Bill Ackman’s checklist is straightforward and reflects the basic principles of Rule #1 investing. But sometimes a company’s story has changed, so you must research further to determine if you need to hedge, or even exit a position.
This week, we head back to the vault to hear part 2 of last week’s analysis of Bill Ackman’s investing checklist. This week, Phil and Danielle go into greater depth on the topic and discuss why it’s important to keep things simple with your investing.
To gain a better understanding of the moats your investments ought to have, click here for The 5 Moats Investment Guide: https://bit.ly/3Kmb33J

Topics Discussed:

Irish companies

The snowboarding of money

Power structures of corporate governance

The value of patience and humility in investing


Resources Discussed:

Origin Enterprises

I-RES

Permanent TSB 

AIB

Bank of Ireland

Kingspan

Ryanair

Smurfit Kappa

CRH

Glanbia

Kerry Group


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429- FROM THE VAULT: Bill Ackman’s Investing Checklist Part 2

Phil Town is a hedge fund manager and author of 3 New York Times best-selling investment books, Invested, Rule #1, and Payback Time. On the InvestED podcast, Phil and his daughter Danielle shine a light on the successful investing strategies that gurus like Warren Buffett have used for 80 years. Listen in for a great stock market education on basics, learn how to invest on your own, and follow along with real-time examples and investing tips from week to week. Subscribe and leave a review. Questions? Email questions@investedpodcast.com.

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The digital age, with all of its monopolies and consolidation across various markets, has also seen a rise in innovation and small companies seeing success by having unprecedented access to consumers through new channels of commerce and communication.

With market stability and consumer confidence taking hits in recent years, small luxuries like makeup continue to do well despite the struggles of luxury brands in general.  With the success of some niche brands in this highly competitive and specialized sector of cosmetics, what does the weather look like for some of the more established players in the makeup industry?

This week, Phil and Danielle wrap up their discussion about the beauty industry and the way that boutique brands might affect the bottom line for the big names in cosmetic products.

If you want a huge clue as to whether or not you’re looking into a business that will deliver predictably strong returns, don’t miss out on your free copy of The Big 5 Numbers Guide:  https://bit.ly/3psMESQ

Topics Discussed:

ETFs

Augustinus Bader

Victoria Beckham Beauty

Ulta

Sephora

Kering

LVMH

D2C vs retail

Cosmetic science


Resources Discussed:
Lisa Eldridge

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466- Ulta's Makeup Weather Part 2

How important is investing to the economy at large? While companies don’t see a direct increase on their bottom line from the secondary market, it can be very important in helping to determine the value of a business and the drive interest in the primary market.

For value investors, having a strong understanding of a business’s weather, i.e. their moat, competitive advantage, and other factors that determine their long-term success, is paramount to generating returns on a multi-year timeline. From the Rule #1 perspective, that’s the key difference between investing and simply gambling on the market.

After a few weeks’ break on the subject, Phil and Danielle return with part 1 of an extra long 2-part episode breaking down the weather of the makeup industry giant Ulta, and share some of their insights into their own weather analysis of their history with this business. 

For help identifying the durable advantage of a company you’re looking to invest in, click here for your free copy of The 5 Moats Investment Guide: https://bit.ly/3Kmb33J

Topics Discussed:

Primary market vs Secondary market

CFO CEOs

Ulta

Augustinus Bader

Victoria Beckham Beauty


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465- Ulta's Makeup Weather Part 1

A crystal ball would be the ultimate tool for any investor, but given that we’re not living in a fantasy world, how do top investors prepare for an uncertain future?

With the inevitability of market downturns, finding a balance between generating returns and being ready to strike when the iron is hot can be a tricky position to navigate.  Discovering that equilibrium, along with the patience to hold on through the ups and downs once you’ve bought into a great company, can be what makes or breaks a portfolio in the long run.

On this week’s episode, the deep analysis of the 2023 Berkshire Hathaway shareholder letter continues as Phil and Danielle wring every ounce of wisdom from Buffett’s annual communiqué..

For help with future-proofing your portfolio, click here for a free copy of The Ultimate Stock Market Crash Survival Guide:  https://bit.ly/3xNXFlf

Topics Discussed:

Munger’s influence on Buffett’s philosophy

Investing in the information age

Mutual funds vs ETFs

Modern market volatility

Forgoing returns to prepare for downturns


Resources Discussed:

Berkshire Hathaway shareholder letter

Wilshire GDP ratio


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464- Not-So-Secret Weapon

Here’s a scenario: you’ve identified a potential investment, you’ve gone through the checklist and done your research, and you decide that you’ve found a deal that other people seem to be overlooking.  You pull the trigger to buy into this company, and then the stock price begins to decline and you begin to wonder if you’ve made a mistake.

Knowing the difference between having confidence in your investing process and being arrogant or blindly confident in a position can allow investors to act on proven strategy as opposed to being driven by fear and emotion.  Having a long-term outlook and a diligent methodology is the way for capable value investors to find the deals and realize the returns that many others in the market get wrong.

This week, Phil and Danielle tackle another constant issue for investors as they dig into when, how, and why you should (or shouldn’t) stick with a purchase that doesn’t seem to be panning out the way you’d suspected.

For help finding businesses that you feel confident investing in, click here for the “3 Circles” Exercise Guide:  https://bit.ly/3LOexg2

Topics Discussed:

Patience and discipline in value investing

The dangers of hubris and confirmation bias

Informed assumptions vs speculation


Resources Discussed:
Berkshire Hathaway shareholder letter (2013)

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463- Bad Investment

Free cash flow can be a golden ticket in the hands of a company with the right leadership. They can use it to supercharge innovation, expand their reach, or reward shareholders with dividends or buybacks, and for value investors, it’s like spotting a diamond in the rough.

After the growth and maintenance expenditures are accounted for, the way a company deploys its additional capital can signal the strength of management and the potential for future returns. As Buffett tells us in his recent letter, once you’ve got companies that check all of the boxes he’s looking for, this is the icing on the cake.

Join Phil and Danielle as they continue their analysis of this year’s shareholder letter from Berkshire Hathaway, pulling out key takeaways that might’ve been overlooked by some readers.

For help in crunching the numbers in your investment research process, click here to get your free Rule #1 Calculators for Investing Analysis: https://bit.ly/42dBHSn

Topics Discussed:

Individual values in investing

Entrepreneurship

See’s Candy

Operating cash flow

Growth/maintenance capital expenditure

Rare companies


Resources Discussed:
Berkshire Hathaway shareholder letter

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429- FROM THE VAULT: Bill Ackman’s Investing Checklist Part 2

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