Investment process
The whole shebang
I have been forced to take a different approach with this post. From the gym and working in the garden I’m suffering from an irritated nerve at the base of my spine. I can’t sit or stand for more than about 20 seconds without bad pain. I can’t sit to type. Therapist says four to six weeks. The flowers in the pic are Bloodroot, one of the native plants in our garden. First nations used them as a dye.
The plan of action
So, while I’m on the disabled list I would really encourage readers to embark on a serious study of the earlier 175 plus posts on this blog.
Why should you do that? Because they are all completely relevant today. There is no repetition. I never write about the state of the market or the economy or other ‘of the moment’ stuff. It’s all about the hows and whys of investing for a truly superior performance.
My posts are worth reading because I have beaten the market for 1,3 and 50 years. Year to date April 30, 2023 the total compounded return on our retirement savings has been 9.56% vs 7.50% for the S&P 500. For the last three years our total compounded return was 16.00% vs 13.93% for the S& 500. These numbers come from our discount broker, a unit of Canada’s largest bank. As reported in early January the compound total return on our retirement savings over the last fifty years has been 13.00% as against 10.51% for the S&P 500 with dividends reinvested.
Also the nitty gritty
Successful investing in common stocks involves not only broad principles such as investing in great companies whose earnings will march higher over the years, but also, the nitty gritty. The devil is in the detail. These posts contain not only the broad principles but also, the nitty gritty.
How you can go about it
There are two ways to access what I have written. If you click on the Motherlode tab above you will come to a series of dropdown menus that are like the table of contents at the front of a book. It contains links to what I wrote before I started this blog. It is a much fuller discussion than the posts.
To access the posts, you need to look at the tags index on my home page or as set out below. It works like the alphabetical index at the back of a book.
There is one additional helpful tool. You can do a word search which is located on the right of this page and also just below the tags index on the home page. Want to see what I’ve written about Philip Fisher, just search for Fisher.
To succeed in investing you need insatiable curiosity and the drive to learn all you can about investing. The links below will take you to a wealth of investing wisdom.
Alphabetical index to posts (tags index)
accounting goodwill active investing Affect Heuristic algorithms alpha analysts anchoring animal spirits asset allocation attractive prices availability heuristic averaging down averaging up balance bargain beating the market behavioral biases behavioral edge benchmarking beta bitcoin board bonds book value book value of equity bottom up broad framing bubbles business franchise butterfly effect buying CAPE cash cause causes character charts cognitive errors committees commodities common stocks competition complex adaptive systems complexity compounding concentrated portfolio confirmation bias conservative contrarian thinking conventional conviction correlation crisis crowd cyclical debt equity ratio debt service deflation deliberate practice discipline Discounted Cash Flow discount rate disinflation diversification dividends dual-class shares earnings estimates economic goodwill economic performance Economy efficient markets EMH equity risk premium estate plan ETF Excess CAPE Yield expectation expected return experience FAAMGN fair value fear Federal Reserve Fed Model financial planning financial statements financial strength finding companies Fisher flexibility forecasts framing free cash flow funds from operations GAAP gains gambling gap-to-edge rules gold goodwill Graham greed groupthink growth growth investing growth stocks Halo effect herd Heuristic holiday edition home bias income splitting independent thinking indexing inductive reasoning inefficient markets inelasticity inflation intangible intangible assets intelligence interest rates intrinsic value intuition investment process investment psychology investment style IRR Kelly Criterion KISS learning linear regression long term long term debt long view losers losses Luck madness of crowds management margin of safety margins market timing math maximum pessimism mental accounting millennials mistakes moats models money illusion monitoring narrow framing net earnings news non-stationarity oligopoly opportunities optimism Oreo cookies outlook overconfidence overreaction owner earnings parabolic paradox of skill passive investing path of returns patterns peer pressure performance permacrisis personal qualities polycrisis portfolio management portfolio strategy portfolio structure predictions price price accepting price discovery price earnings price earnings ratio price to book value ratio price to free cash flow ratio priming principles of operation probabilistic probability quantitative analysis random data random walk reading recent past recession reports resilience retained earnings retirement planning return on equity return on invested capital return on tangible common equity returns reward risk risk/reward risk aversion risk intolerance risk management risk policies risk seeking scaling sector rotation selling seven footers Sharpe Ratio short term simple Skill social influence social proofing standard deviation statistics stock market stock picking superb businesses superb companies superior results target prices themes top down total return trading trend Uncertainty value value investing value stocks vivid memories volatility watchlists weighted average cost of capital windfalls winners wisdom of crowds
Conclusion
I’ll be back when I’m on my feet. Enjoy.
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You can reach me by email at rodney@investingmotherlode.com
I’m also on Twitter @rodneylksmith
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