Intermediate
Fusion Musings for Intermediate Investors
- Fusing Business Momentum and Value
- Fusion Philosophy on investing, money, wealth and happiness.
- It is better to be roughly right than exactly wrong
- Market Cap vs Enterprise Value vs Share Price vs Value
- Beating the Market – Valuation Tips
- Calculating Portfolio Returns using CAGR, XIRR and TWR
- Buying in Thirds by Dean Morel
Concentration versus Diversification
Focus Investor.com provides three excellent articles to helping investors understand the benefits of portfolio concentration, “value” investing, and using a multidisciplinary approach towards decision making. I recommend these articles to all investors.
- Focus Investing Series Part 1: Introduction
- Focus Investing Series Part 2: Selecting business, determining price and psychology
- Focus Investing Series Part 3: The Munger Network of Mental Models
Great External Resources
30 Days to Becoming a Better Investor is a great series on how to improve your investing. Lots of great information and resources are provided and there is no point in me repeating here. So head on over to Fat Pitch Financials.
So You Want To Be The Next Warren Buffett? How’s Your Writing? By Mark Sellers
This speech that Sellers gave to a Harvard MBA class is a must read for all investors. It resonated strongly with me as I have always believed it is ones psychological make-up that is the largest factor in your investing success. Read this to realise that 20% annual compounded gains is a delusional aspiration for most people. Investing is not a get rich quick scheme it is a life passion and even then you’ll be doing well to beat the indexes by a few percentage points.
I always found Sellers discussion on psychology the most interesting part, though he also provides interesting insights into economic moats and prompts the reader to consider their own investing moat.
I believe his speech would have been more useful if he provided some tools to improve the traits which he mentioned, but he seems to be of the opinion that they are hardwired and can’t be overcome.
Sellers seven traits:
- Ability to buy fear sell greed.
- Obsessive about investing.
- Willingness to learn from past mistakes.
- Inherent sense of risk based on common sense.
- Confidence in convictions.
- Both sides of your brain working.
- Remain true and thoughtful in a volatile environment.
My best psychology professor devoted a lecture to ways to improve the connection between your brain’s hemispheres.My favourite has always been juggling. It is one of the few activities that simultaneously engages both hemispheres and strengthens the link between the two. I recommend adding juggling to your daily routine. For parents out there, kids love it and it’s fun for all the family.
A quick primer on the brains hemispheres.
Free Online Resources
- The Motley Fool How to Value Stocks is a great introduction into valuation, security analysis and various key ratios. There is also a good guide on how to read a balance sheet.
- Philip Fisher’s 15 Points for Evaluating a Company.
Reading List
Peter Lynch is a must at this point. |
