Talking Billions with Bogumil Baranowski

John Rotonti: Becoming a Better Investor, Great Conversation with a Seasoned Stock Picker


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John Rotonti was formerly a Senior Analyst and Head of Investor Training and Development at The Motley Fool. After 9 years at The Motley Fool he is now an individual investor and "free agent" figuring out his next steps.

John is too modest to admit, but he has had a lot of success picking stocks throughout the years, and today he will share his insights, process, and advice for anyone curious about finding good investment for the long-run.

I connected with John through Brad Barrett, best-selling author, and a host of an award winning podcast – Choose FI, where he shares his wisdom about financial independence. Brad was an earlier guest on the podcast, and we had one of the best conversations on the show.

Today, with John,

1. We began our discussion with John's early life, exploring how his upbringing and experiences influenced his relationship with money, investing, and how it ultimately led him to his career path.

2. John shared his insights into what it takes to become a successful stock picker, discussing the criteria and metrics used at Motley Fool, where he was once the highest-ranked stock picker.

3. We talked about a simple yet powerful investment formula that John shared in one of his articles. He explained key concepts like return on invested capital and valuation, why they matter, and how they can contribute to long-term market outperformance.

4. John provided another secret to successful investing: the influence of free cash flow yield. He broke down these concepts for those new to investing, emphasizing their impact on investment return.

5. We discussed the "vital signs" of a business that a stock analyst looks for, according to John. These include a strong balance sheet, return on invested capital, top-line growth, and bottom-line growth.

6. Moving beyond numbers, John shared his thoughts on evaluating good management, highlighting its significance in successful investing.

7. John described his meticulous approach to conducting stock research and shared the importance of using a checklist to avoid overlooking crucial information.

8. We delved into the aspects of buying, holding, and selling stocks. John stressed the importance of patience in active investing and the necessity of adapting to changes in circumstances.

9. John offered advice for investors navigating both major market sell-offs and overheated bull markets, emphasizing the lessons that can be learned from both experiences.

10. To conclude, we talked about John's personal definition of success, exploring what this term means to him in the context of his investing career.

Find John on Twitter: @JRogrow



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Talking Billions with Bogumil BaranowskiBy Bogumil Baranowski

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