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Quest for Wealth - Value Investor Education

Jan 12, 20226 min read

Investing is all about getting more value than you pay for.

“You’re looking for a mispriced gamble. That’s what investing is. And you have to know, enough to know, whether the gamble is mispriced. That’s value investing.”
— Charlie Munger

Below notes are taken while watching youtube videos.

Points to remember

Trying to solve the investment puzzle, Chuck Akre

How to beat market with compounding, the 3 legged stool -

  1. Quality of business - When Profit Margin is high, check the quality of business and invest in that business. Eg: MasterCard profit margin is 40% . Even if you divide that 3 times 40/2=20 /2= 10 . That 10% on a average good margin. Only quality business can deliver consistent margins.

  2. Quality of people who run the business - People who run the business . They should treat even the unseen share holder as the partner in business

  3. Reinvestment in business today gives greater profit margin is compounding

Thatcher Martin, Spree Capital

Have 20 businesses in your portfolio but do research on lots of companies. Have high-bar to get on your portfolio

Key things

  1. Repeatability in the business model. Proven process. Geographic expansion is easy.
  2. Predictability - Predicable path for value creation. Simple business
  3. Growing on Markets - Company has to create market or grow market. Size of end market has to be growing. (Eg:- MasterCard, Moodys)
  4. Self-funding business(profits are reinvested)
  5. Competitive Advantage has to be growing
Dennis Hong

We want to spend high-quality time studying high-quality people, building high-quality businesses on behalf of high-quality investors.

Dan Pena

What get measured, gets accomplished. Without measurements you are just fooling yourself.

Steve Schwarzman

To makes something work, it takes super human effort, people don’t become successful as per time workers.

Vijay Kedia — SMILE Theory
  • SMILE refers to Small in size, Medium in experience, Large in aspiration and Extra-large in market potential.
Bill Gates — Optimism and pessimism coexisting

From the day he started Microsoft he insisted on always having enough cash in the bank to keep the company alive for 12 months with no revenue coming in. In 1995 he was asked by Charlie Rose why he kept so much cash on hand. Things change so fast in technology that next year’s business wasn’t guaranteed, he said, “Including Microsoft’s.” In 2007 he reflected: I was always worried because people who worked for me were older than me and had kids, and I always thought, ‘What if we don’t get paid, will I be able to meet the payroll?‘” Optimism and pessimism can coexist. If you look hard enough you’ll see them next to each other in virtually every successful company and successful career. They seem like opposites, but they work together to keep everything in balance. What Gates seems to get is that you can only be an optimist in the long run if you’re pessimistic enough to survive the short run. The best way for most people to apply that is: Save like a pessimist, invest like an optimist.

Said by Kevin O’Leary
  • Don’t lie, it destroys your equity
  • Write down three things todo next day a night before in a sticky note and get it done next day.
  • Don’t give your kids entitlement, it’s like cursing them
  • Beanstalk app - There are reasons why Financial Companies won’t bother people who can save only $400 a Month this app is for them.
    • Save $100 dollars a week invest in etfs which will be used for your retirement.
  • An Entrepreneur should be able to
    • Articulate your idea in 90secs or less
    • Have to explain why you are the right person to execute that idea
    • Know numbers gross margin, marker share, breakeven analysis, how many competitors and how fast you can grow
Said by David Ramsay
  • When you are highly emotional your critical thinking shuts out.
Said by Robert Kiyosaki
  • Knowledge is finite, stupidty is infinite, so stay stupid. Keep learning…
  • Be careful who your teachers are
  • Don’t hide behind diploma
  • Before investing ask people for their financials
  • More debt you have less tax you pay
Said by Tilman Fertitta in a interview with Lewis Howes

  • In any business deals you can’t get caught up emotionally and remember as there’s always another deal. So good business men walk away from deals all the time.

  • At certain times, things can be overpriced at that time you got to know, what’s in the box and what’s out of the box. Is it something you going regret later or is it something if you wait or you can get it somewhere else as well.

Said by Jack boogle
  • Idea of buying and holding forever is that you have gotten it right first place. You can hold tight if you only bought right.
Said by Li Lu
  • Common sense is the least common commodity
  • Successful imvesting lies in the successful guessing on stock movement based on whatever theories and practices that works for you.
Unknown
  • Diversify when you think your choices can go wrong
Nassim Taleb

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