In the practice of value investing, just like with so many other things in life, knowing when to wait patiently or when to jump ship is critical to the long-term success of your portfolio.

Being able to stomach market fluctuations isn’t something that everyone is capable of, but the mindset of buying into a business with long-term goals of generating cash flow means buying with the confidence that you’ll be able to weather the storms that may, and often do, come your way.

As the series on the Weather Matrix continues, Phil and Danielle discuss the importance of being in the “high understanding” quadrant of this tool as you consider potential investments and how that position makes it easier for you to decide what to buy and what to reject.

For a leg up on practices for generating consistent returns, click here for your free copy of How to Pick Stocks: The 5-Step Checklist: https://bit.ly/3ros8mU

Topics Discussed:

The power of compounding

Vanderbilts vs Rockefellers

Owner earnings

Investments vs speculation

Inverting

Durable competitive advantage

Pitch decks


Resources Discussed:
David Einhorn’s pitch decks

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457- Stop the Insanity

Is there a limit to how much an investor should know about a potential investment? While it can seem like there’s an infinite amount of relevant considerations for any given business, the ability to discern the difference between important information and extraneous data is an indispensable tool in the investor’s kit.

If jumping into the deep end of the S&P 500 seems like a daunting proposition, keeping your investing practice focused on a smaller scale can make the process of understanding “the weather” a much more manageable task. Keeping the boundaries of your research close to the boundaries of your own circle of competence can go a long way in terms of keeping the process from being overwhelming.

This week we join Phil and Danielle in a continuation of this series discussing their idea of business meteorology, a topic that has utility for everyone from investing novices to the most seasoned of financial forecasters.

To get started on your own Weather Matrix, click here for your free copy of The 5 Moats Investment Guide: https://bit.ly/3Kmb33J

Topics Discussed:

Investing circle of confidence

Intimidation in the research process

Buffett on taking advantage of the moment

Spotting warning signs

Netflix vs. other streamers


Resources Discussed:
The Weather Matrix (value/understanding)

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456- Buy Side Weather Matrix

Last week, the episode was centered around a tool for evaluating potential investments based on the myriad factors impacting their current performance and future trajectories, a topic that our hosts dubbed “the weather” of a business. While having a handle on a company’s worth and a clear gauge on one’s own understanding are both vital in making investment decisions, what other factors can—or should—influence the process?

The fundamental feeling of excitement or intrigue can be a divining rod in terms of pursuing investment opportunities, and though it can be easy to get caught up in the hype of compelling new prospect, it’s also important to remember that interest can be a powerful motivator when faced with a formidable research project.

Join Phil and Danielle as they venture further into the grid of their Weather Matrix, and learn how to find your own sweet spot when it comes to investing your time into researching investments.

For help in identifying opportunities and constructing your own Weather Matrix, click here for a free copy of 6 Market Crushing Investing Principles: https://bit.ly/45szJ2v

Topics Discussed:

Buffett’s mistakes

Buffett’s mistakes cont.

The value of intrigue in investing

Speed reading

Toxic positivity

Stoicism


Resources Discussed:

The Weather Matrix (value/understanding)

The Innovation Stack

Seeking Alpha

The Storyteller

Man’s Search For Meaning

Invested


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455- Weather Matrix Part 2

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

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454- Weather Matrix

Following up on last week’s discussion about the “weather” of a business, or how the climate of various internal and external factors can influence the long-term success of your prospective investment. With so much data available at our fingertip, how can we know what information is useful for research and what can safely be left out of our analyses?

Whether you’re looking into a company’s direct competitors or doing a bird’s eye view of a whole market sector, knowing when to go deeper vs when to stop digging is an incredibly useful skill to have in the world of 21st century global finance. For the value investor, the ability to reliably ascertain the value of a business is crucial for finding the right moment for a good deal.

Listen in this week as Phil and Danielle ponder the age old question of “what is enough?” When it comes to your investments, where is the magic line between being adequately informed and wasting your time?

For a better understanding of a business’s future success, click here to get your free copy of The 5 Moats Investment Guide: https://bit.ly/3Kmb33J

Topics Discussed:

Being paralyzed by the research process

Netflix growth issues

Evaluating a business’s moat

Instinct in the investing process

Change vs stability


Resources Discussed:
Invested

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453- The Weather- Numbers Almost Enough

For our first full episode of the new year, Phil and Danielle are reunited to talk about the various factors of a business’s climate that can help better understand where their weather will take them in the future.

From government overregulation to corporate mismanagement, there are risks inherent to investing that we can identify and include in our analysis for a more complete picture of the economic landscape. Staying current with the news doesn’t just make for a good citizen, but a good investor as well.

Join our hosts as they discuss Argentina, Medicare, CEO compensation, and why all of those should matter to the value investor of the 21st century.

If you want to start the new year on the right foot, get your free copy of Map Out Your Investing Journey to mark your progress and plan for the future:  https://bit.ly/3DTy4qN

Topics Discussed:

Inherent risks of investing

S&P 500 and other market indices

SEC rules

Argentina/USA in the 20th century and today

Governmental influence in economics

GM borrowing to pay dividends

Clinton’s executive pay reform

When to stop researching (more next week)


Resources Discussed:
Invested

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452- The Weather

As we get all of our 2024 ducks in a row, Danielle checks in to share some positive vibes for the upcoming year and offer a quick toast to prosperity and successful investing in 2024. While it's a short break from our regular programming, it's a moment to celebrate the journey we've taken together and the exciting opportunities that lie ahead.

To start your new year by planning for the ones to come, click here to get a free copy of our “Rule of 72” Cheat Sheet and gain a better understanding of retirement planning: https://bit.ly/47awVb6
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451- Happy New Year!

Happy 2024 to all InvestED listeners! While our hosts enjoy the holidays, we’re opening a year by going back to January of 2022 for a discussion about interest rates. With word of rate cuts on the horizon, how different are things now from when inflation was still climbing rapidly?

Understanding the Federal Reserve's interest rate maneuvers and their correlation with inflation is vitally important for assessing investment opportunities. The intricate dance between interest rates and the economy can impact borrowing, spending, and investment behaviors, so it’s crucial to keep up with the Fed’s moves in order to plan ahead.

To stay prepared for any changes in inflation or to the market as a whole, claim your FREE copy of the Rule #1 12-Month Planner: https://bit.ly/31ImPCl 

Topics Discussed:

Inflation

The future of the economy & markets

Supply & labor bottlenecks

Wage increase

Substitution


Resources Discussed:

Federal Reserve Economic Data (FRED)

FRED M1 Chart

Shadowstats


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450- FROM THE VAULT: The Fed & Inflation (Part 1)

On this bittersweet episode of InvestED, Phil and Danielle come together after taking some time to reflect on the impact of Charlie Munger, both in the financial world as well as in their own personal lives and investing journeys.

The loss of such a magnanimous figure will surely leave a void in the value investing community, but as Li Lu penned in his eulogy for Munger (link below), the man’s contributions to the collective understanding of investing practice will be felt utilized and pored over for generations to come.

Looking back on a life of great successes, philanthropy, and pithy wisdom that has inspired so many great investors to reach new heights, we have nothing to add.

For help following Charlie’s process of finding new companies to invest in, click here for Phil’s Value Investing Cheat Sheet: https://bit.ly/3QeCCje

Topics Discussed:

Investing as enlightenment

Munger’s aphorisms

EBITDA

Modern Portfolio Theory


Resources Discussed:

Li Lu’s eulogy for Charlie Munger

Autobiography of a Yogi

Munger’s BBC interview


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449- Charlie

We dig deep into the vault this week, going all the way back to 2018 to revisit one of our Charlie Munger-centric episodes. Phil and Danielle delve into the lesser-known strategies of the late great “Abominable No-Man,” revealing the hidden gems that can transform an ordinary investment portfolio into a stellar one.

Join us as we explore the wisdom of investment gurus, uncover the power of "cannibal companies," and unearth the untapped potential of valuable spin-offs. As we look back on the life and lessons of one of the investing world’s heavyweights, we learn how these insights can elevate your returns to an entirely new level of success.

For more ways to bolster your portfolio, click here for your free copy of the Rule #1 Must Have Investing Checklist: https://bit.ly/49bSWZ7

Topics Discussed:

Net-net investing

Cannibal companies

Apprenticeship


Resources Discussed:

Security Analysis

You Can Be a Stock Market Genius

Avatar

DanielleTown.com


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448- FROM THE VAULT: Charlie Munger’s 3 Ways to Build a Great Portfolio

The podcast is taking a break this week, but Danielle checks in briefly to share her thoughts on the loss of one of the investing world’s titans as Berkshire Hathaway’s Charlie Munger passed away this week at the age of 99.

Rule #1 owes a debt of gratitude to Charlie and the wisdom he’s contributed to the investing community over the past several decades. The legacy he leaves behind—from his outsized impact on the business world to the Mungerisms he was so fond of sharing—will be irreplaceable to those who looked to his guidance in their practice of value investing.

For a peek into some of the sharpest minds that the field of investing has to offer, click here for Rule #1’s free guide to The Best Investors in the World: https://bit.ly/3DhbmIS

Topics Discussed:
Charlie Munger

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447- Thank You, Charlie Munger

Venturing into investing often feels nerve-wracking due to uncertainties in financial markets and the fear of potential losses. Value investing, when done properly, stands out as a reliable approach due to careful assessment of the true worth and long-term growth potential of investments.

By conducting thorough research and understanding the genuine value of investments, value investing offers a sense of security that traditional trading cannot. It's a method rooted in solid evaluation, making it a less intimidating option for those uneasy about the inherent unpredictability of investing and seeking a more stable approach.

This week, Phil and Danielle follow up the Thanksgiving holiday with a discussion on the importance of having a grateful attitude, and how being cognizant of the advantages and resources available to many who venture into this practice can have a positive effect on your mental (and financial) well-being.

If you’re feeling hesitant to take the plunge into the world of value investing, don’t miss your free copy of The Four Ms for Successful Investing: https://bit.ly/3LhVUAR

Topics Discussed:

Fears about investing

Retirement planning

Swiss vs American social programs

Societal factors impacting social mobility

Ben Graham

Value investing’s track record

Importance of being grateful

The power of the internet in investing

Internet deserts


Resources Discussed:

A Random Walk Down Wall Street

Starlink


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446- Grateful

This week’s brief check-in comes as Americans in the US and around the world prepare for one of the country’s greatest traditions, Thanksgiving Day. Families everywhere are braving busy airports, clogged interstates, and crowded kitchens as they come together to give thanks, eat large amounts of food, and digest in front of the annual gridiron classics.

We here at InvestED want to wish all of our listeners a safe and happy Thanksgiving break, and Phil and Danielle will be back next week to discuss food comas and all sorts of topics related to the exciting world of value investing.

To catch up on all of the must-listen episodes from our back catalog and get better connected to the world of Rule #1 Investing, click here for the Best of InvestED: https://bit.ly/3MUOiFn

Topics Discussed:

Thanksgiving traditions for expats

Food traditions

Solo holiday tips


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445- Turkey Day!

What exactly constitutes a “mistake” when it comes to your investing practice? Is it any time a company doesn’t pan out the way you thought it would, or is it simply when something causes you to break Rule #1 and lose money?

While fear of being “wrong” on a position can be paralyzing for some, being willing and able to adapt to constantly shifting market conditions is a must for anyone looking to wade into the world of investing.

This week, Phil and Danielle talk about what it means to “get it wrong” in your investment practice and how that should (or shouldn’t) influence your decision-making process.

For more thought-provoking or debate-inspiring quotes from one of the world’s best investors, click here for the Warren Buffett Book of Quotes: https://bit.ly/3OEPXjL

Topics Discussed:

Durable competitive advantage

Mistakes vs. normal market occurrences

Investing mindset

Fear of failure in investing

Understanding and preparing for risk


Resources Discussed:
Rule #1 Investing

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444- Catastrophic Mistake

Founders are vital to a company's success due to their passion, deep understanding of the business, and ability to make agile decisions. Their personal stake in the company aligns their interests with shareholders, fostering commitment to long-term value creation.

For investors, recognizing the importance of founders is crucial. Founder-led companies tend to be more resilient and innovative than their competitors while having a unique focus on lasting success. Their leadership often results in strategic advantages, making such investments more attractive to value investors.

This week, Phil and Danielle discuss why having a central figurehead can be extremely valuable for companies, and how having the wrong person in such a crucial role can hamstring even the most promising of organizations.

To learn more about ways you could improve your own investing practice, click here for the Rule #1 Investing Personality Quiz: https://bit.ly/468F8eW

Topics Discussed:

Indian Wells, CA

Rebuilding VW engines

Shake Shack

Danny Meyer

Sanderson Farms

Apple in China

Succession planning


Resources Discussed:

Seven Samurai

Eleven Madison Park


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443- Key Man

Going public with a company, while often seen as a significant milestone, comes with several risks. The increased regulatory and compliance requirements can be burdensome and costly, and publicly traded companies must adhere to strict reporting standards which demand substantial time and resources.

Going public also exposes a company to scrutiny from shareholders and the public at large, which can bring heightened pressure to meet short-term financial targets at the cost of long-term strategic decisions. All of this weighs heavily into the consideration of whether or not a company should pursue an IPO.

After several weeks of discussing penny stocks, Phil and Danielle explore the reasoning behind why some companies choose to make this move while others are content keeping ownership private.

Make sure you’re covering all of your bases when looking to invest in a new business by getting your free copy of the Rule #1 Must-Have Investing Checklist: https://bit.ly/49bSWZ7 

Topics Discussed:

Listing a company in US stock markets

Microcap stocks

Megacap stocks

Raising capital for new businesses

Pacific Exchange


Resources Discussed:

Shake Shack

Rule of 72


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442- Sketchy Going Public

The abundance of unlisted companies available to buy into is a complicated resource for investors. One one hand, the opportunity that comes from smaller stocks being overlooked could lead to incredible results from unlikely sources, but the potential for staggering losses is equally high in this volatile market.

For those willing to dig into the thousands of pink sheet stocks and do the necessary due diligence, the penny stock market can be a gold mine of prospective businesses that don’t get attention from the vast majority of investors. However, this entirely hinges on avoiding the countless scams and schemes that plague these unlisted stocks.

This week, Phil and Danielle return once again to the topic of pink sheet stocks and why they may or may not be worth your time and attention as a value investor.

If you’re in the early stages of your investing journey, don’t miss out on your free copy of The Complete Guide to Investing for Beginners: https://bit.ly/3MBzewf

Topics Discussed:

Pink sheet stocks vs. OTCBB stocks

Reverse stock split

Issues of scale/accessibility


Resources Discussed:
Got something you’ve been wanting to ask Phil and Danielle? Send it to questions@investedpodcast.com

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441 - Penny Stocks part 3

For many uninitiated or inexperienced investors, the idea of trading inexpensive stocks can seem like a low-risk way to break into the world of investing. However, while the price tag on penny stocks may be easier to swallow than those of blue chip stocks, the relative risk is far greater than the risk of buying into a well-established company.

There are ways to approach investing at this level, and with the Rule #1 approach towards researching investments and analyzing price vs. value, the risk of speculation diminishes greatly when we’re buying into a company that we truly believe in.

On this week’s episode of InvestED, Phil and Danielle come back to the topic of penny stocks and discuss why the fundamentals of value investing can be applied to the smallest of companies in addition to the behemoths.

To understand more about the potential and reliability of a company you’re researching, click here to get your copy of the Big 5 Numbers Guide: https://bit.ly/3psMESQ

Topics Discussed:

Price volatility

Boiler rooms

Bid/ask

Activision/Blizzard acquisition

Chick-Fil-A

John Elway’s car dealerships

GameStop


Resources Discussed:

The Wolf of Wall Street

r/wallstreetbets


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440- Penny Stocks part 2

Before purchasing a company, Rule #1 Investors conduct extensive research to ensure that the company they intend to acquire aligns with the four key principles laid out by Charlie Munger. These principles are meaning, moat, management, and margin of safety.

In this week's Vault episode, Phil and Danielle return to the topic from last week’s listener question to dive into a discussion about the distinction between investing and speculating. They also take a closer look at the concept of "risky investing" and why Rule #1 considers the term an oxymoron.

To see how your investing knowledge stacks up and find ways to improve your approach to the practice, click here to take the Rule #1 Investing IQ quiz: https://bit.ly/3Faf7ks

Topics Discussed:

Buffett and Munger

Depression-era investing

The value of good management

Venture capital

Equity bonds

Investing vs. gambling


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439- FROM THE VAULT: Speculating vs. Investing

Is it possible for investors to achieve solid returns without exposing themselves to substantial risks? This is the fundamental principle behind Rule #1 Investing.

While many people look at investing as something akin to gambling, being a conscious value investor is vastly different from speculating, where the high risk is a fundamental aspect of the process.

In this week's Vault episode, Phil and Danielle delve into the distinction between being an investor and a speculator, highlighting just how crucial it is to truly grasp the nature of your investments. 

For an exercise that can help simplify your investing research process, click here for The “3 Circles” Exercise Guide: https://bit.ly/3LOexg2

Topics Discussed:

Zürich pronunciation

Investing/Sports analogies

Investing as ownership

Stocks vs. bonds

Strategy for recessions

Getting out early vs. late

Making money vs. preserving money


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