Investing

Ben Graham’s return was largely delivered by GEICO

(Excerpt from The Psychology of Money by Morgan Housel) Benjamin Graham is known as one of the greatest investors of all time, the father of value investing and the early mentor of Warren Buffett. But the majority of...

September 26, 2020| Investing, Luck, Randomness Read More

BCG Growth Share Matrix

(Excerpt from The Star Principle by Richard Koch) There is a branch of business theory called strategy , which was invented by a new consulting firm, the Boston Consulting Group (BCG), in the 1960s. BCG’s most famous...

September 6, 2020| Investing, Matrix, Strategy Read More

Investing strategies need to evolve

(Excerpt from Keep Running! By Morgan Housel) In his book Investing, Robert Hagstrom wrote about strategies that once worked but eventually withered: In the 1930s and 1940s, the discount-to-hard-book-value strategy...

July 31, 2020| Adaptability, Investing, Map Is Not Territory Read More

Evaluate each business based on a couple of unique factors

(Excerpt from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Each business will have a couple of unique factors that are essential in evaluating its progress. Often, those unique factors are not...

May 10, 2020| Investing Read More

This is probably why Buffett bought airlines

(Excerpt from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Buffett said this is the number one question he would ask of himself: why is Berkshire investing in capital-intensive businesses?...

May 5, 2020| Investing Read More

You win by losing less

(Excerpt from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) He Charlie Munger claimed that his best ideas haven’t done better than others’ best ideas, but he’s lost less on his worst...

April 11, 2020| Fallibility, Inversion, Investing, Via Negativa Read More

Globalisation introduces volatility spikes

(Excerpt from “The Interesting Times” email 21 Mar 2020 by Taylor Pearson) As a thought experiment, imagine 100 ladders lined up against a long wall. Each has a 10% probability of falling over. If the...

March 22, 2020| Entropy, Investing, Nonlinearity, World Read More

A mistake is made if you had legit confidence about something but you fail to act big

(Extracted from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Munger observed that the most extreme mistakes in Berkshire’s history show up as opportunity costs. … In his younger...

March 20, 2020| Circle of Competence, Investing, Kelly Criterion, Life Read More

Stock as a bond with an unknown coupon rate

(Extracted from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Buffett explained that buying a business is much like buying a bond with no maturity and with a blank coupon. You must write...

March 10, 2020| Investing Read More

Book value is what you have put into the business

(Extracted from University of Berkshire Hathaway by Daniel Pecaut and Corey Wrenn) Buffett also noted that book value is seldom meaningful in analyzing the value of a business. Book value simply records what was put...

March 10, 2020| Investing Read More

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