Friday, December 9, 2016

At the corner of Buffett and Fisher

I’ve drawn a lot of inspiration for my investment strategy primarily from the Buffett and Fishers approaches. I’ll discuss here how I am applying them in my own unique way.
I’ve been reading and drawing inspiration from a lot of different legends in the investment area over the last several years however I think the approaches that have most resonated with me are those that have been utilized by Warren Buffett and Philip Fisher, and to a slightly lesser extent Charlie Munger.
Well I don’t claim to have anywhere near the investment acumen of the three legends of investing. There’s something very unique about how each of these investment giants approaches investing that’s relatable and that gives me confidence to persist with such an approach.
From Buffet and Munger I’ve tapped into a discipline of starting out with businesses that are drowning themselves in the weight of cash that they throw off. That means that they have unique control over their destiny and are not dependent on external conditions.

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Thursday, December 8, 2016

The attraction of compounders Pt 2

I previously discussed my interest in compounding machines. Today, I will expand on this theme a little further.
Last time, I discussed my interest in compounding machines that were able to compound earnings with minimal capital. The other type of compounder or business that is highly valuable is one where capital can be aggressively redeployed at high rates of return to steadily expand and widen the business franchise.
Now while I prefer those businesses that don’t require much capital to produce fairly high long-term rates of business growth, I do also very much like these businesses that have opportunities for reinvestment at high rates of equity also.
The challenge that arises with reinvestment businesses is the certainty of reinvestment at high rates of return. However there are a few examples that I can think of where one can be relatively confident that an investment will produce high rates of return.

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Wednesday, December 7, 2016

Aswath Damodaran Podcast Interview

I was listening to this podcast yesterday and thought that it was a great resource that investors need to hear and keep in mind. It fits in nicely with a lot of the discussion I’ve been having with others in the investing community regarding valuation. It addresses a lot of points that I was trying to make in this post on Market Timing. Have a listen and feel free to share your thoughts/comments below.

Short Bio: Aswath Damodaran is Professor of Finance at New York University Stern School of Business. Professor Damodaran received a B.A. in Accounting from Madras University and a M.S. in Management from the Indian Institute of Management. He earned an M.B.A. (1981) and then Ph.D. (1985), both in Finance, from the University of California, Los Angeles. His student accolades are no less impressive: he has been voted “Professor of the Year” by the graduating M.B.A. class five times during his career at NYU. In addition to myriad publications in academic journals, Professor Damodaran is the author of several highly-regarded and widely-used academic texts on Valuation, Corporate Finance, and Investment Management. Professor Damodaran currently teaches Corporate Finance and Equity Instruments & Markets. His research interests include Information and Prices, Real Estate, and Valuation.

Podcast length: 1hr 22m

Masters in Business: Aswath Damodaran Interview

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Tuesday, December 6, 2016

8 Interesting Income Stocks For Investors With A Long Horizon

When it comes to building long-term wealth, there is no better means than the stock market. 

Even during times of massive social, economic, and geopolitical instability, blue-chip dividend stocks have shown an incredible ability to climb “the wall of worry.”

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