Novel Investor • Page 6 of 13 • Compounding investing wisdom...

Walter Schloss on Not Trying to Be Warren Buffett

June 6, 2018

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Jon

Walter Schloss was a master of humility. In all my reading, he’s probably the most humble investor…and honest, straightforward, and simplistic.

He’s no Warren Buffett. He knew it. And he didn’t try to be him either.

What did he get for not emulating Buffett? Very little attention for one. Few people knew he existed until Buffett outed him in The Superinvestors of Graham and Doddsville in 1984.

He also built a decent track record for himself even though he fell a little short of Buffett’s (20.5% annually over 45 years — 1956 to 2000).

The few interviews he sat for, he was always asked about Buffett and their association. And he always had a great answer for why he never invested like Buffett: Continue Reading…
Happy Hour: Tracking Index Returns

June 1, 2018

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Jon

The Google Finance portfolio tracker was updated earlier this year. The “update” was more like a horrendous downgrade. It removed all the useful features until there was nothing left worth using. I’m not entirely sure what Google was thinking.

Since then, I looked for a replacement to no avail. I settled on using a spreadsheet via Google Sheets to track things.

I also used Google Finance to track the performance of indexes, factors, and alternative strategies via a corresponding ETF. It didn’t get heavy use but it was convenient to have everything in one place.

Creating something similar in a spreadsheet has been on my to-do list. So I tackled that this week. Turns out, it works better in a spreadsheet. Here’s the result (links to copy and explanation are below): Continue Reading…
Philip Carret: The Classic Tale of Novice Mistakes

May 30, 2018

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Jon

On paper, investing seems easy enough. Stock prices fluctuate. All you have to do is simply buy a stock and sell it at a higher price. It’s a magical idea. Just repeat until wealthy.

Philip Carret outlines the typical experience a novice investor goes through as they come to realize investing is not nearly as easy as it appears on paper.

The novice learns that no such simple plan of operations as this will work. His experience, however, does not shake his confidence in the axiom that stock prices are consistently fluctuating. Indeed, the next stage of progress of the novice — a stage beyond which many traders never get at all — comes with the observation that the prices of securities fluctuate considerably from day to day and week to week.

A confident novice is a deadly combination. With all those stocks flopping around which do you buy? The one you hear about, of course. Continue Reading…
Happy Hour: Second Guessing the Process

May 25, 2018

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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…
Happy Hour: Howard Marks on the Two Risks

May 18, 2018

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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…
The 22 Maxims of John Templeton

May 16, 2018

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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…

Walter Schloss on Not Trying to Be Warren Buffett

Happy Hour: Tracking Index Returns

Philip Carret: The Classic Tale of Novice Mistakes

Happy Hour: Second Guessing the Process

Happy Hour: Howard Marks on the Two Risks

The 22 Maxims of John Templeton