• 13 Jun
    Margin Of Safety – Seth Klarman’s 10 Rules For Investing Success

    Margin Of Safety – Seth Klarman’s 10 Rules For Investing Success

    • After summarizing Seth Klarman’s book, I thought added value could be created by listing his most important investing rules.
    • Some rules are easy to understand and apply, while some go against what the majority thinks. Think averaging down.
    • Klarman achieved returns of over 20% for more than 35 years. Therefore, it’s extremely important to learn and listen when he says something as he doesn’t speak much.

    Introduction

    We have completed the chapter by chapter summary of Seth Klarman’s book, Margin of Safety. Click here to view all of these articles on the Investiv Daily website.

    As I find Klarman’s investment style so powerful and yet so simple, I thought it would be a good idea to conclude the summary of his book with 10 of his investment rules. You may want to bookmark today’s article to compare future investment ideas and opportunities against Klarman’s view on investing. More →

  • 12 Jun
    Stocks, Bonds, & Gold, Oh My! What’s The Safest Asset Class Today?

    Stocks, Bonds, & Gold, Oh My! What’s The Safest Asset Class Today?

    • In his search for safety, the average investor usually does it all wrong.
    • Stocks, bonds, real estate, gold, and cash will all probably drop more than 70% once in your lifetime.
    • However, there is an asset class that is much safer and will lead to huge returns, Buffett would call it a “bet on America.”

    Introduction

    When I talk to people that aren’t as obsessed about investments as I am, a word that I constantly hear is “safety.” Everybody wants to do something with their capital without risk and they are in a constant inner fight related to their money and what to do with it. More →

  • 11 Jun
    Sunday Edition: Don’t Buy China’s Google Just Yet

    Sunday Edition: Don’t Buy China’s Google Just Yet

    It never fails to make me laugh a bit to myself when I see excitement over a bunch of zeros. Remember Dow 20,000 earlier this year? Or Amazon hitting $1,000 a share last week?

    This week it was Google’s parent company, Alphabet (NASDAQ: GOOGL), soaring to trade at $1,006 by late Monday morning which helped push the market cap of the world’s second largest company to $688 billion.

    What’s remarkable in my mind is that the demand is still there, even despite all those zeros of the four-digit stock price, as such a high price on an individual stock should make the company look unaffordable to smaller investors.

    As that $1,000 price tag is too steep for me, I decided to take a look at China’s answer to Google, Baidu (NASDAQ: BIDU). More →

  • 09 Jun
    Want To Know About The Current State Of The Market? Read This.

    Want To Know About The Current State Of The Market? Read This.

    • A quick look at the economy points out a few risks, but there are also some positives.
    • Unfortunately, savers have gotten the short end in this environment, but average investors haven’t done much better either.
    • It’s important to understand what’s going on and how will it affect your long-term returns. If you only think about the short term, your returns will be below average, thus below 2.3% per year.

    Introduction

    J.P.Morgan (NYSE: JPM) recently released its Q2 2017 Guide To The Markets. As this report is very long, with a total of 71 slides and a lot of correlation charts, I’ll take out the most important things an investor should know about the current state of the markets and the economy. More →

  • 08 Jun
    How To Invest For Your Children Or Grandchildren

    How To Invest For Your Children Or Grandchildren

    • Whether investing for children or retirement, the goal is to maximize portfolio value at a specific future date, not now or in the next six months.
    • Be wary of fees as they eat up a huge part of your future wealth. I’ll show how to avoid them.
    • Temporal diversification and buying companies that create value will do wonders over time.

    Introduction

    Our greatest treasure is, of course, our kids. I’m a proud father for six months now and I must say that every day since my child was born has been the most beautiful day of my life.

    In that spirit, I want to provide the best possible environment for my kid to grow up, but also to enable him to do everything he wants when he is older. This has me, and probably many other parents or grandparents, already thinking about college tuition money, start-up capital for a business venture, helping with the down payment for a house, or simply paying for a wedding or a honey-moon. The notion that you can build a substantial nest-egg with small monthly payments is very attractive to me and will also provide a great educational experience to my kid as it will show him how small actions over a long period of time can bring huge results. More →

  • 07 Jun
    Do You Have a Deterministic Or Probabilistic Approach To Investing?

    Do You Have a Deterministic Or Probabilistic Approach To Investing?

    Introduction

    The human mind is wired in a deterministic way. A proposition is either necessarily true or it is false.

    For example, you either like a person or you don’t. There isn’t an in-between where you would say that there is a 67% probability you like someone. The same principle applies to investing, we either think the market or a stock are going to go up or down. What very few can do is to think in a probabilistic way. But mastering a probabilistic way of thinking would do wonders for your portfolio.

    Today I’ll quickly analyze Apple (Nasdaq: AAPL) as both a strong bullish and a strong bearish case can be made to explain the probabilistic and deterministic approach to investing. More →

  • 06 Jun
    The Truth No One Tells You: Low Risk = High Reward, High Risk = Low Reward

    The Truth No One Tells You: Low Risk = High Reward, High Risk = Low Reward

    • When you give fundamentals time, you really can reach high returns with low risk.
    • Look for earnings stability and earnings yield to calculate your future returns. The lower the price, the higher the earnings yield and the lower the risk.
    • If you’re happy with a 4% return in the next 30 years, the S&P 500 has almost no risk at all. If you want more, keep reading.

    Introduction

    Yesterday we discussed a bit how defensive investors should position themselves in today’s market. As promised, today I’ll debunk the idea that only high risk can lead to high returns. More →

  • 05 Jun
    Why You Should Be Careful When You’re Told To Have A Defensive Portfolio

    Why You Should Be Careful When You’re Told To Have A Defensive Portfolio

    • Defensive investments are usually promoted to those in retirement or close to it. However, we should all always be defensive investors.
    • Neither bonds nor general stocks are defensive investments, no matter the diversification or quality of the bonds.
    • Cash is the only defensive investment in this market. Other options are positive asymmetric risk reward investments.

    Introduction

    Many will say that a portfolio owned by an investor who is about to retire or is retired should be a defensive one. However, I find focusing on age isn’t smart because no matter our age, we have to always protect our portfolio and try to maximize returns. After all, isn’t the first rule of investing to never lose money while the second rule of investing tells us to read rule number one again? More →

  • 04 Jun
    Sunday Edition: Why Now Is The Wrong Time To Get In On This Chinese Growth Story

    Sunday Edition: Why Now Is The Wrong Time To Get In On This Chinese Growth Story

    Over the last few weeks we’ve discussed several technical patterns that can tell you when a stock may be beginning a new uptrend, so today I wanted to talk about a pattern that can help you spot the beginning of a new downtrend.

    The stock we’re looking at today is Momo, Inc. (NYSE: MOMO). More →

  • 02 Jun
    Should You Follow What Hedge Fund Managers Are Doing?

    Should You Follow What Hedge Fund Managers Are Doing?

    • I’ll describe in detail how you can follow hedge fund managers.
    • It’s very important to understand the risk reward profile of the fund manager.
    • Following allows us to find great investment ideas, but there are also big traps.

    Introduction

    Every fund has to disclose its portfolio to the SEC quarterly in a 13F form which allows us to track hedge fund managers’ portfolios. It’s easy to track what George Soros, David Tepper, Seth Klarman, Dan Loeb, Carl Icahn, David Einhorn, Bill Ackman, Warren Buffett, and many, many other interesting investment stars have been doing. The data is usually disclosed 45 days after the end of the quarter, but nevertheless shows what these guys have been doing.

    When you see the research power all those funds use, you might think it’s an excellent free lunch. Well, it could be, but there are a few things to be careful of. More →

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