Greenblatt on Value Investing

Earlier this year Wharton released a video where Howard Marks interviewed Joel Greenblatt. It was a short interview packed with wisdom from the two value investors.

Greenblatt first came across value investing after reading Ben Graham, which offered him a new perspective on investing. He defines value investing perfectly:

Figure out what something is worth, pay a lot less, leaving a large margin of safety.

He repeated this definition several times during the interview. Most people never get past the first part, but he offers two guarantees to those that do the work. Continue Reading…

The Art of Losing Money

If we avoid the losersAny chump can bet all their money on a single stock and get wiped out. But it takes a special kind of genius to invest and consistently lose money in the market. They follow one mistake with another, compounding their losses with opportunity cost. To avoid the same fate, we can steal a few lessons in how to lose money from the great investors who came before us.

Warren Buffett repeats his two simple rules often:

Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.

Easy enough. I use the same rules in Vegas and I swear it never fails.

But you know better. Right?

Never losing is impossible. Anyone who tells you different is lying. The great investors know losing is part of investing. They lose money better than anyone. Continue Reading…

Some Perspective On One-Day Market Losses

I spent some time Monday morning watching reactions to the stock market. Thanks to social media, everyone has a front row seat to the greatest sideshow on Earth – investor behavior. Monday did not disappoint.

I have two Twitter accounts, one for the site where I follow a wide range of financial types (broken into groups: top finance, financial advisors, value investors, and financial media. BTW, value investors were the most calm – well done!) and a personal account that follows non-finance folks. Continue Reading…

Marks on His Investment Philosophy

Howard Marks gave a talk at Google back in March ’15 where he covered the origin of his investment philosophy. I scribbled some notes as watched it. I thought it was time to organize things and post it here.

His book, The Most Important Thing, is his investment philosophy. He admits that his most important things have changed over time. His thinking is always evolving. The goal was to show that investing is hard, counterintuitive, and to teach people how to think.

During the talk, Marks highlights where the roots of his philosophy started: Continue Reading…