Common stocks, bonds, active investing and the power of compounding
Almost all investors will know about compounding. But, it’s hard to get through your head what it can really do.
active investing
The smartest active managers are not conditioned to sell outperformers
The decision to sell a stock is, in many ways, trickier than the decision to buy. My own observation is that investors in common stocks should never be conditioned to sell outperformers. There is a time to fold ‘em. But its not simply because their price has outperformed the market or some benchmark.
Market (In)Efficiency and beating the market
Behavioral inefficiencies are likely the most enduring because human nature has not changed much over time and is unlikely to change much in the future.
How I invest my money
We think the very term ‘value investing’ is redundant.
The more things change…
Before practice, opportunity, and luck can combine to create expertise, the would-be expert needs to demythologize the achievement of top-level performance, because the notion that genius is born, not made, is deeply ingrained
Active investing in today’s investment landscape
Most trading that is going on right now has nothing to do with value
How I invest my money
Our asset allocation has not changed in twenty-three years. It has been 100% allocated to common stocks. Prior to that, that is prior to the fall of 2002, we had been 100% in two-year government bonds for five years.
My thoughts on the Buffett Indicator – current Market Cap to GDP
The best cash flow measure is Warren Buffett’s Owner Earnings. If that is increasing faster than GDP, the fair value of companies will increase faster than GDP
Owning an equal part of every business in town
Buffett is right for an actively managed portfolio and Greenblatt is right for a passive portfolio
Investment strategy – the best defense is a good offense
And if a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.
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