The 21st century has brought the world a number of revolutionary developments that have turned the world on its head, with one of the most important cultural shifts being the rise of the attention economy. With so many entities all vying for a piece of your time, how can you know when you’re spending too much of that limited resource on your investing research?

With decades of investing experience and a bit of basic mathematics, Phil explains a tool to classify companies into four groups based on their price/value ratio and the investor’s understanding of the business. If you find yourself getting bogged down or stuck in the weeds on your investing journey, this method could be the thing you need to streamline your research.

For more help calculating the ever-important metric of price vs value, get your free copy of Understanding Market Capitalizatin: https://bit.ly/44p1xE9

Topics Discussed:

How much effort is too much effort?

Accumulation of knowledge

Price/value discrepancies

Being prepared to “weather the storm”

How to capitalize on market downturns

Importance of repetition


Resources Discussed:
The Weather matrix

Learn more about your ad choices. Visit megaphone.fm/adchoices

454- Weather Matrix

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.

Business

Investing

Careers

Management & Marketing

Business News

Shopping

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


Learn more about your ad choices. Visit megaphone.fm/adchoices

465- Ulta's Makeup Weather

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


Learn more about your ad choices. Visit megaphone.fm/adchoices

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)

Learn more about your ad choices. Visit megaphone.fm/adchoices

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

Learn more about your ad choices. Visit megaphone.fm/adchoices

462- A Third Kind of Capital

As detailed in the most recent edition of Berkshire Hathaway’s annual shareholder letter, finding success in value investing doesn’t require fancy credentials, obsessive research, or exploitative scheming — it takes common sense and the willingness to keep yourself informed about your investments.

In a world full of people rabidly vying for your attention in every imaginable arena, knowing how to focus that attention on what’s important while weeding out the noise of the pundits and snake oil salesmen is what separates successful investors from the rest of the pack.

In this week’s show, Phil and Danielle get a bit more granular on the most recent Berkshire Hathaway shareholder letter and discuss what separates Bertie Buffett from her competition.

To get the inside scoop on more ways industry leaders mislead investors, click here for your free copy of The 3 Greatest Stock Market Myths Ever Told: https://bit.ly/45NycoE

Topics Discussed:

Flashy and half-baked or simple and flawless

Simplifying the research process

Snowboarding lessons for investing

Typical CEO letters

Punditry vs information


Resources Discussed:
Berkshire Hathaway shareholder letter

Learn more about your ad choices. Visit megaphone.fm/adchoices

454- Weather Matrix

Download our free app to listen on your phone