Making sense of free cash flow numbers
To understand how a company can lose $256 million in reported earnings in 2020 and yet show FCF that year of $491 million you need to read and understand the company’s cash flow statement.
Concentration risk and the Magnificent Seven
The best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return
Uncertainty is the investor’s best friend
We must be content with hunches and alternative scenarios instead of determinate predictions
The intelligence of successful investors
The mistake many make is to think investing is only about numbers. We invest in businesses, not in financial statements.
The Joy of ‘higher for ever’ interest rates
The combination of a Treasury Note Real Yield of roughly 2% today and Inflation Expectations of roughly 2% is the best and most benign it has been since the 1970’s when inflation caught fire.
Dynamic asset allocation and the Equity Risk Premium
Market and economic structures can shift, undercutting a key basis for using historical data to make predictions
Investors can get scammed on Wall Street
One of his investment funds had the name Consolidated Artists Investment Fund. Get the joke? Con Artist Investment Fund.
Managing yourself
Each post has a list of what Daniel Kahneman, a Nobel Prize winning psychologist, calls risk policies and I call gap-to-edge rules.
Investing when others are fearful
Here were financial people who could seriously consider stocks less safe because they have declined in price
Back to basics about free cash flow
Accounting is but an aid to business thinking, never a substitute for it
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