You probably don't need me to tell you that Apple reported earnings yesterday. Every financial media outlet out there has some type of article announcing the results. Here are a few of the article's I've come across this morning: Apple's earnings beat has some analysts worried it was too impressive Apple Earnings Fall on iPhone Slump Apple's Earnings: Analyst upbeat as 'toughest two quarters' now behind it Apple Earnings Fall on iPhone Slump … [Read more...] about Loving and hating Apple (NASDAQ: AAPL)
Archives for July 2016
I came across the video, Crazy - a Story of Debt by Grant Williams (embedded video below), the other day through The Investors Podcast, and it's worth the watch. If you don't have the time to watch the entire 40 minutes, half way through will do the trick. Believe me, the 20 minutes is worth the time. It is very well presented, informative, and actually fairly comical. We are clearly living in uncharted territory. There are a lot of uncertainties in our midst: Brexit, possibilities of future referendums from the EU, raises in interest rates, continuous terrorism, a new US president, national and global debt and the list goes on. Now, I don't want to get into which of those uncertainties I'm actually worried about. The point here is that the market is very worried about several of these and that these uncertainties could be a catalyst to making the market correct itself. I'll go on record that I believe the market is overvalued at current levels, but if you watch the video you don't need me telling you that. With this knowledge, what should we investors do? Predicting the stock market will prove to be futile From my post regarding where most investors stumble, predicting the market falls under speculating and isn't truly investing. It is good to understand the underlying drivers of today's stock market and what is causing the overvalution we are seeing. By doing so, you will be able to make thoughtful and rational decisions for your portfolio. Knowing that the market is overvalued and therefore moving your assets to cash or less risky assets in my opinion, is not predicting the market. I believe this is the case because I don't know when the market is going to correct itself. For all I know, it could happen two years down the line, or longer. Take a look at the history of bull and bear markets. This being the third longest bull market in history, it just solidifies my belief that I don't know what's going to happen or when. There have been longer bull markets, … [Read more...] about Predicting the Unpredictable
When I was growing up and first learned about dividends, I thought it was the greatest thing that I had ever heard to be true. "You mean if you own some stock, you can really get paid cash every so often, and potentially live off of it?" No doubt, I was hearing about people who were making thousands in dividends. Wouldn't that be nice? It wasn't until later I learned how much stock you would need to be able to live off of dividends, and even later still did I learn that maybe dividends aren't the greatest thing in the world. … [Read more...] about Dividends or no dividends?
I recently finished reading Seth Klarman's Margin of Safety, one of which I wish I had read earlier! I was able to find an online copy of this famous value investing book. If you're not familiar with Seth Klarman, he is a billionaire and founder of the Baupost Group, a value investment firm that manages about $30 billion. Before founding Baupost, Klarman worked for Max Heine and Michael Price of the Mutual Series Fund which is now part of Franklin Templeton. There, he was fortunate to learn how to invest unconventionally (value invest) and achieve high returns. After going to Harvard Business School, he helped found Baupost and quickly became known for this "unconventional" strategy of his. He is known as a very conservative investor, often holding large amounts of cash in times of high uncertainty. In these times, he has been known to hold up to 50% cash in the portfolio, waiting to deploy the capital in undervalued securities when the opportunity arises. This obviously takes a certain amount of discipline and patience to wait for these opportunities, as well as a considerable amount of faith from investors for allowing their holdings to be in such a low-return asset for a period of time. After 9 years of managing Baupost, he decided to impart some of his investment wisdom on the world by writing Margin of Safety: Risk Averse Value Investing Strategies for the Thoughtful Investor. Today, the book is out of print and can be bought for upwards of $1,500 for a copy! If you're interested in getting a copy, I would recommend typing in "Margin of Safety pdf" on Google and go with the free version from there. Although, one may argue that the $1,500 could be a bargain based on the insights you can gain from this book :-). The book is split into three sections: 1) Where Most Investors Stumble 2) A Value Investment Philosophy and 3) The Value-Investment Process. This post is focusing on the first section, covering a few chapters on "Where Most Investors Stumble". This … [Read more...] about Where Most Investors Stumble (Seth Klarman’s Margin of Safety)