What is Value Investing?

Free Cash Flow, Get started, Process, Risk

What is value investing? It is to buy a business for less than what it’s worth. We can break this into three parts. Buy a business Buying a stock is the same as owning a fraction of the underlying business. If you buy a share of Apple (AAPL), you own the business that produces things […]

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Why Investors Blow Up (and How To Avoid That)

Decision Making, Margin of Safety, Psychology, Risk, Second Order Effect

Overshoot Howard Marks of Oaktree Capital described the market as a pendulum that rarely stays in the middle “The mood swings of the securities markets resemble the movement of a pendulum. Although the midpoint of its arc best describes the location of the pendulum “on average,” it actually spends very little of its time there. […]

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How to Think About Price

Market, Price, Psychology, Risk

Tesla at $1,000 per share. Topglove, one of the largest glove manufacturers, is trading at MYR$17 per share, up 360% so far this year due to COVID19. Afterpay, Australia’s leading buy now pay later, has a $15 billion market capitalization after a 560% rally since March. What do they tell you? Will they keep going […]

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Hunting Ground

Circle of Competence, Environment, Opportunity Cost, Risk, Strategy

Hunting Groundhʌntɪŋ ɡraʊnd/nouna place likely to be a fruitful source of something desired or sought. Imagine if you’re going on a fishing trip, what do you need? You need a location, fishing rods, reels, lures, etc. That’s the plan. But a plan doesn’t equal success. You might catch some fish if you’re lucky, but you’re […]

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8 Books on Worldly Wisdom


Books, Environment, History, Mental Models

How do we attain wisdom? It starts with knowledge. What kind of knowledge should we acquire? Peter Kaufman’s three buckets of knowledge can guide us. “Every statistician knows that a large, relevant sample size is their best friend. What are the three largest, most relevant sample sizes for identifying universal principles? Bucket number one is […]

What is Value Investing?


Free Cash Flow, Get started, Process, Risk

What is value investing? It is to buy a business for less than what it’s worth. We can break this into three parts. Buy a business Buying a stock is the same as owning a fraction of the underlying business. If you buy a share of Apple (AAPL), you own the business that produces things […]

How to Think About Price


Market, Price, Psychology, Risk

Tesla at $1,000 per share. Topglove, one of the largest glove manufacturers, is trading at MYR$17 per share, up 360% so far this year due to COVID19. Afterpay, Australia’s leading buy now pay later, has a $15 billion market capitalization after a 560% rally since March. What do they tell you? Will they keep going […]

Charlie Munger On The Problem of Economics, How He Thinks, and What Should Investors Do


Incentive, Mental Models, Psychology, Second Order Effect

Charlie Munger’s speech “Academic Economics: Strengths and Faults After Considering Interdisciplinary Needs” at Herb Kay Undergraduate Lecture in 2003 gives me insights into how he thinks and what investors should learn.  Fatal unconnectedness, leading to ‘man with a hammer syndrome,’ often causing overweighting what can be counted Munger’s first objection to economics is that it […]

Supply – How to find quality businesses


Compounder, Moat, Scale Economies, Value Creation

What differentiates a good business that earns a long-term above-average return from a mediocre business that, at best, only earns a return close to its cost of capital? A good business can control its supply while a mediocre business can’t.  Take Ferrari. Ferrari has a 24% operating margin with above-average return on capital, higher than […]