Happy Hour: Marks on Cycles

If you’re not listening to the Masters in Business podcast, you’re missing out. The podcast has become a free, weekly course on investing, business, psychology, and more. I set aside time some time each week to listen. If you have any interest in learning more, subscribe and do the same. You won’t regret it.

This week’s guest teacher was Howard Marks. Marks is one of the most followed people in the industry because of his Memos. Continue Reading…

Investor Returns When the Market Seems to Go Nowhere

Show a chart of a bear market and I guarantee someone will say:  The market went nowhere for years. What a terrible investment! Who would want to own stocks that long just to break even? How are you supposed to make money if it happens again? 

Of course, it’s true. The market did go nowhere. Invested money went somewhere. An index, like the S&P 500, is not the same as investor returns.

To the untrained eye, the assumption is investors made no money during that time. I’m sure many investors didn’t. But some investors did. And neither’s returns looked anything like the chart. Continue Reading…

Happy Hour: Munger on Cash Hogs

I ran across a PDF where Charlie Munger explains the important difference between companies that make more money than they know what to do with (cash cows) versus companies that always need cash to maintain growth (cash hogs).

So cash cows are obviously better than hogs. And the best cash cows have some type moat – pricing power, economies of scale – and a great capital allocator. See’s Candy is a good example. Continue Reading…

Happy Hour: China Rout

In the last post, I mentioned that China’s stock market is in freefall since about the middle of June and how it would be a great case study in investor behavior.

My lack of elaboration caused some confusion around the statement and the chart. So I thought I’d clear one thing up – the MSCI China Index is very different from China’s stock market.

Continue Reading…