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- Herausgeber: 1kkbooks
- Kategorie: Fachliteratur
- Sprache: Englisch
Investing like a guru is a detailed investment introduction book on value investing. The concept that is used by Warren Buffet, Charlie Munger and other billionaire Investors all through history.
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Seitenzahl: 137
Veröffentlichungsjahr: 2017
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INVEST LIKE A GURU
Introduction To Value Investing; Invest Like Warren Buffett, Invest Like Charlie Munger, Invest like A Billionaire.
Jimmy Putnik
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PRONOUN
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All rights reserved. Aside from brief quotations for media coverage and reviews, no part of this book may be reproduced or distributed in any form without the author’s permission. Thank you for supporting authors and a diverse, creative culture by purchasing this book and complying with copyright laws.
Copyright © 2017 by Jimmy Putnik
Interior design by Pronoun
Distribution by Pronoun
ISBN: 9781641865845
TABLE OF CONTENTS
THE PRINCIPLE OF MARGIN OF SAFETY
The Two Benjamin Graham Rules
Price Compared to Book value
Price Compared to Earnings
INVEST IN COMPANIES WITH A STRONG MOAT
Coca-Cola
Gillette
GEICO
INVESTING FOR THE LONG TERM
IMPORTANCE OF GOOD MANAGEMENT
UNDERSTANDING DIVIDENDS
Bear markets
Psychological advantage
CONSERVATIVE VALUATION
INVESTING VS SPECULATING
INVESTING VS TRADING
The stock market is liquid
Trading Taxation
INVEST IN BUSINESSES THAT YOU UNDERSTAND
SAFETY OF PRINCIPAL AND AN ADEQUATE RETURN
THE AMAZING POWER OF COMPOUND INTEREST
VALUE INVESTORS ARE DEFENSIVE
THE PSYCHOLOGY OF VALUE INVESTING
DONT COMPARE YOUR RESULTS
CONCLUSION DONT TIME THE MARKET
TABLE OF CONTENTS
INTRODUCTION
THE PRINCIPLE OF MARGIN OF SAFETY
The Two Benjamin Graham Rules
Price Compared to Book value
Price Compared to Earnings
INVEST IN COMPANIES WITH A STRONG MOAT
Coca-Cola
Gillette
GEICO
INVESTING FOR THE LONG TERM
IMPORTANCE OF GOOD MANAGEMENT
UNDERSTANDING DIVIDENDS
Bear markets
Psychological advantage
CONSERVATIVE VALUATION
INVESTING VS SPECULATING
INVESTING VS TRADING
The stock market is liquid
Trading Taxation
INVEST IN BUSINESSES THAT YOU UNDERSTAND
SAFETY OF PRINCIPAL AND AN ADEQUATE RETURN
THE AMAZING POWER OF COMPOUND INTEREST
VALUE INVESTORS ARE DEFENSIVE
THE PSYCHOLOGY OF VALUE INVESTING
DONT COMPARE YOUR RESULTS
CONCLUSION DONT TIME THE MARKET
Welcome to the course “value investing and stock market fundamentals; the simplest way to get rich”. Obviously, a lot of ink has been spilled, a lot of books have been written and a lot of courses have been produced about making money and building wealth. In my ten years as an entrepreneur and business teacher one of the things I have noticed over and over again is how bad people are at investing and personal finance. Well out of all of the myriad ways of investing and building wealth one way stands out among all of them as the best, because it is the simplest and it has been proven to be the most successful by the greatest investors in history and that is this concept of value investing and investing based on fundamental analysis versus tactical analysis.
INTRODUCTION
So we’re going to learn the basics of value investing; this course is going to be focused on learning how to: -
think about picking stocks and investing over time.
having a longterm strategy and having a successful record to become a millionaire.
Which anybody can do even if you don’t have a high salary and you can’t save very much money. Value investing is the proven way to do it. We’re going to show you how some of the greatest investors in history have done it of course value investing is the method of Warren Buffett, who at various times has been the richest man the whole world, right now he’s probably like fifth or fourth behind a few of the others as it fluctuates. He has invested his whole entire life money investing in stocks and this is his approach and while none of us are taking this course, myself included are ever going to become a billionaire or at least not very likely like Warren Buffett.
These principles have been proven to build wealth over time and it is a very simple and easy approach. Most people don’t do this because: -
it does take discipline
it does take patience
it does take effort
but it’s not complicated.
Warren Buffett’s mentor, Benjamin Graham, he’s the one who taught Warren Buffett about this and he wrote what is by far the best book on investing in history and that is called “The Intelligent Investor”, which I recommend you go out and buy and read from cover to cover ten times. You will understand everything in this course much more easily after reading that book. It is a very complex and long sort of book and of course the reason we take a course like this is so we can get all of that information in bite sized chunks and not have to study and read and spend tens of thousands of hours investing, we want to get everything broken down into a summary form which is the service that I’m providing for you guys right now.
And finally, Charlie monger, that is Warren Buffett’s partner; all of these guys have a long term record in the stock market of around 20% compound return over fifty years . We only need to get about half that or even less than half of that to build portfolio worth millions of dollars over the course our working life. Meaning, anywhere from 20 to 40 years you should be able to build a multi-million-dollar portfolio.
I will show you in the course how it can be done, exactly following this plan right now I am on track to achieve everything that we talk about this course with this method with my stock portfolio. This is the method that is proven it’s simple and it’s easy. We are going to learn why most people don’t do it and all the different, simple ways to get started and stay on track with this strategy over time. It’s been proven over and over and over again and in addition to the fact that it’s relatively easy and simple it has a lot of psychological benefits that other approaches to investing simply don’t have.
It’s stress free,
it’s passive
Once you’ve put your money in and you can automate everything so it’s completely passive you don’t have to think about it and while you may not get 15% or 20% returns, most people don’t get those anyways, even hedge funds as well learn throughout this course tend to underperform in the stock market indexes.
You will get adequate returns
The idea that people want to beat the market or you want to be able to get outstanding returns or get rich in the stock market, those are dangerous ideas because 99% of the investing public will not do it and cannot do. Through an investing for value and through the concepts that we are going to learn in this course such as: -
All of these value investing principles are easily understandable and easily learned and what they do is they provide the psychological benefits that lower your risk that allows you to sleep well at night all while building wealth steadily and surely over time. It’s the only approach to investing that has all of these attributes that’s guaranteed to work, that’s been proven to work and so that is why I had developed this course for you as an introduction to value investing. Actually have looked at a few other online courses that are out there about this and I decided that mine would add value because I believe I’ve broken it down into simpler terms that are more easy to understand. They are based on the theories of Benjamin Graham, Warren Buffett and Charlie Munger.
Hopefully these these ideas are conveyed in a way that is very understandable for everybody in this course. Finally, remember that value investing is passive as I already mentioned and it’s fun. It’s fun because you don’t to worry about losing your money like most people do investing in high flying growth stocks and tech stocks with high P. E. multiples trying to double triple your money in a year.
That’s very stressful, it’s very unlikely to be successful especially over long-time periods. Some people will get lucky and they’ll you know hit a winner and they will double their money maybe they’ll think; “Oh I’m pretty good at the stock picking stuff”. It’s really easy to do in a bull market but over time year in and year out having a strong performance and building wealth is generally extremely difficult to do if you’re not using this. I don’t want to call it a system, it is not like a stock picking system but it’s an approach. It’s the only real approach to investing, it’s the fundamentals of investing.
If you want to be a good basketball player or a good musician you have to learn the fundamentals of those disciplines, well investing is the same thing, you learn the fundamentals and then you apply them. Most people don’t want to learn the fundamentals they read articles online or they listen to these gurus and read their books and buy their products and they’re trying to sell you something, they’re selling you different systems and approaches and formula type investing. Benjamin Graham and Buffett, they don’t try to do that, they tell you the truth, about;
It’s very simple but yet, it’s very powerful. I’m happy to bring this course you guys and I hope you get a lot out of it.
THE PRINCIPLE OF MARGIN OF SAFETY
AT THE HEART OF THE value investing method of stock picking, is this idea the margin of safety principle.
It says that: -
“you only buy stocks when you have a significant margin of safety”
This protects you from downside and helps you to sleep well at night. You will see that over and over again, this is the theme throughout this course of value investing. The psychological benefits of investing in a way that is conservative and defensive in nature. It has many psychological benefits among other benefits as well. The margin of safety principle is the core of the whole entire approach to investing. It’s the idea that when you buy a stock, when you invest in a business that is publicly traded in the stock market, you want to pay prices that are lower than the intrinsic value of the business.
This is the approach that looks at fundamental analysis of the underlying business attached to a stock as opposed to what I mentioned in the intro what is called technical analysis. This is where traders, we see them on T.V talking about the charts, the price action and the prices going up and down. They are trying to predict where the price is going to go, up or down. It is extremely complicated, Warren Buffett himself has said it’s way too complicated, he doesn’t understand how to do it, he doesn’t believe anybody understands how to do it. Which might make you think, “well then, how there are thousands of professionals on T.V. all the time predicting this and that?” And the answer is, they’re not very good at it and they don’t know what they’re doing. This is the actual conclusion that Benjamin Graham, Charlie Munger, Warren Buffett and others have come to.
You can’t predict the future, it’s too complex, there are too many variables involved in the stock market. Things are going to happen are unpredictable, from wars to a recession to laws being changed and the list just goes on and on but when you invest with a margin of safety in mind, which we’re going to learn how to do in the course, you are getting protection from downside, from the stock going down. You are likely to get with what Benjamin Graham called safety of capital and an adequate return. Instead of trying to hit a home run and get rich quickly what we are content to do with value investing is invest in good businesses that have a long track record of profitability and want to pay low prices for them.
It may be a much better investment to buy a nondescript decent company that’s not famous, is not a high growth company but if we get a really low price on the shares and they’re likely to go up and not likely to go down, that’s a much better and safer investment which should give you an adequate return. When we say adequate return, we’re thinking somewhere in the range of 8% to 10% or so. Which is about the long-term return of the major stock indexes and how they have performed over time.
When you have a margin of safety, you’re looking at those type of businesses and those types of prices. You’re generally not going to be looking at those stocks that have huge price multiples like Amazon, Facebook or others because they’re inherently risky and even though those companies are producing a lot of wealth, well at least in the case of Facebook; amazon actually loses money most of time but it’s just growing its revenue very quickly.
They’re very risky because, while they can go up really fast, they can also go down very quickly if things change or if they have one bad quarter. When you invest with a margin of safety it’s very unlikely that your stock is going to crash because you’re buying and you’re attempting to at least by businesses that are trading with a price that is lower than what the business value would be measured on the street for, like a private buyer. That’s the concept, you are looking at the actual business and seeing what is it worth and then you look at the stock price and you see It seems like it should be priced higher than this based on how much money it’s making and other ways that we will learn on how to actually value companies in the real world.
When you go to business school or when you’re an entrepreneur and you buy businesses, you learn that the stock market prices things differently. We’re going to talk a lot throughout the course about why this is so and how it works but the margin of safety principle this is basically the core, it’s where you start with approach called value investing.
THE TWO BENJAMIN GRAHAM RULES
In this course we’re going to identify the two main ways that Benjamin Graham said a defensive investor should try to obtain a margin of safety. They’re very simple and very basic; they basically ignore a lot of the noise and other factors in a business. This is the way you can identify at least candidates that would make good prospects for investment. Though these are simple rules, they are very valuable in terms of protecting against the downside.
First rule: -
Buy when the price of the stock is low compared to its book value.
second rule: -
Buy when the price is low compared to its earnings.
PRICE COMPARED TO BOOK VALUE
Book value means; the net assets of the business after you’ve subtracted out all of the liabilities, everything they owe (debts). You look at what is the actual net assets that the business owns, that means it’s real estate, it’s cash, it’s inventory, actual physical assets on the balance sheet. How much is that business worth not even counting its cash flow and income, just its assets after you take out all of the debt.
