Sunday, 4 March 2018

Act like business owners




“We don’t think of ourselves as buying and selling pieces of paper but rather investing in businesses” Frank Martin

“Stock certificates are deeds of ownership in business enterprises and not betting slips.” J Paul Getty

“Try to establish the value of the company. Remember that a share of stock represents a part of a business and is not just a piece of paper.” Walter Schloss

"People buy a stock and they look at the price next morning and they decide to see if they are doing well or not doing well. It is crazy. They are buying a piece of the business. That is what Graham - the most fundamental part of what he taught me. You are not buying a stock, you are buying part ownership in a business. You will do well if the business does well, if you didn't pay a totally silly price. That is what it is all about." Warren Buffett

“The reality is that stocks are not pieces of paper, offering returns correlated to arbitrary variables, but rather part claims on the future cash flows of businesses, whose returns are driven by changes – and anticipated changes – in these cash flows, as returns on capital respond to developing business environments, most importantly (from our perspective) those resulting from changes in the level of competition as capital enters and exits an industry.” Marathon Asset Management

“You have to think of yourself as an owner of a business, rather than an owner of a piece of paper. You own a small piece so therefore you really don’t control the business. So it’s almost self-defence to demand a large margin of safety because whatever value you perceive may not be there because you can’t control it” Li Lu

"The number one idea is to view stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage"  Charlie Munger

“Stocks are ownership shares of businesses; they are not pieces of paper that bounce around on which you calculate Sharpe and Sortino ratios. They are ownership shares of businesses that we value, and either buy at a discount or short when they are overpriced.” Joel Greenblatt

“The foundation of our investment approach is to consider stocks as if they represent a fractional ownership in real businesses. While this may seem obvious, the vast majority of market participants do not approach stocks in this manner (unconsciously or otherwise) and the predominant emphasis is almost entirely based on the price of stocks over the short term." Francois Rochon

“Our business owner mentality causes us to think about broad macro topics, yet allows us to virtually ignore the constant babble of short term macro noise. In fact, short term macro challenges are often a boon to owners of quality companies, as marginal competitors fade away to the benefit of incumbents” Allan Mechum







Saturday, 10 February 2018

The Four Filters For Develop An Understanding of The Business.


Filter number one: Develop an understanding of the business.

Warren Buffett said it perfectly. “Seek whatever information will further your understanding of the business.”
Charlie is a huge proponent of developing checklists to help him make better decisions, for each company, he develops a checklist to keep him on track. The reason for a different checklist is that every company is different and have different guidelines to follow.
Charlie developed a system of “latticework of mental models” to help him sort through his thoughts and ideas. He used these models to help him think better.
Munger has come to the conclusion that to make better decisions in business and life you need to find and understand the core principles from all disciplines.
In short, learn all the big ideas and how the interrelate and better, more rational thinking will naturally follow.

So how does this help us understand a company?

Step one is to read, read, read all that you can about the company. Shareholder letters, letters from the CEO, 10k filings, 10Q filings. Go to the website and read about all of their products. Look at any references to competitors and read about them. Just about every industry has a newsletter or magazine that follows that particular industry, read those publications for knowledge about the different trends, products, and services that other companies offer.
We do this to get a better understanding of how the company operates, what they produce and who they sell it too. Think about anything you buy for your personal use. Do you buy a cell phone you don’t understand how to use? No way. Think about how these types of decisions affect our buying habits.
These are the types of information we need to digest as we learn more about a particular company. I will give you an example; recently I was looking at a company that produces railroad cars. A pretty simple straightforward business but I noticed something in a 10k that I was reading that mentioned that they were solely dependent on steel as their main resource they used in all of their products. That got me to thinking about the price of steel and how it could affect their business, so I researched more about that particular field because I knew nothing about steel. I came to learn that steel is an extremely volatile commodity that has huge price swings, which would obviously affect this company I was researching. And sure enough, as I learned more about steel pricing and tracked the downturns in steel I noticed that coincided with a downturn in the price of the company.
Filter number two: Does the company have a durable competitive advantage?
A durable competitive advantage refers to a moat, according to Harvard Business School professor Michael Porter.


The need for the business is so strong that Munger made it one of his Four Filters that he uses the help decide whether to invest in business.
Very interesting response. Moats are all the rage today, especially among value investors, especially among the Buffett and Munger disciples. For good reason, because we would all like to own companies with a competitive advantage or a moat. The problem is that it is easy to identify a company that is doing well. It is much harder to look into the future and determine if the company will continue to do well.
The durability of a moat is much harder to determine than to identify the moat itself. And the durability is what we are looking for because the price of the company will have the most current info figured into it. Most of the time.
Let’s talk a little bit about creators of moats. Examples would be Bill Gates, Ray Kroc, Sam Walton, Estee Lauder, and Jeff Bezos. These are all creators of great moats, some of which have stood the test of time so far. Moat creation requires superior management skill and a little luck.
Munger and Buffett are buyers of moats, not creators of them.

“We buy barriers, building them is tough…Our great brands aren’t anything that we’ve created. We’ve bought them. If you’re buying something at a huge discount to its replacement value and it’s hard to replace, then you have a big advantage. One competitor is enough to ruin a business running on small margins.”
Merely spotting a moat is one particular skill, but creating them is another whole set of different skills. The trick is to understand which set of skills it is that you own.
According to Munger, there are five primary components of a moat.

1. 
Supply Side Economies of Scale



2. 
Demand-Side Economies of Scale(Network Effects)



3. 
Brand



4. 
Regulation



5. 
Patents and Intellectual Property




Filter number three: Is there management in place with integrity and talent?

For Munger and Buffett, management is part of the moat that they create with their businesses. Because they only have 20 people on staff at the home office they must rely on their managers to maintain their investments.
They have two criteria for their managers.
    1. Capital Allocation – This is the primary management activity at Berkshire, the Capital allocation is job number one. One of the managers of Berkshire’s reinsurance company, Ajit Jain, who according to Buffett “has created tens of billions of dollars in value for this company with nothing but his brains and hard work.”
    2. Compensation Systems – At Berkshire, because most of the managers that work for them are already rich, they have devised other compensation systems to entice talent to their businesses. They select management that loves what they do so much that it outweighs the financial aspects of the job.

    They also understand that when the buy a business that they are buying a wonderful business, regardless of the state of management. They are looking for businesses that are so good that any “idiot” can run them because at some point they probably will.
    Filter number four: A business with an attractive price with a margin of safety.

    Anyone who wants to understand Munger needs to understand that when you invest, you are buying a piece of that business, not just a stock or a piece of paper but an actual piece of the business. You need to treat it like you are an owner of the business, which you are. Looking at it as a business owner gives you a different perspective on your purchase.
    Charlie is a firm believer in what Benjamin Graham teaches which is this.
    “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”
    Munger is a firm believer that he is an investor and has a lot of disdain for those that are speculators. He feels that theirs is a losing game. People that “day trade” stocks use charts and other voodoo-like techniques are just guessing at the direction of the market, and anyone who is guessing on the behavior of the market is doing just that. Guessing.



    The last factor of pricing a company is figuring out a valuation for that company.

    As Munger stated.
    “You must value the business to value the stock.”
    Neither Munger or Buffett look for an of the fancy valuations out there. EBITDA and non-GAAP earnings mean little to them, they like genuine free cash flow. Munger stated,

    Ø       an insatiable curiosity as to everything that is going on in the world.




    The difference between a good business and a bad business is that good business throw up one easy decision after another. The bad businesses throw up painful decisions time after time.”



    Wednesday, 7 February 2018

    THINKING ABOUT MANAGEMENT?




    "Never wrestle with a pig because if you do you'll both get dirty, but the pig will enjoy it" Charlie Munger

    “Study the company's management, the leaders, their track records, and their goals"  Roy Neuberger

    "Management is one of the most important factors in the evaluation of a leading company and it has a great effect upon the market price of secondary companies"  Benjamin Graham 1955

    "The first thing is, is the management decent and honest?” Julian Robertson

    "If management isn’t focused on maximizing long-term per-share value, then no matter how good your analysis is of the business, the decisions being made can disrupt the rising path of value you’d otherwise see in the static business" Bill Nygren

    "It's hard to overemphasize the importance of who is CEO of a company"  Warren Buffett

    "We do not wish to join with managers who lack admirable qualities, no matter how attractive the prospects of their business.  We've never succeeded in making a good deal with a bad person" Warren Buffett

    “I never want to pay above intrinsic value for stock – with very rare exceptions where someone like Warren Buffett is in charge.  There are people – very few – worth paying up a bit to get in with for a longer term advantage." Charlie Munger

    "Quality of, and incentives for, management are also very important. We look at management ownership to see whether their interests are aligned with the shareholders‘ interests and we look for their compensation levels to be reasonable." Leon Cooperman

    "One of the things I try to do, when I look at a corporate account is the first rule, it’s the map.  It’s not the territory but now I’m trying to see, does the map understate or overstate the territory?  Is this, am I getting clues from these accounts that suggest that this management team and their accountants are trying very hard to show less value than what is actually there or the other way around.  We would see that through, for example, their choices in depreciation policy.  Are they depreciating their assets quickly, which would imply that they’re trying to be conservative in what they show or are they trying to depreciate their assets very, very slowly.  In their acknowledgment of revenues, are they taking, are they acknowledging revenues at the very last moment when the client has paid cash or are they acknowledging their revenues when the client has just indicated the intention to buy?  What we’re looking for is divergence in which the divergence is in our favour." Guy Spier

    “Of course, we have made mistakes when assessing management teams. But, in our view, trying to spot a great manager remains a game very much worth playing” Marathon Asset Management

    “Good management gives you upside options for free.” Mohnish Pabrai

    “Choosing great management teams is a key ingredient to hitting a high batting average” Steve Major

    "In making both control purchases and stock purchases, we try to buy not only good businesses, but ones run by high-grade, talented and likeable managers" Warren Buffett

    "In my books, I’ve always placed the emphasis on the importance of the management team in selecting companies… and yet, I didn’t do it enough"  Philip A. Fisher

    “Our biggest mistakes have always involved overestimating management" Bruce Berkowitz

    "Most important is the character and brains of management.  Poor management can ruin even a good proposition.  The quality of management is particularly important in appraising the prospects of future growth.  Is the management inventive and resourceful with a determination to keep itself young in a business way? Or does it have a sit and die attitude?"  Bernard Baruch

    "The quality of management affects the bond coupon only rarely - chiefly when management is so inept or dishonest that payment of interest is suspended.  In contrast, the ability of management can dramatically affect the equity 'coupons'."  Warren Buffett

    “I really do believe in one premise - that management teams, in terms of their impact on value creation, is systemically underappreciated, both to the good and the bad.”  Andrew Halvorsen

    mortal damage... a business, unlike a franchise, can be killed by poor management." Warren Buffett

    “I like to talk to management, assess their abilities and personalities, and understand their way of thinking so that we are on the same page. I am always friendly, an
    d my intention is to look them in the eye and get a good sense of their character. This may seem an old fashioned way of judging people, but it’s very effective” Thomas Khan


    “One of the things I have learned over the years is how important management is in building or subtracting from value. We will try to see a senior person and prefer to visit a company at their office, almost like kicking the tires. You can have all the written information in the world, but I think it is important to figure out how senior people in a company think.” Lou Simpson

    “The best judgement we can make about management competence does not depend on what people say, but what the record shows” Warren Buffett

    "Managers that always promise to 'make the numbers' will at some point be tempted to make up the numbers"  Warren Buffett

    “Don’t trust quarterly earnings. Verify reports through the source and application statement. Figures can lie and liars can figure.” Irving Kahn








    Saturday, 3 February 2018

    STOCK PRICES


    “Price is a liar” John Burbank

    "A similar wisdom can be applied to market quotations. Once we understand that they can often be mirages, we can transcend them and come to see stocks simply as shares of businesses…which in the end is the one and only reality." Francois Rochon

    “Price is what you pay, value is what you get” Warren Buffett

    "Price means nothing other than the equilibrium of liquidity" John Burbank

    "The price of a stock at any one moment reflects the conventional wisdom of other investors" Ed Wachenheim

    "Prices fluctuate more than values - so therein lies opportunity" Joel Greenblatt

    "Price fluctuations don't affect business values, so if a price decline erodes my confidence it's usually a sign I've waded into murky waters with blind spots in my business understanding.  Although there have been times where a declining price caused me to re-assess and admit a mistake, in most cases I welcome lower prices as it allows me to buy more stock cheaper."  Allan Mecham

    "What is smart at one price is dumb at another." Warren Buffett

    "The price must have a rational basis"  Frank Martin

    "No business is attractive at any price" Shelby Davis

    "There's no investment idea that is so good that it can't be spoiled by too high an entry price" Howard Marks

    "The investment game always involves considering both quality and price, and the trick is to get more quality than you pay for in price. It's just that simple"  Charlie Munger

    "Price is the all-important consideration" Gerald Loeb

    Price determines return.” Ben Graham

    "An important observation to us is that price matters enormously.  The starting price has everything to do with your compound returns" Chuck Akre

    “Prices do not exist in a vacuum, but are tethered to something, even if by a huge bungee cord” Frank Martin

    “In our view, there is no such thing as a value company. Price is the essential determinant in every investment equation. At some price, every company is a buy; at some price, every company is a hold; and at a still higher price, every company is a sell. We do not recognize the concept of a value company” Seth Klarman.

    “By itself risk does not create incremental return; only price can accomplish that” Seth Klarman

    “Pursuing quality regardless of price is, in my opinion, one of the riskiest – rather than safest – of investment approaches” Howard Marks

    “There’s good assets and bad assets but good prices and bad prices supercede whether the assets are good or bad” David Abrams

    "Even the ugliest of assets purchased at the right price can make a great investment" Marathon Asset Management

    "Nearly every issue might conceivably be cheap in one price range and dear in another" Benjamin Graham

    “Investors who had no idea of the private worth of their holdings were susceptible to being scared out of them. Their only measure of value was the stock price, so the more the price dropped, the more they were inclined to sell. Davis was panic-proof”  The Davis Dynasty

    “The concept that investment risk is less a function of the individual company than the price of its stock is not recognized by many investors” Chris Browne

    “The single biggest determinant of investment returns is the purchase price” Josh Harris

    "Price - the only thing that should matter to any investor"  Christopher Parvese

    "It’s simple: the relationship between price and value is the only thing that guides our decisions" Warren Buffett

    "Day-to-day market prices can tell you as much, if not more, about market buyers and sellers than about underlying values. Over my career, it is clear that an understanding of psychology has been as important as a degree in accounting” Bruce Berkowitz

    "On any given day, market prices are driven almost 100% by sentiment.  As one's investment horizon lengthens, however sentiment matters less and returns are more dominated by cash flows" Andy Redleaf

    "Business fundamentals, not price quotations, convey useful information" Seth Klarman

    "The only true test of whether a stock is "cheap" or "high" is not its current price in relation to some former price, no matter how accustomed we may have become to that former price, but whether the company's fundamentals are significantly more or less favourable than the current financial-community appraisal of that stock" Phil Fisher

    "Investors must never mistake an investment that is down in price for one that is bargain priced; undervaluation is determined only by a security's price compared to its underlying value" Seth Klarman

    “The stock market is filled with individuals who know the price of everything, but the value of nothing.” Phil Fisher

    “The key to successful investing is to relate value to price today.” Walter Schloss

    "I don't need a stock price to tell me what I already know about value" Warren Buffett

    "Price fluctuations have only one significant meaning for the true investor.  They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal"  Benjamin Graham

    "Prices are continuously moulded by fears, hopes and unreliable estimates.  Capital is always at risk unless you buy better than average values"  Irving Kahn

    "The final determinant of investment success or failure is market price" Gerald Loeb

    "Price is perhaps the single most important criterion in sound investment decision making" Seth Klarman

    "I don't need a stock price to tell me what I already know about value" Warren Buffett

























    Wednesday, 31 January 2018

    THE VALUE OF CASH



    “Cash is the equivalent of financial Valium. It keeps you cool, calm and collected.” Bruce Berkowitz

    “I think it’s [cash] actually an aggressive strategic asset because it’s one of the few things that rises in value as the market plunges. Its value is inversely proportional to how challenging the environment is” Ken Shubin Stein

    “Holding cash is uncomfortable, but not as uncomfortable as doing something stupid” Warren Buffett

    "The hardest thing to do in investing is not the decision to buy or sell but to sit idle even if that means allowing the build-up of some cash" Christopher Begg

    "The big lesson I learned, which was a correct lesson to learn, in the financial crisis is to hold cash" Mohnish Pabrai

    "There will be some incident, it could be tomorrow. At that time, you need cash. Cash at that time is like oxygen. When you don't need it, you don't notice it. When you do need it, it's the only thing you need. We operate from a level of liquidity that no one else does." Warren Buffett


    “Buying hedges in a choppy market can be expensive, so we view cash as one of the cheapest hedges out there” David Nierenburg

    “Unfortunately the important criterion of investment merit is obscured or lost when substandard investments are acquired solely to remain fully invested” Seth Klarman

    “Fairholme views market crashes, panics, and downturns as opportunities to buy more of the companies we love at fire sale prices. The only way to exploit these opportunities is to have cash on hand.” Bruce Berkowitz

    “Naysayers argue that holding a large amount of cash that yields nearly nothing is foolish, and perhaps it is - until it isn't. On all counts, we think it's better to have cash and not need it, rather than to need it and not have it.” Bruce Berkowitz

    “There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn’t awash in cash – and I don’t want to go back.” Charlie Munger

    “Our willingness to hold cash at times when great opportunities are scarce allows us to take advantage of opportunity amidst turmoil that could handcuff a competitor who is always fully invested” Seth Klarman

    “I’d much rather apologize for holding cash than for paying too much” Gregg Powers

    “Cash is our hedge. That’s an anchor on returns when the market’s strong, but it’s a hedge when markets are bad and it allows you to put money to work at those times to generate attractive future returns” Andrew Jones

    “When bargains are lacking, we are comfortable holding cash” Seth Klarman

    "Because we are focussed on absolute returns, we will hold cash in the absence of values and a margin of safety. We view cash as an opportunity fund" Arnold Van Den Berg

    “It takes character to sit there with all that cash and do nothing. I didn’t get to where I am by going after mediocre opportunities.” Charlie Munger

    "You invest only in the opportunities you see. I have no problem sitting on cash." Marc Lasry

    "We view cash as a residual of a disciplined underwriting approach and as deferred purchasing power" Mathew McLennon

    "Cash is a wonderful thing.  If you have cash you can buy"  David Winters

    "There are times to sit on cash, because sometimes cash enables you to take advantage of investment opportunities" Sir John Templeton









    Sunday, 28 January 2018

    100 to 1 in the Stock Market by Thomas William Phelps




    1. “The moral, of course, is that those of us who ask little of life get little. Those who ask much get much. Those who ask too much gets nothing.”


    2.  “Fortunes are made by buying right and holding on.”

    3. ““Except to learn from experience, one should never waste time looking back”, Mr. Pettit replied. “In 1925 I personally owned 6500 shares of Computing-Tabulating-Recording (now IBM). At that time there were only 120000 shares outstanding. I sold mine for more than a million dollars-a lot of money in those days. Today they would be worth two billion dollars.”

    4. “To make money in stocks you must have “the vision to see them, the courage to buy them and the patience to hold them.” Patience is the rarest of the three.”

    5.  “There is another reason why professional investors, except those managing discretionary accounts, should de-emphasize market timing. That is because even if the market forecaster is right, he seldom can persuade others to act on his opinion. No one intends to buy stocks at the top of the market, or to sell them at the lows. On the contrary, bull market highs are made when the outlook for still higher prices is most broadly convincing. Conversely bear market lows are made when the likelihood of still lower prices seems overwhelming to the preponderance of reasonable, well-informed moneyed men. Since bull and bear markets are to a considerable extent manifestations of changes in mass psychology it is fatuous for anyone to believe that he can persuade a representative group of investors to sell stocks when that mass psychology is bullish, or to buy stocks when it is bearish. The wise professional, who understands this, concentrates on stock selection. Most investors are far less emotionally involved in deciding whether the market is going up or down. To clinch the argument, it is readily demonstrable that far more money can be made by good stock selection than by good stock market timing.”

    6. “In a bull market correcting mistakes often means taking profits. But when we do so let us not kid ourselves we are making money. The truth is we are acknowledging missing vastly bigger opportunities and incurring a capital gains tax liability to boot.”

    7. “Josh Billings once said of a man he admired with great restraint: “The trouble with him ain’t that he is ignorant, but that he knows so much that ain’t so.”

    8. “As the saying goes, “Patience is a virtue, have it if you can. Seldom found in women, never found in man.”

    9. “Again and again this survey of the big winners in the stock market emphasizes that it is more important to be right than to be quick.”

    10. “In hundreds of different securities we have seen demonstrated the wisdom of buying right and holding on. The conclusion seems inescapable that if one can buy right, no amount of trading or switching thereafter is likely to produce results equal to what he can have by simply holding on. By doing so he avoids paper work, brokerage commissions, and capital gains taxes. He loses the fun of trading, of matching his hunches about what the market will do tomorrow against the hunches of everyone else who is trading, the self-satisfaction of making a fast buck out of thin air.”

    11. “Incontestably, growth stocks are highly attractive if they continue to grow as fast as or faster than they have been growing and if buyers continue to expect them to continue to grow as fast or faster and if the rate at which future earnings and dividends must be discounted does not increase materially.”

    12. “The mere fact that a stock has been a growth stock for ten or fifteen years is no warranty that it will continue to grow even one more year.”

    13. “Unlike dogs, not every stock has its day. In Wall Street a stock that does not have its day is called a dog.”

    14. “Even when a stock does have its day, there is no assurance that the stock will be a leader forever.”

    15. “How do I reconcile that statement with my advice to buy right and hold on? That’s easy. As we have seen, hundreds of stocks have risen more than one hundredfold. A few have risen one hundredfold, and then have gone on to double or triple in price after that. But tomorrow is a new day for every company, every security. Eternal vigilance is the price not only of liberty but if solvency. My advice to buy right and hold on is intended to counter unproductive activity, not to recommend putting them away and forgetting them.”

    Ridiculous, you say. No practical man tries to look ahead that far. But 20 percent growth compounded annually will increase a company’s size by more than six times in the next ten years. The significance of this, in a book advocating “buy right and hold on,” is twofold:

    1.  In human relations, as in nature, there seems to be a law against limitless growth. Beyond a point, people simply won’t tolerate anymore, whether the growth is in business, church, or state.

    2. When you pay in advance for the earnings of a stock to triple or quadruple, as you do when you buy it at three or four times the price-earnings ratio of the Dow-Jones Industrial Average, you should foresee not only the growth you are paying for but further above average growth beyond that. This means that you must evaluate the competitive status of the company not as it is today but as it will be six to eight years from now, when it is three or four times bigger.”

    16. “No one buys a stock to do someone else a favor. No one sells a stock to let someone else in on a good thing. Most trades are result of head-on collisions between diametrically opposite opinions about the same security at the same instant in time.”

    No one knows or ever can know for sure what the future holds. If the Almighty had intended us to know that, he would have equipped us with another sense which none of us has. The Irishman highlighted the matter when he said, “Sure and I wish I knew where I was going to die. I’d never go near the place.” If we have no certainty as to when or where our own life will end, how can we presume to be sure of future developments with regard to matters not nearly so close to us?

    At a bridge I have been told that if I am not set occasionally I am underbidding – not risking enough to make the best possible score.


    17. “This is not to say that risk must always be commensurate with the profit. The art of speculation in one sense is the ability to recognize when a seeming risk is not a real risk or when a real risk is not nearly as great as the stock market anticipates. Even so an investor would have to be starry-eyed indeed to think that he could turn $10000 into a million dollars without taking any chances of losing his money.”

    “One of the most persistent illusions of the business of investing is that information is all you need to make money. Organizations that sell information foster that illusion. It is good for their business.

    If one just stops to think about the two parties to every trade, the fallacy in this notion that information is tantamount to money-making investment decisions become painfully apparent. For every buyer there must be a seller. For every seller there must be a buyer. Sometimes an informed buyer has the good luck to meet an uninformed seller and vice versa. But it is a good guess that most of the time – practically all of the time where institutions are on both sides of the trade – both buyer and seller are informed. If information is everything, how can two informed professionals come to opposite conclusions about the same security at the same price at the same instant in time?”

    18. “A second reason why one informed investor may sell what another informed investor is buying is that no one can be informed about the future. Since all the decisions as to the future must be based on assumptions, informed investors may make different assumptions and hence come to opposite conclusions about buying or selling a particular stock at a particular moment.”

    19. “A third reason for difference of opinion among informed investors is that no one ever is or can be fully informed. The investor who is 98 percent informed may come to the opposite conclusion from that reached by one who is 99 percent informed.”

    20. “Even if one’s information is complete and accurate, it can still misleading investment wise if it is late. A lemon that has been flattened by a steam roller has more juice in it that a piece of information the stock market has already discounted. To use another analogy, the difference between soda water that has just been uncapped, and soda water that has been left all night. Just as uncapped soda water soon loses its fizz, so uncorked news fades into history or oblivion.”




    Act like business owners

    “We don’t think of ourselves as buying and selling pieces of paper but rather  investing in businesses ” Frank Martin “Stock c...