optimum portfolio. The Markowitz model uses a mean-variance framework to identify efficient portfolios that maximize return for a given level of risk. An optimum portfolio provides the highest expected return for its risk level by balancing risk across different asset classes through diversification.
Hedge funds are like mutual funds in some ways. Investment professionals in a hedge fund pool in money from investors to be managed - exactly like the mutual funds do. And, subject to some minor restrictions, investors in hedge funds can withdraw their money as they can in a mutual fund. Nothing else is similar.
Join CMT Level 1, 2 & 3 Program Courses & become a professional Technical Analyst, CMT USA Best COACHING CLASSES. CMT Institute Live Classes by Expert Faculty. Exams are available in India. Best Career in Financial Market.
https://www.ptaindia.com/chartered-market-technician/
This document provides information about an investment strategy that focuses on identifying high-quality companies trading at reasonable prices. It discusses analyzing companies using fundamental factors like durable competitive advantages, favorable industry outlooks, high-caliber management, and reasonable prices. The strategy involves learning from other great investors, focusing on companies with growth potential, and preferring to invest when markets are down. It provides lists of recommended books on value investing and companies the strategy currently likes. The document emphasizes understanding a company's business economics, risks, and financial statements through detailed analysis.
This document provides information about an investment strategy that focuses on identifying high-quality companies trading at attractive prices. Some key points:
- They seek companies with durable competitive advantages, favorable long-term industry outlooks, high-caliber management teams, and prices that make sense.
- Their process involves analyzing a company's business strategy, risks, financials, management, and competitive position to understand the long-term potential.
- They believe this approach of finding well-run businesses at good prices, holding for the long run, and mitigating risk through diversification can outperform the market over time.
- However, they also acknowledge the inherent instability of markets and importance of patience, as opportunities
This document discusses various options trading strategies, including:
1. Long call - buyer is bullish on the underlying asset and pays a premium for the right to buy it at a set price.
2. Short call - writer is bearish and collects premium but has obligation to sell the asset if exercised.
3. Covered call - involves buying the asset and writing a call to generate income but limits upside.
4. Long put - buyer is bearish and pays premium for right to sell the asset at a set price.
5. Short put - writer is bullish and collects premium but has obligation to buy the asset if exercised.
It provides details on the risk and reward
The document is a Haiku Deck presentation that contains 16 photos credited to different photographers on Instagram and other sites. Each photo is credited to a different photographer or source. The presentation encourages the viewer to get inspired and create their own Haiku Deck presentation on SlideShare.
The document discusses risk and return in investments. It defines key concepts such as realized and expected return, ex-ante and ex-post returns, sources and measurements of risk including standard deviation and coefficient of variation. It also discusses the risk-return tradeoff and how higher risk investments require higher potential returns to compensate for additional risk.
Options are excellent tools for both position trading and risk management, but finding the right strategy is key to using these tools to your advantage. This presentation helps you understand what options are and how they work
Meeting 3 - Mechanism of trading (Capital market)Albina Gaisina
This document discusses the mechanisms of trading in capital markets. It covers the major assets that trade, including money markets, fixed income markets, equity markets, and derivative markets. It also covers the differences between primary and secondary markets, with primary markets involving the initial sale of securities to raise capital for the issuing company and secondary markets involving the resale of securities between investors with no funds going to the company. The document outlines the order information flows and types of orders involved in primary and secondary market trading.
SMB Training provides trader education and training through online courses and in-person seminars. The document discusses 5 lessons from the prop desk, including trade strategies, new trading setups, and examples of trades in MAT, CSX, and ATI. It also profiles a successful trader named Nadal who discovered his edge in trading low-float stocks through SMB's college training program. The document emphasizes finding a trading niche, consistently working to trade larger sizes, and taking advantage of short squeezes in highly shorted low-float stocks.
This document provides an introduction to portfolio management. It defines a portfolio as a collection of investments held as a group by professional institutions, asset management corporations, and individual investors. The key objective of portfolio management is to maximize returns from investments at a given level of risk. This involves investing in and divesting different assets while managing risk. Portfolios are evaluated using models like Markowitz portfolio theory and modern portfolio theory to measure expected return and risk. Factors like market risk, credit risk, and operational risk must be continuously monitored and managed.
The document provides information about SMB Training, which offers educational seminars and training courses on trading. It states that SMB Training is not a broker dealer, but rather focuses on trader education. It also offers both online and in-person training products and services. The document emphasizes that the seminars and information provided are for educational purposes only, and that participants are fully responsible for their own investment decisions.
How does a professional trader spent the day? Here's how. Learn best practices that you can turn into habit to improve your trading performance. This PP was presented during SMB Premium, smbu.com/premium. We hope it helps. mbellafore@smbcap.com.
http://profitabletradingtips.com/trading-investing/trading-stock-options
Trading Stock Options
Trading stock options holds two definite advantages over trading stocks directly. A smart trader can certainly make money trading stocks. But by trading stock options the same trader can limit risk and leverage his trading capital.
What Are Options?
Options are contracts that give their buyers the right, not the obligation, to sell or purchase the underlying assets at a future date, within the term of the contract. Whether it is in stock options trading or in trading commodities like corn futures, trading options allows the investor to invest trading capital using a variety of strategies. A call option gives the buyer the right to buy and a put option gives the buyer the right to sell the underlying stock. Sellers are paid a premium for taking on the risk of having to buy or sell at a loss when the buyer chooses to execute his contract. Options are used to both hedge risk and to leverage trading capital.
Hedging Risk and Leveraging Capital
In trading stock options a buyer limits his risk to the premium paid. Let us say that your fundamental and technical analysis of ABC stock indicates that it will soon rise in price. You can buy a hundred share of ABC for $100 a share or $10,000. Or you may see that you can buy a $102 option on ABC for $1. A $102 option means that you can buy to stock for $102 a share at any time up until the end of the contract. Obviously the stock is currently worth $100 a share and you would not want to execute the contract. But, if your analysis is correct the stock price will go up. Let us say that the stock goes up to $110 a share. If you purchased the stock you make $1000 minus fees and commissions. That is a ten percent return on investment. And if the stock price falls to $90 a share you lose $1000, ten percent of your trading capital. But in trading stock options on ABC you pay $100 for a $102 call option on 100 shares. The stock goes up to $110. You execute the contract and purchase the stock for $102 a share and then sell for $110 a share. You make $8 a share or $800 which is a $700 profit or 700% return on invested capital. And, if the stock price falls to $90 you lose your initial $100 and no more.
Short and Long Term
Trading stock options is not just for short term profits. Let us say that you have purchased a hot growth stock. It has multiplied in value
Join CMT Level 1, 2 & 3 Program Courses & become a professional Technical Analyst, CMT USA Best COACHING CLASSES. CMT Institute Live Classes by Expert Faculty. Exams are available in India. Best Career in Financial Market.
https://www.ptaindia.com/chartered-market-technician/
The document outlines a 5-step swing trading blueprint for managing risk and executing trades. Step 1 is risk management, which teaches how to set risk parameters like trade allocation as a percentage of core equity. It provides examples of conservative, moderate, and aggressive fixed risk models using 1-4% of equity. The optimal trade allocation depends on account size, with smaller accounts using a higher percentage and larger accounts a lower percentage. Overall, the first step establishes how much money can be risked for each trade based on the trader's risk tolerance and account characteristics.
: Security and Portfolio Analysis :Efficient market theoryRahulKaushik108
Key Concepts of Efficient market theory: Very Lucid presentation , very Useful for MBA student to understand the Concepts of Efficient Market theory( Random walk hypotheses ) .The key idea of the hypotheses is" no one can efficiently out predict the market" or in other terms, technical analysis or fundamental analysis can not beat "the naive buy and hold strategy".
The power to predict basics and advanced forex analysisPower Point
1) The document discusses advanced techniques for analyzing currency markets, including the use of pivots, Elliot waves, and Fibonacci to predict market movements and find high probability entry and exit points.
2) Pivots including support/resistance levels, moving averages, and trend lines are described as the basics for finding key market levels, with examples given on charts.
3) Elliot wave theory and Fibonacci retracements/extensions are presented as more advanced techniques for analyzing market emotions and structure. Examples on charts show how these can predict movements.
4) The author promotes their website, newsletter, and broker for learning these techniques through free courses and trading support.
The best swing trading strategies are the ones that allow you to trade and profit from your beliefs about the market. I have added some of the most popular swing trading indicators as a guide for you to explore. The swing trading indicators listed here focus on trend trading, volatility, and overbought/oversold conditions.
This document discusses portfolio analysis and selection based on modern portfolio theory. It defines key terms like portfolio, phases of portfolio selection, the Markowitz model, efficient frontier, diversification and the optimum portfolio. The Markowitz model uses a mean-variance framework to identify efficient portfolios that maximize return for a given level of risk. An optimum portfolio provides the highest expected return for its risk level by balancing risk across different asset classes through diversification.
Hedge funds are like mutual funds in some ways. Investment professionals in a hedge fund pool in money from investors to be managed - exactly like the mutual funds do. And, subject to some minor restrictions, investors in hedge funds can withdraw their money as they can in a mutual fund. Nothing else is similar.
Join CMT Level 1, 2 & 3 Program Courses & become a professional Technical Analyst, CMT USA Best COACHING CLASSES. CMT Institute Live Classes by Expert Faculty. Exams are available in India. Best Career in Financial Market.
https://www.ptaindia.com/chartered-market-technician/
This document provides information about an investment strategy that focuses on identifying high-quality companies trading at reasonable prices. It discusses analyzing companies using fundamental factors like durable competitive advantages, favorable industry outlooks, high-caliber management, and reasonable prices. The strategy involves learning from other great investors, focusing on companies with growth potential, and preferring to invest when markets are down. It provides lists of recommended books on value investing and companies the strategy currently likes. The document emphasizes understanding a company's business economics, risks, and financial statements through detailed analysis.
This document provides information about an investment strategy that focuses on identifying high-quality companies trading at attractive prices. Some key points:
- They seek companies with durable competitive advantages, favorable long-term industry outlooks, high-caliber management teams, and prices that make sense.
- Their process involves analyzing a company's business strategy, risks, financials, management, and competitive position to understand the long-term potential.
- They believe this approach of finding well-run businesses at good prices, holding for the long run, and mitigating risk through diversification can outperform the market over time.
- However, they also acknowledge the inherent instability of markets and importance of patience, as opportunities
This document provides information about an investment strategy that focuses on identifying high-quality companies trading at reasonable prices. It discusses analyzing companies' competitive advantages, management quality, financials and risks. Key aspects of the strategy include:
- Focusing on companies with durable competitive advantages, favorable industry outlooks, and high-caliber management.
- Conducting thorough fundamental analysis to deeply understand a company's business economics.
- Creating a concentrated portfolio of strong, predictable companies acquired at a sensible price.
Zeke Ashton of Centaur Capital Partners presented ten rules of value investing based on the teachings of Benjamin Graham and Warren Buffett. The rules included defining value investing as buying assets for less than their intrinsic value, having a margin of safety, being an absolute return investor, knowing when to sell, and many ways to achieve returns in value investing. Ashton also provided an analysis of American Oriental Biotech as a top investment idea, highlighting its growth through acquisitions in China.
The document outlines an investment philosophy that focuses on long-term compound growth rather than quick riches. It emphasizes patience and understanding principles over short-term tactics. The approach seeks high-quality businesses with durable competitive advantages, predictable cash flows, and strong management rather than focusing on short-term price fluctuations.
The document outlines Joe Kostner's final decision checklist that he uses before making an investment. It contains 8 items that evaluate whether the decision maker is tired, has done sufficient research, understands the business, has conservative balance sheet and good management, provides value to customers, has downside protection from a moat or assets, and has significantly more upside than downside potential. The checklist is meant to help stay disciplined and avoid mistakes by fully understanding a business before investment.
This document discusses key lessons Charlie Munger has shared about "moats", which refers to sustainable competitive advantages that allow businesses to generate high returns. The document makes several points:
1) Understanding moats is essential for investors to determine which companies have durable competitive advantages. The five main factors that can create moats are economies of scale, network effects, brand, regulation, and intellectual property.
2) Simply identifying companies with strong moats is not enough - an investor must also buy those companies at attractive prices relative to their assets and earnings in order to achieve success. Even the best businesses will not generate good returns if purchased at too high of a price.
3) While moats are complex, long
Benjamin Graham was an influential American economist and investor who is considered the father of value investing. He wrote two influential books, Security Analysis and The Intelligent Investor. The Intelligent Investor teaches the distinction between investing and speculation, with investing focused on analyzing companies and protecting against losses, while speculation aims for extraordinary gains. It also covers topics like how to select stocks, dealing with market fluctuations, and the importance of a margin of safety. The book has been hugely influential on investors like Warren Buffett and remains one of the foundational texts on value investing.
Warren Buffet, also known as the oracle of Omaha, is no stranger to the world of investing. There’s a lot to learn from the most successful (and did we also mention, the richest) man in the world of investing. Here are six lessons from Warren Buffett that you can use to invest better.
This document provides an overview of different types of stocks and strategies for investing in stocks. It discusses:
- Different categories of stocks including growth stocks, blue-chip stocks, income stocks, cyclical stocks, defensive stocks, value stocks, and speculative stocks.
- Key factors to evaluate when choosing stocks including earnings per share, price-earnings ratio, dividend yield, and book value per share. The document recommends focusing on stocks that meet most of these value criteria.
- Long-term investment strategies like dollar-cost averaging, reinvesting dividends, and avoiding common investor mistakes.
So in summary, the document outlines different stock types, key metrics to evaluate stocks, and long-term
The 25 smartest things warren buffett ever saidChessy Cherian
The document summarizes 25 of Warren Buffett's most memorable quotes about investing and business. Some of the key insights included are to only invest in businesses you understand and that you would be happy holding for 10 years, that the stock market serves to transfer money from the impatient to the patient, and that Buffett's favorite holding period is forever for outstanding businesses with outstanding management.
The five rules for successful stock investing .pptxRishabhShah368192
The document summarizes key points from the first three chapters of the book "The Five rules of successful investing – Part 1". It outlines the five rules of successful investing which are to do your homework, find economic moats, have a margin of safety, hold for the long haul, and know when to sell. It then discusses seven common mistakes to avoid which are swinging for the fences, believing it's different this time, falling in love with products, panicking when the market is down, trying to time the market, ignoring valuation, and relying only on earnings. Finally, it covers the importance of analyzing a company's economic moats to understand their sustained competitive advantages.
This document summarizes Peter Coenen's investment approach. He looks for companies with high and sustainable returns on capital (ROC) and growth (GROWTH), indicating their "value creation engine" is running well. Specifically, he focuses on companies earning a ROC over 20% using tangible assets and growing free cash flow per share. He believes this approach is more accurate than discounted cash flow models. Coenen also emphasizes the importance of patience, as it can take years for an investment to succeed.
The document discusses developing the conviction to hold winning stock investments for the long term in order to achieve significant returns. It argues that discipline is required to hold investments through periods where the stock price stagnates or consolidates, and that the biggest gains come from allowing winners to run. Maintaining thorough knowledge of a company's business through ongoing due diligence is key to having the conviction to ignore price fluctuations and hold on to strong performers. Selling based only on changes to the underlying business fundamentals, not arbitrary price targets, is advised. Patience is important, as multi-bagger returns often materialize over several years rather than quickly.
This document provides information about Aegis Wealth Advisors, an independent financial advisory firm. It includes a letter from the president welcoming the reader and encouraging them to schedule a meeting. The document then provides details about the firm, including its mission to help clients optimize, preserve and protect their assets. It lists various informational materials enclosed for the reader, including the firm's profile, investment strategy, a list of "10 Things All Successful Investors Should Know", information on getting a second opinion, and client bill of rights.
Introduction to financial spread bettingMade To Trade
Spread betting allows investors to profit from the movements of shares, currencies, commodities, and other assets without owning the underlying asset. It provides leverage and tax advantages over traditional investments. While it offers potential for high returns, spread betting also carries significant risks like unlimited losses. Key considerations for spread betting include understanding margins, spreads, orders types, and choosing a broker with low costs, a good platform, education resources, and customer service.
The document provides quotes from 20 famous investors such as Warren Buffett, George Soros, and Peter Lynch. Some of the key ideas expressed in the quotes include:
- Warren Buffett emphasizes the importance of value over price when investing.
- George Soros stresses the need to recognize mistakes to be successful as an investor.
- Several investors advise patience, taking a long-term view, and not overreacting to short-term fluctuations.
All intelligent investing is value investingJAE JUN
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PepsiCo (PEP)
Procter & Gamble (PG)
Sysco Corporation (SYY)
Wal-Mart (WMT)
Walgreens Boots Alliance (WBA)
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Illinois Tool Works (ITW)
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Pentair (PNR)
Roper Technologies (ROP)
Stanley Black & Decker (SWK)
W.W. Grainger (GWW)
General Dynamics (GD)
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Lowe’s (LOW)
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Franklin Resources (BEN)
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T. Rowe Price Group (TROW)
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Consumer Staples
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2. Sure Dividend
Table of Contents
1. On Evaluating Businesses
2. On Long-Term Investing
3. On Do-Nothing Investing
4. On The Circle of Competence
5. On Competitive Advantages
6. On Value & When to Buy
7. On When To Sell
8. On Risk
9. On Personal Finance
10. On Learning & Self-Improvement
11. On Charity & Legacies
12. On History and Forecasting
13. On Crowd Thinking
14. On Investing Best Practices
15. On Corporate Management
3. Sure Dividend
On Evaluating Businesses
“We select such investments on a long-term basis, weighing the
same factors as would be involved in the purchase of 100% of an
operating business:
(1) favorable long-term economic characteristics;
(2) competent and honest management;
(3) purchase price attractive when measured against the
yardstick of value to a private owner; and
(4) an industry with which we are familiar and whose long-term
business characteristics we feel competent to judge.”
4. Sure Dividend
On Long-Term Investing
Warren Buffett is an extraordinarily long-term investor.
His investing style is characterized by holding periods that
span decades. The following quotes illustrate this nicely:
“I never attempt to make money on the stock market. I
buy on the assumption that they could close the market
the next day and not reopen it for five years.”
“Only buy something that you’d be perfectly happy to
hold if the market shut down for 10 years.”
“If you aren’t willing to own a stock for ten years, don’t
even think about owning it for ten minutes”
5. Sure Dividend
On Long-Term Investing
“When we own portions of outstanding
businesses with outstanding
managements, our favorite holding
period is forever.”
“Time is the friend of the wonderful
company, the enemy of the mediocre.”
6. Sure Dividend
On Long-Term Investing
“Over the long term, the stock market news
will be good. In the 20th century, the United
States endured two world wars and other
traumatic and expensive military conflicts;
the Depression; a dozen or so recessions and
financial panics; oil shocks; a fly epidemic;
and the resignation of a disgraced president.
Yet the Dow rose from 66 to 11,497.”
7. Sure Dividend
On Long-Term Investing
One of the benefits of long holding periods is the deferral of
capital gains tax, which is only triggered when an investor sells.
Because of Buffett’s notably long holding periods, the deferral of
capital gains tax has been called a “Buffett Loan”.
With that said, Warren Buffett maintains that he would still have
long holding periods even without these tax advantages:
“Charlie and I would follow a buy-and-hold policy even if we ran
a tax-exempt institution.”
8. Sure Dividend
On Long-Term Investing
Warren Buffett is also known for
being very patient:
“Someone’s sitting in the shade today
because someone planted a tree a
long time ago.”
“Calling someone who trades actively
in the market an investor is like calling
someone who repeatedly engages in
one-night stands a romantic.”
9. Sure Dividend
On Long-Term Investing
“Successful Investing takes time, discipline and
patience. No matter how great the talent or effort,
some things just take time: You can’t produce a baby in
one month by getting nine women pregnant.”
“Buy a stock the way you would buy a house.
Understand and like it such that you’d be content to
own it in the absence of any market.”
10. Sure Dividend
On Do-Nothing Investing
Warren Buffett & his business colleagues have
been known to make so much money with do-
nothing investing that they describe it with the
word ‘assiduity’:
“Assiduity is the ability to sit on your ass and do
nothing until a great opportunities presents itself.”
– Charlie Munger (Warren Buffett’s business
partner and Vice Chairman of Berkshire Hathaway)
11. Sure Dividend
On Do-Nothing Investing
“I call investing the greatest business
in the world … because you never
have to swing. You stand at the plate,
the pitcher throws you General
Motors at 47! U.S. Steel at 39! and
nobody calls a strike on you. There’s
no penalty except opportunity lost.
All day you wait for the pitch you like;
then when the fielders are asleep,
you step up and hit it.”
12. Sure Dividend
On Do-Nothing Investing
“You do things when the
opportunities come along. I’ve had
periods in my life when I’ve had a
bundle of ideas come along, and I’ve
had long dry spells. If I get an idea
next week, I’ll do something. If not, I
won’t do a damn thing.”
13. Sure Dividend
On Do-Nothing Investing
“Opportunities
come infrequently.
When it rains gold,
put out the bucket,
not the thimble.”
14. Sure Dividend
On Do-Nothing Investing
“You only have to do a very few things right in your life
so long as you don’t do too many things wrong.”
“It is not necessary to do extraordinary things to get
extraordinary results.”
“An investor should act as though he had a lifetime
decision card with just twenty punches on it.”
15. Sure Dividend
On Do-Nothing Investing
“I insist on a lot of time being
spent, almost every day, to
just sit and think. That is very
uncommon in American
business. I read and think. So
I do more reading and
thinking, and make less
impulse decisions than most
people in business.”
16. Sure Dividend
On the Circle of Competence
Warren Buffett has often preached that investors should identify
their ‘circle of competence’ – an area that they are
knowledgeable about – and stick to that area. This is a highly
applicable concept for investors, as the following quote
demonstrates:
“What an investor needs is the ability to correctly evaluate
selected businesses. Note that word ‘selected’: You don’t have
to be an expert on every company, or even many. You only have
to be able to evaluate companies within your circle of
competence. The size of that circle is not very important;
knowing its boundaries, however, is vital.”
17. Sure Dividend
On the Circle of Competence
What’s more important than knowing what’s in your circle of
competence is knowing what’s not in your circle of competence:
“What counts for most people in investing is not how much they
know, but rather how realistically they define what they don’t
know.”
Similarly,
“There is nothing wrong with a ‘know nothing’ investor who
realizes it. The problem is when you are a ‘know nothing’
investor but you think you know something.”
18. Sure Dividend
On the Circle of Competence
“We make no attempt to pick the few
winners that will emerge from an ocean of
unproven enterprises. We’re not smart
enough to do that, and we know it. Instead,
we try to apply Aesop’s 2,600-year-old
equation to opportunities in which we have
reasonable confidence as to how many birds
are in the bush and when they will emerge.”
19. Sure Dividend
On Competitive Advantages
Warren Buffett has often touted the benefits of investing in the best
businesses - as measured by the strength of their competitive
advantages. The following quotes illustrate this nicely:
“The key to investing is not assessing how much an industry is going to
affect society, or how much it will grow, but rather determining the
competitive advantage of any given company and, above all, the
durability of that advantage.”
“The best thing is to learn from other guy’s mistakes. [General George S.]
Patton used to say, “It’s an honor to die for your country; make sure the
other guy gets the honor.” There are a lot of mistakes that I’ve repeated.
The biggest one, the biggest category over time, is being reluctant to pay
up a little for a business that I knew was really outstanding.”
20. Sure Dividend
On Competitive Advantages
Conversely, Buffett has recommended avoiding companies that lack
competitive advantages. He has often called these companies
‘commodity businesses’ because their only ability to compete is on price.
Here’s Buffett’s thoughts on commodity businesses:
“Stocks of companies selling commodity-like products should come with a
warning label: ‘Competition may prove hazardous to human wealth.’”
Commodity businesses that have found a way to survive are not great
businesses. The analogy below emphasizes this point:
“A horse that can count to ten is a remarkable horse—not a remarkable
mathematician.”
21. Sure Dividend
On Competitive Advantages
“Our approach is very
much profiting from
lack of change rather
than from change. With
Wrigley chewing gum,
it’s the lack of change
that appeals to me.”
22. Sure Dividend
On Value & When To Buy
Influenced by Benjamin Graham,
Warren Buffett has long practiced
value investing.
“Long ago, Ben Graham taught me that
‘Price is what you pay; value is what
you get.’ Whether we’re talking about
socks or stocks, I like buying quality
merchandise when it is marked down.”
23. Sure Dividend
On Value & When To Buy
As his career developed, Warren Buffett changed his focus from value
investing to franchise investing – buying the best businesses when their
price was fair.
“It’s far better to buy a wonderful company at a fair price than a fair
company at a wonderful price.”
His focus on value remained a key component of his investing strategy.
“For the investor, a too-high purchase price for the stock of an excellent
company can undo the effects of a subsequent decade of favorable
business developments.”
24. Sure Dividend
On Value & When To Buy
With that said, he remained a contrarian:
“Most people get interested in stocks when everyone
else is. The time to get interested is when no one else is.
You can’t buy what is popular and do well.”
“The best thing that happens to us is when a great
company gets into temporary trouble…We want to buy
them when they’re on the operating table.”
25. Sure Dividend
On Value & When To Buy
“Be fearful when others are greedy and greedy only when others are
fearful.”
He also maintains that investors should welcome recessions – since they
present the opportunity to buy more shares of high-quality businesses on
the cheap.
“So smile when you read a headline that says ‘Investors lose as market
falls.’ Edit it in your mind to ‘Disinvestors lose as market falls—but
investors gain.’ Though writers often forget this truism, there is a buyer
for every seller and what hurts one necessarily helps the other.”
26. Sure Dividend
On Value & When To Buy
“The most common cause of low prices is
pessimism—some times pervasive, some
times specific to a company or industry. We
want to do business in such an environment,
not because we like pessimism but because
we like the prices it produces. It’s optimism
that is the enemy of the rational buyer.”
27. Sure Dividend
On When To Sell
“Should you find yourself in a
chronically leaking boat, energy
devoted to changing vessels is
likely to be more productive than
energy devoted to patching leaks.”
“The most important thing to do if
you find yourself in a hole is to
stop digging.”
28. Sure Dividend
On Risk
Warren Buffett is notoriously risk-averse. With that said, he does not
measure risk by volatility (as many academic researchers do). Here’s
Warren Buffett’s definition of risk:
“Risk comes from not knowing what you’re doing.”
Risk causes investors to lose money, which breaks Buffett’s rule #1:
“Rule No. 1: never lose money; rule No. 2: don’t forget rule No. 1.”
“When forced to choose, I will not trade even a night’s sleep for the
chance of extra profits.”
29. Sure Dividend
On Risk
Warren Buffett’s unconventional views
on risk lead him to manage a highly
concentrated investment portfolio. At the
time of this writing,
Warren Buffett’s stock portfolio has
~64% of its capital invested into his five
largest positions.
“Keep all your eggs in one basket, but
watch that basket closely.”
“Diversification is a protection against
ignorance. It makes very little sense for
those who know what they’re doing.”
30. Sure Dividend
On Risk
“We believe that a policy of portfolio concentration may well
decrease risk if it raises, as it should, both the intensity with
which an investor thinks about a business and the comfort-level
he must feel with its economic characteristics before buying into
it. In stating this opinion, we define risk, using dictionary terms,
as “the possibility of loss or injury.”
“It’s only when the tide goes out that you learn who has been
swimming naked.”
31. Sure Dividend
On Risk
“When you combine ignorance and leverage, you get
some pretty interesting results.”
“I’ve seen more people fail because of liquor and
leverage – leverage being borrowed money. You really
don’t need leverage in this world much. If you’re smart,
you’re going to make a lot of money without
borrowing.”
32. Sure Dividend
On Personal Finance
“I always knew I was going to be
rich. I don’t think I ever doubted it
for a minute. ”
“People always ask me where they
should go to work, and I always tell
them to go to work for whom they
admire the most.”
33. Sure Dividend
On Personal Finance
“Never give up searching for the job that you
are passionate about”
“…not doing what we love in the name of
greed is very poor management of our lives.”
34. Sure Dividend
On Personal Finance
“I learned to go into business only with people
whom I like, trust, and admire.”
“In the world of business, the people who are most
successful are those who are doing what they
love.”
35. Sure Dividend
On Personal Finance
“There comes a time when you ought to start
doing what you want. Take a job that you love. You
will jump out of bed in the morning. I think you are
out of your mind if you keep taking jobs that you
don’t like because you think it will look good on
your resume. Isn’t that a little like saving up sex for
your old age?”
36. Sure Dividend
On Personal Finance
“I’m not interested in cars and my
goal is not to make people envious.
Don’t confuse the cost of living with
the standard of living.”
“Do not save what is left after
spending; instead spend what is left
after saving.”
“If you buy things you do not need,
soon you will have to sell things you
need.”
37. Sure Dividend
On Learning &
Self-Improvement
“Chains of habit are too light to be felt until they are too heavy to be
broken.”
“By the age of 10, I’d read every book in the Omaha public library about
investing, some twice. You need to fill your mind with various competing
thoughts and decide which make sense. Then you have to jump in the
water – take a small amount of money and do it yourself. Investing on
paper is like reading a romance novel vs. doing something else. You’ll
soon find out whether you like it. The earlier you start, the better.”
38. Sure Dividend
On Learning &
Self-Improvement
“The most important investment you can make is in yourself.”
“Imagine that you had a car and that was the only car you’d have
for your entire lifetime. Of course, you’d care for it well,
changing the oil more frequently than necessary, driving
carefully, etc. Now, consider that you only have one mind and
one body. Prepare them for life, care for them. You can enhance
your mind over time. A person’s main asset is themselves, so
preserve and enhance yourself.”
39. Sure Dividend
On Learning &
Self-Improvement
“Life is like a snowball. The important thing is
finding wet snow and a really long hill. ”
“You’ve gotta keep control of your time, and
you can’t unless you say no. You can’t let
people set your agenda in life.”
40. Sure Dividend
On Learning &
Self-Improvement
“The difference between successful people and
really successful people is that really successful
people say no to almost everything.”
“It’s better to hang out with people better than
you. Pick out associates whose behavior is better
than yours and you’ll drift in that direction.”
41. Sure Dividend
On Learning &
Self-Improvement
How do you know when someone is serious? According to
Warren Buffet, it’s when their bank account comes into play.
“Writing a check separates a commitment from a conversation.”
Who we associate with and who we look up to matters. It gives a
reflection of who we are and who we are going to be.”
“Tell me who your heroes are and I’ll tell you how you’ll turn out
to be.”
42. Sure Dividend
On Learning &
Self-Improvement
“It takes 20 years to build a reputation and five minutes to ruin
it. If you think about that, you’ll do things differently.”
That’s why it is so important to associate with honest people.
The importance of honesty can hardly be overstated.
“Honesty is a very expensive gift, don’t expect it from cheap
people.”
43. Sure Dividend
On Charity and Legacies
Despite being a capitalist at heart, Buffett is actually extremely generous. You can see
this in his observable behavior.
First, Buffett makes the point of saving jobs in his company as long as they are
economically viable. The quote below shows this interesting viewpoint:
“I won’t close down a business of subnormal profitability merely to add a fraction of a
point to our corporate returns. I also feel it inappropriate for even an exceptionally
profitable company to fund an operation once it appears to have unending losses in
prospect. Adam Smith would disagree with my first proposition and Karl Marx would
disagree with my second; the middle ground is the only position that leaves me
comfortable.”
44. Sure Dividend
On Charity and Legacies
“I don’t have a problem with guilt about money. The way I see it is that
my money represents an enormous number of claim checks on society.
It’s like I have these little pieces of paper that I can turn into
consumption. If I wanted to, I could hire 10,000 people to do nothing but
paint my picture every day for the rest of my life. And the GDP would go
up. But the utility of the product would be zilch, and I would be keeping
those 10,000 people from doing AIDS research, or teaching, or nursing. I
don’t do that though. I don’t use very many of those claim checks. There’s
nothing material I want very much. And I’m going to give virtually all of
those claim checks to charity when my wife and I die.”
45. Sure Dividend
On Charity and Legacies
“If your employees, including
your CEO, wish to give to their
alma maters or other
institutions to which they feel a
personal attachment, we
believe they should use their
own money, not yours.”
46. Sure Dividend
On Charity and Legacies
“I believe in giving my kids enough
so they can do anything, but not so
much that they can do nothing.”
47. Sure Dividend
On History and Forecasting
“We’ve long felt that the only value of stock forecasters
is to make fortune tellers look good. Even now, Charlie
and I continue to believe that short-term market
forecasts are poison and should be kept locked up in a
safe place, away from children and also from grown-ups
who behave in the market like children.”
“Forecasts may tell you a great deal about the
forecaster; they tell you nothing about the future.”
48. Sure Dividend
On History and Forecasting
“In the 54 years (Charlie Munger and I) have
worked together, we have never forgone an
attractive purchase because of the macro or
political environment, or the views of other
people. In fact, these subjects never come up
when we make decisions.”
49. Sure Dividend
On History and Forecasting
“In the business world, the rearview mirror is always clearer than
the windshield.”
“What we learn from history is that people don’t learn from
history.”
“If past history was all that is needed to play the game of money,
the richest people would be librarians.”
50. Sure Dividend
On History and Forecasting
“Investors should be skeptical of history-based
models. Constructed by a nerdy-sounding
priesthood using esoteric terms such as beta,
gamma, sigma and the like, these models tend to
look impressive. Too often, though, investors
forget to examine the assumptions behind the
models. Beware of geeks bearing formulas.”
51. Sure Dividend
On Crowd Thinking
“You need to divorce your mind from the
crowd. The herd mentality causes all these IQ’s
to become paralyzed. I don’t think investors are
now acting more intelligently, despite the
intelligence. Smart doesn’t always equal
rational. To be a successful investor you must
divorce yourself from the fears and greed of the
people around you, although it is almost
impossible.”
“Nothing sedates rationality like large doses of
effortless money.”
52. Sure Dividend
On Crowd Thinking
“In a bull market, one must avoid the error of the preening duck that
quacks boastfully after a torrential rainstorm, thinking that its paddling
skills have caused it to rise in the world. A right-thinking duck would
instead compare its position after the downpour to that of the other
ducks on the pond.”
“Failing conventionally is the route to go; as a group, lemmings may have
a rotten image, but no individual lemming has ever received bad press.”
53. Sure Dividend
On Crowd Thinking
“What the wise do in the beginning, fools do in the end.”
“But a pin lies in wait for every bubble. And when the two eventually
meet, a new wave of investors learns some very old lessons: First, many
in Wall Street — a community in which quality control is not prized — will
sell investors anything they will buy. Second, speculation is most
dangerous when it looks easiest.”
54. Sure Dividend
On Crowd Thinking
“The most important quality for an investor is temperament, not
intellect. You need a temperament that neither derives great
pleasure from being with the crowd or against the crowd.”
“You’re dealing with a lot of silly people in the marketplace; it’s
like a great big casino and everyone else is boozing. If you can
stick with Pepsi, you should be O.K.”
55. Sure Dividend
On Crowd Thinking
“In some corner of the world they are probably still
holding regular meetings of the Flat Earth Society. We
derive no comfort because important people, vocal
people, or great numbers of people agree with us. Nor
do we derive comfort if they don’t.”
56. Sure Dividend
On Investing Best Practices
Buffett believes it takes intensity and passion to succeed in the stock market:
“Intensity is the price of excellence.”
With that said, he doesn’t tend to make things harder than they have to be.
“I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”
“There seems to be some perverse human characteristic that likes to make easy things
difficult”
57. Sure Dividend
On Investing Best Practices
If you don’t ‘get’ investing, don’t keep investing in individual businesses. It’s far better to
invest in high quality dividend ETFs than to play a game where you are the patsy.
“If you’ve been playing poker for half an hour and you still don’t know who the patsy is,
you’re the patsy.”
Keeping with the analogy of investing and games, one should look out for the next great
investment opportunity – not obsess over past performance.
“Games are won by players who focus on the playing field –- not by those whose eyes are
glued to the scoreboard.”
58. Sure Dividend
On Investing Best Practices
“You shouldn’t own common stocks if a 50% decrease in their value in a short period of
time would cause you acute distress.”
You cannot be successful in your investing career and be constantly swayed by changing
opinions of outsiders. It’s very important to believe in yourself and trust your judgement.
“I had a great teacher in life in my father. But I had another great teacher in terms of
profession in terms of Ben Graham. I was lucky enough to get the right foundation very
early on. And then basically I didn’t listen to anybody else. I just look in the mirror every
morning and the mirror always agrees with me. And I go out and do what I believe I
should be doing. And I’m not influenced by what other people think.”
59. Sure Dividend
On Corporate Management
“I try to buy stock in businesses that are so wonderful that an
idiot can run them because sooner or later, one will.”
“When a management with a reputation for brilliance tackles a
business with a reputation for bad economics, it is the reputation
of the business that remains intact.”
60. Sure Dividend
On Corporate Management
“Loss of focus is what most worries Charlie and me
when we contemplate investing in businesses that in
general look outstanding. All too often, we’ve seen
value stagnate in the presence of hubris or of boredom
that caused the attention of managers to wander.
61. Sure Dividend
On Corporate Management
“Talking to Time Magazine a few years back, Peter Drucker got to
the heart of things: ‘I will tell you a secret: Dealmaking beats
working. Dealmaking is exciting and fun, and working is grubby.
Running anything is primarily an enormous amount of grubby
detail work . . . dealmaking is romantic, sexy. That’s why you
have deals that make no sense.’”
62. Sure Dividend
On Corporate Management
“In the long run
managements stressing
accounting appearance over
economic substance usually
achieve little of either.”
63. Sure Dividend
On Corporate Management
“Rationality frequently wilts when the institutional imperative comes into play. For
example:
(1) As if governed by Newton’s First Law of Motion, an institution will resist any change in
its current direction;
(2) Just as work expands to fill available time, corporate projects or acquisitions will
materialize to soak up available funds;
(3) Any business craving of the leader, however foolish, will be quickly supported by
detailed rate-of-return and strategic studies prepared by his troops; and
(4) The behavior of peer companies, whether they are expanding, acquiring, setting
executive compensation or whatever, will be mindlessly imitated.”
64. Sure Dividend
On Corporate Management
“Culture, more than rule books, determines how an organization behaves.”
“Having first-rate people on the team is more important than designing hierarchies and clarifying who
reports to whom.”
“Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence,
and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you
hire somebody without [integrity], you really want them to be dumb and lazy.”
“If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But, if each
of us hires people who are bigger than we are, we shall become a company of giants.”