EP30 (Part2) Peter Lynch Investing Golden Rules



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Beating the Street by Peter Lynch: https://amzn.to/2yklmzj

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We continue to talk about the investing rules by Peter Lynch and this episode covers the following 8 rules.

  1. Never invest in a company without understanding its finances. The biggest losses in stocks come from companies with poor balance sheets. Always look at the balance sheet to see if a company is solvent before you risk your money on it.
  2. Avoid hot stocks in hot industries. Great companies in cold, no growth industries are consistent big winners.
  3. With small companies, your better off to wait until they turn a profit before you invest.
  4. If you’re thinking about investing in a troubled industry, buy the companies with staying power. Also, wait for the industry to show signs of revival. Buggy whips and radio tubes were troubled industries that never came back.
  5. If you invest $1,000 in a stock, all you can lose is $1,000, but you stand to gain $10,000 or even $50,000 over time if you’re patient. The average person can concentrate on a few good companies, while the fund manager is forced to diversify. By owning too many stocks, you lose this advantage of concentration. It only takes a handful of big winners to make a lifetime of investing worthwhile.
  6. In every industry and every region of the country, the observant amateur can find great growth companies long before the professionals have discovered them.
  7. A stock-market decline is as routine as a January blizzard in Colorado. If you’re prepared, it can’t hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic.
  8. Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and stock mutual funds altogether.

EP29 (Part1) Peter Lynch Investing Golden Rules



Support this podcast through your donation: https://paypal.me/valueinvesting

Beating the Street by Peter Lynch: https://amzn.to/2yklmzj

Subscribe to the podcast: http://valueinvesting.blubrry.net/subscribe-to-podcast/

This episode covers the first 9 investing rules by Peter Lynch

  1. Investing is fun, exciting, and dangerous if you don’t do any work.
  2. Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.
  3. Over the past three decades, the stock market has come to be dominated by a herd of professional investors. Contrary to popular belief, this makes it easier for the amateur investor. You can beat the market by ignoring the herd.
  4. Behind every stock is a company, find out what it’s doing.
  5. Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies.
  6. You have to know what you own, and why you own it. “This baby is a cinch to go up!” doesn’t count.
  7. Long shots almost always miss the mark.
  8. Owning stocks is like having children – don’t get involved with more than you can handle. The part-time stock picker probably has time to follow 8-12 companies, and to buy and sell shares as conditions warrant. There don’t have to be more than 5 companies in the portfolio at any time.
  9. If you can’t find any companies that you think are attractive, put your money into the bank until you discover some.

EP28 Buffett’s Views on Global Diversification, Macro Economy, Buying The Entire Business



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This episode covers Buffett’s views on

  • Global diversification strategy
  • Macro economy outlook consideration
  • Pros and cons of buying the entire business against buying a portion of business in the stock market

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Reference on today’s show: 1994 Berkshire Hathaway Annual Meeting: https://www.youtube.com/watch?v=fjXZbW8ALRA


EP27 Buffett’s Views on Good Management, External Influence, Saloman Brothers Question by Bill Ackman



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This episode covers Buffett’s views on

  • How to identify good management teams for your investments
  • How to deal with the investment analysis by others
  • Buffett’s investment in Saloman Brothers (asked by Bill Ackman)

Podcast Website: http://valueinvesting.blubrry.net/subscribe-to-podcast/

1994 Berkshire Hathaway Annual Meeting: https://www.youtube.com/watch?v=fjXZbW8ALRA


EP26 Buffett’s Views on Derivatives, Intrinsic Value (cash flow, discount rate), Insurance Business



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This episode covers Buffett’s views on

  • Use of derivatives
  • Intrinsic value calculation in terms of cash flow and discount rate
  • Intrinsic value calculation for insurance business

Podcast Website: http://valueinvesting.blubrry.net/

1994 Berkshire Hathaway Annual Meeting: https://www.youtube.com/watch?v=fjXZbW8ALRA

 


EP25 Four Tips To Identify Good Spin-offs (Case Study-Strattec Security) by Joel Greenblatt



Donation link for this show: https://paypal.me/valueinvesting

Joel Greenblatt’s book (You Can Be a Stock Market GENIUS): https://amzn.to/2vjCwfX

In the book, Joel Greenblatt provided the following four tips via a spinoff case study (Strattec Security) on how to identify good spinoff opportunities.

  1. Check if the spin-off is small in size for institutional investors
  2. Check insider ownership
  3. Check pro forma statements and derive an intrinsic value conservatively
  4. Look for hidden information that could dramatically change the intrinsic value

 


EP24 How To Identify Good Spin-offs by Joel Greenblatt (Case Study on Marriott)



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A legendary value investor, Joel Greenblatt, explains why value investors should pay special attention to spin-off stocks.  This episode shows you how Joel Greenblatt identified a very attractive investment opportunity from Marriott’s spin-off that happened in the past.  The spin-offs that involve the following points would give you a better chance for your investment success.

  1. Institutions don’t want it and their reasons don’t involve the investment merits
  2. Insider wants it
  3. A previously hidden investment opportunity is created or revealed

More details could be found from this book (You Can Be a Stock Market GENIUS).

Click here (Value Investing Podcast) to visit this podcast website


EP23 Why Spin-offs are Good For Value Investors by Joel Greenblatt



Support this podcast through your donation: https://paypal.me/valueinvesting

A legendary value investor, Joel Greenblatt, explains why value investors should pay special attention to spin-off stocks.  This episode covers the four points that make the spin-offs very attractive investments for individual value investors.

  • The shares of the new spin-off stock are distributed to the existing shareholders of the parent company who usually don’t want the shares.
  • The spin-off companies are usually small in size, and are not worth for institutional investors.
  • The spin-off event unleashes entrepreneurial forces and creates a better incentive and reward system
  • The very act of the spin-off decision by the executive team is a good indication that the executive team is shareholder-oriented

The future episodes will cover the details of what factors you need to look at to identify great spin-off stocks.

More details could be found from this book (You Can Be a Stock Market GENIUS).

Click here (Value Investing Podcast) to visit this podcast website


EP22 Investment Basics (Part 2) by Joel Greenblatt



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Joel Greenblatt is a legendary value investor who founded a hedge fund Gotham Capital with an astonishing track record of 40% annualized return from 1985 to 2006.  This episode covers the second part of the investment basics that Joel discussed in his book (You Can Be a Stock Market GENIUS).

  • Don’t buy more stocks; Put money in the bank
  • Look down, not up
  • There’s more than one road to investment heaven

The future episodes will cover the details of great special investment opportunities such as spin-offs, merger securities, restructurings, rights offerings, etc.


EP21 Investment Basics (Part 1) by Joel Greenblatt



Support this podcast through your donation: https://paypal.me/valueinvesting

Joel Greenblatt is a legendary value investor who founded a hedge fund Gotham Capital with an astonishing track record of 40% annualized return from 1985 to 2006.  This episode covers the first three investment basics that Joel discussed in his book (You Can Be a Stock Market GENIUS).

  • Do your homework
  • Don’t listen to others
  • Pick your own spots

The future episodes will cover the rest of the investment basics, and discuss the details of great special investment opportunities such as spin-offs, merger securities, restructurings, rights offerings, etc.