Compounding investing wisdom...
by Jon
An algorithm is simply a set of rules or a process to automate decisions.
It can be highly complex or as simple as you want to make it. It can be rigid or flexible. It can be precise or good enough. There is a range of opinions on all of those possibilities as to what is best.
The one thing Daniel Kahneman knows is that algorithms are better than humans when making decisions (emphasis mine): Continue Reading…
by Jon
There’s a long history of market timing methods that work some of the time. The search for the holy grail strategy to get in and out of the market just before every turn has been a failed endeavor. That hasn’t stopped people from trying to find it or using the latest and greatest method that worked twice in a row.
I’ve been reading a series of articles written by Philip Carret in 1926-27. Buffett was a big fan of his (so I did some digging). Carret would base a book on the series — The Art of Speculation — titled with the same name.
Despite the title, Carret was a value investor. He would go on to found one of the first mutual funds in 1928, ran it for the next 55 years while beating the market in the process. He also had a solid understanding of market history, market cycles, and the tendencies of its participants.
In one article, he points out why market timing methods fail eventually and how difficult forecasting can be. Continue Reading…
by Jon
Every bull market ends. When this one ends is anyone’s guess. But that won’t stop people from asking when or guessing either.
The fact that nobody knows when doesn’t stop the repeatedly asked question that comes up in some form of: should you own stocks?
It gets asked daily by business news hosts. They ask it during bear markets too. It’s a silly question.
Howard Marks offered his views on the bull market and that question specifically at the start of the week. Here’s what he said. Continue Reading…
by Jon
Sir John Templeton is probably best known for introducing international investing to U.S. investors. He was the global bargain hunter.
But before all that, he was a Yale graduate, a Rhodes Scholar, and a world traveler (on 90 pounds of poker winnings at Oxford). After the globe-trotting, he landed a job on Wall Street, before opening his own firm four years later.
Templeton’s Growth Fund, created in 1954, went on to earn about a 14% annual return over the next 38 years when he retired in 1992.
He famously bought stocks in 1939 as WWII broke out. He recounted the story in a 1997 interview. Continue Reading…
by Jon
Warren Buffett and Charlie Munger always do several interviews after the Berkshire meeting is over. But before we get to that, here’s something I saw on Twitter the day of the meeting.
CNBC created a Buffett archive of every annual meeting going back to 1994 and transcribed each one too. It also has Buffett’s CNBC interviews, a documentary, and more. It’s a huge resource.
Now, to the interviews. Two stood out (links are below). I’m only going to highlight a few things. Most of it is straightforward, I think, but I added my thoughts to some. Continue Reading…
by Jon
The Q&A session at the BRK meeting can be repetitive if you’ve seen it a few times. The questions are often the same. The answers are too, especially those pertaining to failure, mistakes, behavior, investment philosophy, and the “secret sauce” to Buffett’s investing success.
It can be a little monotonous and boring hearing the same thing over and over again. There has to be something more, right?
Each year, I try to mix it up, but the reality is timeless investing advice is rather mundane and repetitive.
That’s the brilliance of it.
Investing success is largely a boring endeavor achieved over decades. Buffett’s and Munger’s answers are the same because the advice hasn’t changed in a ridiculously long time. It’s not meant to be flashy. So don’t over think it.
Let’s dive into the notes. Continue Reading…
