Edge
Article

Three Sources of “Edge”

 Analytical edge o Investment framework; smarts/IQ; experience; technical expertise (in a sector/security/geography/etc.)  Psychological edge o Willingness to bear pain and delay gratification; avoidance of (or ability to exploit) fear and greed; lack of interest in one’s popular perception; willingness and ability to go against the crowd when appropriate.  Institutional edge o Properly […]

Re-Investment
Article

Great Re-Investment Opportunities

“After ten years in the job, a CEO whose company retains earnings equal to 10% of net worth, will have been responsible for the deployment of more than 60% of all capital at work in the business.” Warren Buffett “Over a period of years, our thinking has focused more and more on the issue  of reinvestment as the single most critical […]

Mistakes
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Charlie Munger on Mistakes

Biggest mistakes Munger: “The most extreme mistakes in Berkshire’s history have been mistakes of omission. We saw it, but didn’t act on it. They’re huge mistakes — we’ve lost billions. And we keep doing it. We’re getting better at it. We never get over it.” “There are two types of mistakes: 1) doing nothing; what […]

Commodity price cycle
Article

The Economic/Commodity price cycle

Cyclical companies are at the mercy of the economic cycle. While it is true that good management and the right strategic and business choices can make some cyclical firms less exposed to movements in the economy, the odds are high that all cyclical companies will see revenues decrease in the face of a significant economic […]

economic machine
Article

Ray Dalio explain how the economic machine works

Transactions are the economy The economy is made up of millions of transactions between people, government and businesses. When we exchange money or credit with someone for goods, services or financial assets, a transaction is created. The action of spending drives the economy – one person’s spending is another person’s income. Credit is important and […]

DIVIDENDS
Article

WHY DIVIDENDS ARE IMPORTANT

Over the long term, the return from dividends has been a significant contributor to the total returns produced by equity securities in markets studied. Stocks with high and apparently sustainable dividend yields that are competitive with high quality bond yields may be more resistant to a decline in price than lower-yielding securities because the stock […]

Aesop and Inefficient Bush Theory
Article

Aesop and Inefficient Bush Theory

The formula for valuing all assets that are purchased for financial gain has been unchanged since it was first laid out by a very smart man in about 600 B.C. (though he wasn’t smart enough to know it was 600 B.C.). The Oracle was Aesop and his enduring, though somewhat incomplete, investment insight was ” […]

Leonardo da Vinci
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Leonardo da Vinci: How to See the World Like Nobody Else

When the word “Renaissance” is spoken, no one comes to mind faster than da Vinci. Not only was he the embodiment of an artist, but he was also a prolific inventor who contributed to everything from architecture and music to anatomy and geometry. He simply watched, noted, and contextualized things as he saw fit. It wasn’t like […]

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