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Category: Investing

5 Things I Learned As An Investor In 2020

5 Things I Learned As An Investor In 2020

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Last year was a challenging one for investors all over the world. As the pandemic spread around the globe in February and March, shockwaves rippled through global financial markets.  Central banks acted quickly to flood the financial system with liquidity avoiding a full-blown economic crisis. This deluge of money went on to spark one of the most aggressive market recoveries of all time.  Markets went from being utterly distressed to euphoric in just a few months.  Now, one year on…

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Mohnish Pabrai: The Greatest Lesson Of 2020

Mohnish Pabrai: The Greatest Lesson Of 2020

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At the end of January, value investor Mohnish Pabrai held a virtual Q&A session with Clemson University students. In the 45-minute session, the investor discussed what he called the “second-highest period of learning and growth” he’s experienced as an investor. Last year was a period of learning for Pabrai, and he’s attributed the bulk of this learning to his “good friend” Nick Sleep. Sleep ran an investment partnership I’ve covered before on this blog: The Nomad Investment Partnership. The partnership…

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5 Takeaways From Warren Buffett’s Annual Letter

5 Takeaways From Warren Buffett’s Annual Letter

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Warren Buffett published his annual letter to investors over the weekend. The publication of this letter has become a significant event in the investment calendar.  In the annual correspondence, the CEO of Berkshire Hathaway usually provides his thoughts on the current state of the market and offers advice for readers on the topic of investing.  Here are my top five takeaways from the annual letter.  The power of share repurchases In 2018, Berkshire Hathaway changed its share repurchase policy. Previously,…

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Property Investing And The Advantages of an Illiquid Asset

Property Investing And The Advantages of an Illiquid Asset

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Real estate is a great way to build wealth, and owning property has made a lot of people a lot of money over the years. However, equity investing has yielded similar, if not better results over the years (although this varies from market to market and depends on which benchmark you use.) The one primary difference between real estate investing and equity investing, however, is liquidity. The liquidity issue It is very well known that investors are their own worst…

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Why Debt Is Like Russian Roulette

Why Debt Is Like Russian Roulette

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Since the mid-1950s, global indebtedness has exploded to record levels. At the beginning of 2019, the IMF reported global debt reached an all-time high of $184 trillion in nominal terms at the end of 2018, equivalent to 225% of 2017 GDP. On a per capita basis, the world’s debt now exceeds $86,000, which according to the IMF is “more than 2½ times the average income-per-capita.” Further data show that the private sector’s debt has tripled since 1950 making it “the…

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Mohnish Pabrai: The Most Common Mistake Investors Make

Mohnish Pabrai: The Most Common Mistake Investors Make

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Mohnish Pabrai is widely considered to be one of the best value investors managing money today. He runs the Pabrai Investment Funds, a group of hedge funds modelled on Buffett’s original partnerships. Returns since inception have been highly impressive. $100,000 invested with Pabrai on July 1, 1999 (inception) was worth $1,164,600 at the end of 2018, a compound annual return of 13.4% net of fees. I’ve learned quite a bit from reading and listening to Pabrai’s advice over the years,…

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Seth Klarman On Catalysts In Value Investing

Seth Klarman On Catalysts In Value Investing

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One of the most frustrating scenarios to be faced with as an investor is a stagnant stock price. You’ve done all the hard work, analysed the company correctly, invested at a deep discount to intrinsic value and waited patiently only for the stock to trend sideways for years. In areas of the market where mispricings are most common, particularly in small-cap and micro-cap stocks, this scenario is all too common. It can take years for a stock to close the…

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Extract From The Upcoming Hidden Value Stocks Q1 2019 Issue

Extract From The Upcoming Hidden Value Stocks Q1 2019 Issue

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An extract from the Q1 2019 issue of Hidden Value Stocks. The issue features two interviews with emerging hedge fund managers, Gate City Capital Management and Breach Inlet. This is an extract from the interview with Breach Inlet. To discover more about Hidden Value Stocks scroll down. What traits are you initially looking for in an opportunity? To put it another way, what makes you say “yes” or “no that is too hard”? We are generalists, but avoid companies heavily…

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The Permanent Portfolio And Joel Greenblatt’s Big Secret

The Permanent Portfolio And Joel Greenblatt’s Big Secret

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I recently wrote an article for Gurufocus.com on an asset allocation strategy called the ‘Permanent Portfolio’ (PP). For readers who don’t know, or who haven’t heard about this portfolio approach before, it was first published in the 1970s by Harry Browne, a U.S. writer and politician (book). Browne’s goal was to create a simple portfolio that would be easy to manage and protect his wealth in all market environments. The approach is simple, Browne recommended investors separate their wealth into…

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Negative Shareholder Equity Isn’t All That Bad After All

Negative Shareholder Equity Isn’t All That Bad After All

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In many respects, the style of value investing is built around shareholder equity and book value. Benjamin Graham and David Dodd built their net-nets investment strategy on book value, with the logic that if you could buy a stock for less than liquidation value, you would make money. Since Graham and Dodd published their landmark text, Security Analysis in 1934, many other studies have reached the same conclusion, particularly the research by Eugene Fama and Kenneth French. However, over the past two…

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