The South Sea Bubble, The History of Corporations and The Cryptocraze

People who have read my blog for some time know that besides value investing, I am a big fan of historic events. The South Sea bubble – recap One of the most interesting historical stock bubbles was clearly the famous “South Sea Bubble” which peaked and collapsed around 1720. Besides the fact that Sir Isaac Newton lost a …

Mohnish Pabrai’s Top 10 Rules For Success

http://www.youtube.com/watch?v=jw54ImT9YEw

Common Sense and Knowledge of Business is Important

Warren Buffett strongly instructs us to think for ourselves. He uses his own perspective—acquired from years understanding businesses, his vast knowledge of business—to assess business opportunities, appraise their value, and profit from them. He advocates using our own talents and specialties to invest in the areas of business where we feel most comfortable. He terms …

12 Books Every Investor Should Read

If you’re looking for something to read that will improve your ability as an investor, I’d recommend any of the books below. All 12 of them are deeply informative and will leave an impact on you. 1. The Intelligent Investor by Benjamin Graham Described as “by far the best book on investing ever written” by …

Charlie Munger on Uncommon Sense

From Poor Charlie's Almanack: Organized common (or uncommon) sense--very basic knowledge--is an enormously powerful tool. There are huge dangers with computers. People calculate too much and think too little.   Part of [having uncommon sense] is being able to tune out folly, as opposed to recognizing wisdom. If you bat away many things, you don't …

The Forgotten Simplicity of Investing

Investing is easy. Or rather, the concept of investing is easy – we are business owners and it’s nothing more than that. How much would you buy a kid’s lemonade stand for? When the single lemonade stand becomes a million stands, the decision becomes more difficult as we get caught up with other technicalities. Sometimes, …

The Science of Investing

Experience is a flawed teacher, not history. That is why investing must be scientific and not subjective or emotional. Though it sometimes is hijacked by ideologues, the scientific method works. The most successful societies entrust scientifically trained workers with the most specialized tasks, such as performing brain surgery, designing airplanes, and setting market wide interest …

The “Big Tent” of Value Investing : Approaches, Lessons, Ideas

Value Investing Approaches: Selected Value-oriented Idea Generation Approaches (That We Like) “Magic Formula” Advocated by Joel Greenblatt High ROCE, high EBIT/EV Earnings-based Sum-of-the-parts A staple approach of activists Investment case often rests on monetizing non-core and/or excess assets Earnings-and/or asset-based “Net-Nets” (and similar deep value strategies) Advocated by Ben Graham (Current assets minus total liabilities) …

Components of Return on Invested Capital

What are the components of Return on Invested Capital ? Since Return on Capital is a core value driver for a company, it makes sense to break down ROIC into its main components. That will help us to evaluate a company's economic characteristics, more easily. Return on Invested Capital is defined as follows: ROIC = …

Opportunities for Patient Investors – Seth Klarman & Jason Zweig

Munger on patience

Variant Perceptions

How many different things has Wesco done since Blue Chip Stamps? We’ve only bought two or three companies and made a few big stock purchases. We’ve probably made a significant decision every two years.

But nobody manages money this way. For one thing, clients won’t want to pay you.

But this is not fun, watching and waiting, for people who have an action bias. Too much action bias is dangerous, especially if you’re already rich.

It takes character to sit there with all that cash and do nothing. I didn’t get to where I am by going after mediocre opportunities.

There are a lot of things we pass on. We have three baskets: in, out and too tough. A lot of stuff goes into the ‘too tough’ basket. We can’t do that if it’s a problem at a Berkshire subsidiary company, but if we don’t own it, we just pass. I…

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Avoiding Value Traps

What Are Value Traps Value traps arise when the attractive price valuation turns out to be an illusion. The stock has recently underperformed and now looks inexpensive in terms of valuation metrics, making it a target on the value investor screening process. The final result is that investors caught with these stocks end up overpaying …

Value Investing : Compelled to Buy or Sell Just because it Seems Fashionable?

Successful investors tend to buy what’s out of favor rather than what’s popular. They spend far more time reading things like business publications and financial reports than watching the ticker or television shows about the market. Successful investors understand and profit from reversion to the mean rather than projecting the recent past indefinitely into the …

Thoughts on Investment Approach

Below are some points that help describe my investment philosophy. Strategy My firm has a simple investment objective: to compound our capital at high rates over the long term with minimal risk of permanent capital loss. Our investment strategy is to make meaningful investments in high quality, predictable businesses that can be expected to compound …

Worldly-Wisdom from Charlie Munger

I’m a huge fan of Charlie Munger — Warren Buffett’s right-hand man at Berkshire Hathaway. For those of you unfamiliar with him, listening to his famous talk, the Psychology of Human Misjudgment, will have you instantly hooked. If that doesn’t get you going, check out his two step process for making effective decisions. Recently Munger …

A Classic Example of Why Discipline and Wealth Go Hand-in-Hand

A great quote from The Warren Buffett Way, Third Edition, (2014) by Robert G. Hagstrom. The difference between Warren Buffett and most investors has more to do with discipline than just about any other quality. There are plenty of smart investors, and most of them failed to deliver results that compare with Buffett. I picked up the …

A Fireside Chat With Charlie Munger

By : Jason Zweig Among investors and admirers of Berkshire Hathaway Inc., Charles T. Munger is famous as the laconic foil to the company’s chairman, the voluble Warren Buffett. At the annual shareholders’ meeting in Omaha each spring, Mr. Buffett speaks in long paragraphs; Mr. Munger speaks in zingers and, most often, simply says: “I …

Why Benjamin Graham is Relevant Today

I first read about the forefather of value investing, Benjamin Graham, in the late 1990s. In the investing world, value investors have never been in the majority (or even the plurality), but Graham had then, and still has, a strong following. I was interested that a historical figure would have so much influence in modern …

Best Investment Advice from 15 Legendary Investors

As a small investor, the rules suggest that you must invest in stocks with a long term view of five to eight years and diversify portfolio with debt and gold. Legendary investors, however, have their own style and timeline. While some prefer to hold investments for indefinite period other would sell at a good profit. …

Warren Buffet Biography Video

We have covered detailed biography of Warren Buffett in our earlier post. Now this post showing Warren Buffett Biography Video on You tube. https://www.youtube.com/watch?v=ouiA9sovPIM