With a nod to my lectures this week on Efficient Market Hypothesis (EMH) and CAPM, I quote Charlie Munger.

“Beta and modern portfolio theory and the like – none of it makes any sense to me. We’re trying to buy businesses with sustainable competitive advantages at a low, or even a fair, price.”

“How can professors spread this [nonsense that a stock's volatility is a measure of risk]? I’ve been waiting for this craziness to end for decades. It’s been dented, but it’s still out there.”

See below for a book review with more wisdom from Charlie Munger.

I’ll be biting my tongue and regurgitating as required.

I plan to get Poor Charlie’s Almanack out of the Melbourne Business School library this week as an anecdote to my lectures. In case I need more antivenin I’ve also ordered Value Investing: Tools and Techniques for Intelligent Investment from Amazon.

My course is going well, thank you those who have inquired. While I feel like a heathen at a baptismal font, I am immensely enjoying the mental stimulation and challenge. My first assignment is due on Tuesday, so I’ll soon find out how I’m doing. I’ve also signed up to do CFA Level one this December, ‘cos doing a Masters on top of full time investing and being a house dad just isn’t enough! The large box with the CFA course material arrived within days of ordering, frighteningly efficient. Now the books sit taunting me from the bookshelf.

P.S. We just got back from a fabulous holiday in Brisbane. If it wasn’t for all the bugs and Queenslanders it would be a wonderful place to live! The beach and pools at Southbank are great, as was lunch at Sunshine Beach Surf Club and diving off the pier into the Noosa river. Throw in Stradbroke Island and we didn’t even bother heading south to the Gold Coast and theme parks.

Book Report: Poor Charlie’s Almanack 3rd Edition

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1. Trees for the Forest