Warren Buffett

  • 14 Sep
    Diversify Like The Big Boys Do

    Diversify Like The Big Boys Do

    • Temporal diversification diversifies your portfolio through time by buying only the assets that are cheap at the moment and avoiding the ones in a bubble.
    • By buying in cycle troughs you enjoy high-dividend yields that allow you to buy other assets that are in temporal distress.
    • This high yield lowers the need to sell and lowers your tax bill.

    Introduction

    Today we’ll introduce you to a new concept—“temporal diversification,” a term that has begun to gain traction, especially in academic circles—that isn’t yet common knowledge but is already being used by the best investors. Using the example of Berkshire Hathaway, we’ll provide an overview of the concept of temporal diversification and will provide some ideas for increasing your returns by diversifying your portfolio not just for the current moment, but for your whole investing life. More →

  • 11 Sep
    Sunday Edition: Identifying Undervalued Stocks

    Sunday Edition: Identifying Undervalued Stocks

    The $64 million dollar question asked by every investor is, “when is the right time to make an investment and actually buy shares in the said company?”

    One of the big advantages of value investing is the fact that the question of when you should invest, while never being irrelevant, is only a secondary concern. 

    The focus is on first determining whether a stock is available at a discount compared to how much the business is worth; if a discount exists, the value investor has an immediate advantage over the rest of the market (which has yet to recognize the stock should be priced higher than it is) and should take a position as quickly as possible. More →

  • 08 Sep
    Getting Bored? You’ll Want To Read This

    Getting Bored? You’ll Want To Read This

    • Wall Street doesn’t make money if things aren’t moving, so beware of interesting new investment vehicles marketed with the guise of offering you better returns.
    • In this article, we’ll share an old investing gem that is essential to know for every investor.
    • The time to spice up your portfolio is when it looks like the world will end tomorrow.

    Introduction

    It has been a boring summer. The S&P 500 reached new highs, but has traded in a 2% trading range for the last two months.

    The situation isn’t better in the longer term. In the last two years, the S&P 500 is up 4.3% per year which is not spectacular for stocks, but it’s also not bad. More →

  • 06 Jul
    How Diversified Should You Be?

    How Diversified Should You Be?

    • Extreme diversification is good but only provides ordinary results results.
    • Concentrated portfolios proved better in some cases as they allow investors to select the best companies.

    Introduction

    A few days ago we discussed passive and active strategies given that there is a looming risk of a recession and that the markets are unable to break new highs which makes just holding stocks for the sake of holding stocks very risky. In this article we are going to discuss how diversified a portfolio should be as it is easier to pursue an active strategy with a concentrated portfolio of stocks. More →

  • 27 Apr
    The Buyback Conundrum

    The Buyback Conundrum

    • Buybacks should increase shareholder value, but that’s not always the case.
    • From a book value perspective most companies are destroying value.
    • From a return on investment perspective the logic behind buybacks is open for discussion.

    Introduction

    The goal of investing is to enjoy stock price appreciation and dividends, but there is another method for achieving interesting returns: buybacks. With stock buybacks, a company buys its own stocks on the open market. As a public company cannot fully own itself, the purchased stocks lower the number of outstanding stocks and increase the relative ownership of the remaining stockholders. In other words, the company is using its cash to invest in itself. More →

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