Throwback Thursday – Dole Investment Analysis Case Study Part 1

Throwback Thursday – Dole Investment Analysis Case Study Part 1

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This is the sixth post in our new Throwback Thursday’s Series, where we share with you posts from the past blogs to bring you as much value as possible.

Today, I’m beginning a series on Dole in these Throwback Thursday posts.

I researched and wrote extensively about Dole when I began doing ‘real’ investment research in 2012.

I’m going to be reposting a series of my past research and investment articles on Dole beginning today.

They’re a great case study in doing deep work.  Here are some of the things we’ll be looking at in this series…

  • HOW to find the value of potentially hundreds of millions or billions of dollars worth of hidden assets
  • The signs of a company potentially having hidden value
  • Doing deep work to find the value of these and other things people won’t look for
  • Valuations and how and why I’ve done these valuations
  • And more

I hope you enjoy this series and know we can all learn a lot from doing this.

Oh and please excuse the poor writing style and huge paragraphs. I wrote this in 2012 before I learned how to write.

As always, nothing is changed below from the past article in 2012.

Jason

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This article is the fourth and final article in the series detailing the businesses of Dole (DOLE), Chiquita (CQB), and Fresh Del Monte (FDP). If you want to see the valuations and brief descriptions of these companies, please view these articles: DOLE, CQB, and FDP.

In this article, I will go over the margins of all the companies to determine if there are any sustainable competitive advantages. I will decide whether I would buy any of these companies as they currently stand, without the possibility of any kind of merger, spin off, or massive asset sales. I will also look into whether or not a merger between any of the companies would be a good thing.

Before I start with my analysis of the three, I need to go back and look into Dole’s total contractual obligations in comparison to Chiquita’s and Fresh Del Monte’s. At the time I’ve done Dole’s valuations, I wasn’t doing as thorough of research as I am doing now, and did not talk about their total obligations in the original article I wrote.

On page 40 of Dole’s 2011 10K, they list their total obligations and commitments as of December 31, 2011. The total obligations and commitments, including debt, is $4.68 billion, and over the next two years it comes out to $2.661 billion. Their current market cap is $765 million. Not a great ratio, but not terrible like Chiquita’s. The total obligations / market cap ratios for all of the companies are:

  • Dole: 4680/765=6.12
  • Chiquita: 3167/220=14.40
  • Fresh Del Monte: 1992/1310=1.52

Fresh Del Monte has by far the most sustainable ratio in my mind and should have no problems if another crisis hits them individually or the economy as a whole. Dole might be able to make it through another crisis, even if they don’t decide to do some kind of asset sale or spin off like they are looking into right now. Chiquita’s ratio is horrendous and I would be worried about them if I was a shareholder of theirs.

All of these companies have low amounts of cash and cash equivalents on hand, which is another thing to possibly worry about with Dole and Chiquita if something bad were to happen in the economy. In any kind of emergency, they would most likely either default on some of their obligations, have to draw down their credit facilities, or try to take on some more debt if they could, most likely on unfavorable terms.

Now, let us get to the margins of all three and try to determine if any of them have a competitive advantage.

Dole (DOLE) Chiquita (CQB) Fresh Del Monte (FDP)
Gross Margin (Current) 10.5 12.9 8.8
Gross Margin (5 years ago) 9 12.4 10.8
Gross Margin (10 years ago) 16 16.1 16.1
Op Margin (Current) 2.7 -0.3 3
Op Margin (5 years ago) 1.9 0.7 5.2
Op Margin (10 years ago) 6.5 2.2 10.3
Net Margin (Current) 0.75 0.69 2.84
Net Margin (5 years ago) -0.83 -1.05 5.34
Net Margin (10 years ago) 0.83 0.91 9.34
FCF/Sales (Current) -0.58 0.12 2.66
FCF/Sales (5 years ago) N/A -0.08 2.42
FCF/Sales (10 years ago) N/A 2.37 11.86
BV Per Share (Current) $9.30 $17.42 $30.41
BV Per Share (5 years ago) N/A $21.03 $23.65
BV Per Share (10 years ago) N/A $15.80 $13.51
ROIC (Current) 2.16 1.53 5.21
ROIC (5 years ago) -2.12 -2.72 11.66
ROIC (10 years ago) 1.98 1.63 22.56
Insider Ownership (Current) 59.06% 3.33% 35.72%

These companies, for the most part, all have operations in the same segments and the next table will be showing the margins of those comparable operations.

Dole Chiquita Fresh Del Monte
Total Fresh Fruit EBIT 172 N/A N/A
Total Fresh Fruit Revenues 5,024 N/A 2,721
Fresh Fruit EBIT Margin 3.42% N/A N/A
Total Vegetable EBIT 31 N/A N/A
Total Vegetable Revenues 1,002 N/A 523
Vegetable EBIT Margin 3.10% N/A N/A
Packaged Food EBIT 96.5 N/A N/A
Packaged Food Revenues 1,197 N/A 355
Packaged Food EBIT Margin 8.10% N/A N/A
Total Operations EBIT 300 33.7 116
Total Operations Revenues 7,224 3,139 3,590
Total EBIT Margin 4.15% 1.07% 3.23%

In a perfect world Chiquita and Fresh Del Monte would have broken their operations out further like Dole does. Instead they choose to combine their operations reporting data, especially the Operating Margin data, otherwise known as EBIT. So at this point, it is impossible for me to break out the data further than it is in the above table.

Taking the above information, combined with the information in the previous articles, I think that I have enough information to make some judgments on the companies.

As things currently stand, I would NOT buy Chiquita under any circumstance, not even with the possibility of a spin off or asset sale. Their low margins, combined with their huge amount of total obligations, and low cash on hand, scare me too much to invest in them. That is not even taking into account the fact that, in my valuations, I found them to be about fairly valued to slightly undervalued, not nearly enough of a margin of safety for me considering all the risks. I also do not see them being bought out by anyone due to their high amount of total obligations. The only thing going in their favor is that they are selling for less than book value by a good margin, which is currently $17.42 per share, but at this point it looks to be justified.

Fresh Del Monte is interesting. They are selling for less than book value by a good margin, which is currently at $30.41 per share, they generally have the best margins of the three companies, and they also have high insider ownership, which I always love. However, by my estimates they appear to be slightly overvalued at this point, and have low cash on hand. They are also the company out of the three in the best position to make some acquisitions: in my opinion, a merger between Dole and Fresh Del Monte could possibly be a good thing. They have already been buying back a lot of shares and are the only one out of the three to pay a dividend, which are more pluses. At this point, I am not going to buy Fresh Del Monte, but I will wait for an opportunity when they are undervalued and will reassess at that time whether or not I will be a buyer then.

Without the possibility of a spin off or asset sale that I outlined in my original article on Dole, I would not be a buyer into their company right now either.  Pretty much the same problems as Chiquita: high debt / total obligations, low cash, low overall margins. However, they do have high inside ownership, they are selling at a slight discount to book value, and by my valuations are extremely undervalued. I do stick to my original assessment about Dole though, that they are a great spin off opportunity if they decide to do a spin off or asset sale. If they do what I suggested in the original article I think they could unlock value, get rid of a lot of their debt, and become a much more focused and profitable company. Especially if they put a lot of their resources into the packaged fruit portion of the business, as it has the highest margins in Dole’s operating structure. Dole also has the 88,000 acres of land that they could sell some of to pay down debts as well.

I did buy half of a position in Dole based on the spin off thesis in my original article. I am waiting to see if they announce a spin off or asset sale to jump fully into Dole at this point. They are in the spin off portion of my portfolio which I plan to hold for 6 months to several years. I do not consider them a long term buy and hold for decades company.

It also appears to me that none of the companies have any kind of sustainable competitive advantage, with their wildly fluctuating margins over the past 10 years, and no one becoming dominant.

I hope everyone has enjoyed and learned something from the analysis and valuation series on Dole, Chiquita, and Fresh Del Monte, and I look forward to some feedback.

***

P.S  If you want to get every post like this in the future, please subscribe for free here.

P.P.S. I put on a FREE webinar last Thursday teaching The 3 Secrets That Have Helped Me Beat Buffett In The Stock Market, so you can possibly do the same. If you’d like to sign up for FREE to view the replay of the webinar, you can do so here.

The Next GE – Interview #2 With Eric Schleien of The Intelligent Investing Podcast

The Next GE – Interview #2 With Eric Schleien of The Intelligent Investing Podcast

In the first interview I did with Eric Schleien of The Intelligent Investing Podcast in 2016, we talked about more general value investing concepts, mindsets and processes.

In today’s interview, we talk about an investment I made in 2015 that I called ‘The Next GE’.

In the 27 – minute interview linked below, we go over this investment case study style that I recommended in October 2015 exclusively to Press On Research subscribers.

We do this to figure out a couple of things…

  • Why I titled this company’s recommendation issue ‘The Next GE’
  • Why they’re now up 460% as of this writing since I recommended them

Some of the other things we also talk about in the interview are…

  • Valuation
  • How this company compared to its competition
  • Where I found this company
  • How I found this company
  • How you can find extreme value in the small cap OTC and ADR arenas
  • And more

Here is the description of the interview from Eric’s podcast site…

In this interview, Eric Schleien goes through an investment case study Jason Rivera recommended to his subscribers and for the portfolios he manages about a small and obscure company that has almost tripled since 2015.

When he recommended them, he titled the issue The Next GE and in this interview we go over why he thought that.

His podcast has interviews with other great up and coming value investors as well so make sure to listen to them.

You can listen to the interview here if you don’t have iTunes.

Or you can listen here if you do have iTunes.

Make sure to follow Eric on Twitter, and subscribe to his great podcast when listening to either of the above places.

I hope you enjoy and find some great value in the interview.

Oh, and by the way…

If you listen to the interview, you also get a couple of free resources to learn from that I provided exclusively to listeners of this interview.

One I’ve never released before other than to paying subscribers.

I hope you enjoy 🙂 and let me know your thoughts on this company in the comments below once you listen to the interview and download the FREE resources.

P.S. The analysis I did on this – and EVERY company I evaluate – is based on the preliminary analysis template I developed over the last 11 years, and after evaluating thousands of companies. If you’d like a copy of this to do your own preliminary analysis, you can get yours for free here.

P.P.S. I put on a FREE webinar last Thursday teaching The 3 Secrets That Have Helped Me Beat Buffett In The Stock Market, so you can possibly do the same. If you’d like to sign up for FREE to view the replay of the webinar, you can do so here.

Throwback Thursday – Updated Recommended Reading and Viewing Page

Throwback Thursday – Updated Recommended Reading and Viewing Page

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This is the fifth post in our new Throwback Thursday’s Series, where we share with you posts from the past blogs to bring you as much value as possible.

I’m not posting a ‘normal’ article today, instead I’m posting the updated Recommended Reading and Viewing Page in full below.

Why?

Because one of the questions I get asked most is some version of the question “What are some great books you recommend?”

Well these books, sites and videos are some of the best resources I’ve learned from over the years.

This is the most up to date version of the MOST viewed page on this blog every single year. This update includes 11 new book recommendations.

I know the resources on this post and on the Recommended Reading and Viewing page can help you reach your goals.

Jason

***

2017 Performance Review – NOW Six Full Years Beating Buffett and Crushing The Market

2017 Performance Review – NOW Six Full Years Beating Buffett and Crushing The Market

2017 is also known as the year of continuing to find a few great stocks and sit on your ass and do nothing.

Charlie Munger said this – or something similar – and it’s what I’ve done for almost 3 full years now.

I’ve bought ZERO new stock investments since April of 2015, when I bought a few great businesses, and haven’t done much since.

Why?

Well this article explains several of the reasons

Goldman Sachs says Valuations Across The Board Are At Highs Not Seen Since 1900

I’ve known this for years as I’ve searched all over the world for public company investments and around the US for multi-family apartment building investments since 2015.

But this is where we, as deep and disciplined value investors, can gain a MASSIVE advantage over other investors.

And 2017 further showed this approach of buying great companies and sitting on your ass for a few years, can make you and the people you invest in, a lot of money.

The above quote from Benjamin Graham is one of my favorites.

It means in the short-term, emotion and psychology drive the market. But in the long-term, the market – and individual stocks – get judged on how well they’ve operated and grown over time.

This is great news for us as long-term oriented value investors.

If we can find a few great companies at cheap to fair prices and hold them for the long-term, we’ll have great returns over time. Why? Because…

“Time is the friend of the wonderful company, the enemy of the mediocre.” – Warren Buffett

With this as a backdrop, below is the 2017 performance review.

For links to 20122013, 2013 updated numbers, and 2014 and 2015, 2016 performance reviews, go to the previous links.

Also, as noted above in some of the individual posts, I made multiple mistakes in 2013 when calculating my returns. The numbers below – which show the six full years between 2012 and 2017 – are correct.

2017 Performance Review

I still own all the companies from 2014 and 2015 except one. I bought 3 new companies in 2016, and ZERO investments in 2017. These investments produced a 13.5% average return in 2017.

Here are the highlights from this year:

  • One of the companies I recommended while working at the investment newsletter, is up more than 300% since I recommended them in 2014 / 2015.
  • One company I recommended in Press On Research was up 154.6% JUST in 2017.
  • This same company has now QUADRUPLED since recommending them in 2015.
  • Another two Press On Research picks from 2015 have more than doubled.
  • The average market cap at the time of these recommendations was $246.4 million.
  • The average market cap of the 11 companies I still own – not including the company that was bought out last year – is now $543 million.

Below is the full spreadsheet…

2017 VIJ and POR Performance Review

If you’d like to know what these companies are, you can do so by purchasing ALL past issues at a 50% discount by using this code 2018ALLISSUES in our shop today.

Note. The only product that this code will work on is the ALL issues package here. To purchase this package for 50% off, put the ALL issues package in your cart and use the code 2018ALLISSUES before checking out.

So what does this mean for cumulative full six-year returns now?

Six Full Years Beating Buffett…

Here are Buffett’s returns that I’m referencing.

The Buffett Partnership Returns

I don’t compare myself to Buffett because I want to be the next Buffett. But because everyone knows who he is as he’s regarded by most as the best investor ever.

I want to be known as the first Jason Rivera when my career is over.

At the end, I want to be known as a better investor and capital allocator than Buffett and to produce better returns over time than he has so I can help millions or billions of people all over the world.

At least for now – six full years into my career – I am achieving this lofty goal by beating Buffett, when compared to the first six years of his career.

In the first six years of my career, I’ve produced average – non-compounded – returns of 27% each year. Or a total cumulative return of 162% over that period.

In the first six years of his career, Buffett produced average – non-compounded – returns of 23.1% each year. Or a total cumulative return of 138.8% over that period.

This means in the first six years of our careers, I’ve produced returns 3.9 percentage points better each year than Buffett did in the first six years of his career.

But what does this 3.9 percentage point excess return per year mean in dollar terms over this period?

Assuming we both started with an asset base of $10 million at the beginning of the six-year period, I would have grown that $10 million into $41.959 million after six years.

Buffett would have turned his investors $10 million into $34.798 million in that time.

This is why every point of excess returns is so important, and why you need to be aware of any fees charged to your account by your money managers.

Over a long period – or in this case six years – ‘only’ an excess 3.9 percentage points each year would have made investors $5.7 million extra.

And this further illustrates the power of compounding over time.

Last year, this difference between my returns and Buffett’s returns were 4.3 percentage points and a $5.7 million difference. This year, it’s a 3.9 percentage point difference and $7.161 million.

Even though the actual percentage point difference dropped by 0.4 percentage points, the amount increased because of the power of compounding and an extra year by $1.461 million.

Not only am I achieving my lofty goal of beating Buffett through this time, but I’m also crushing the market as well.

And Crushing The Market

From 2012 through 2017 the Dow Jones Index produced a total cumulative return of 48.9% – or almost doubled – for the six years or 8.2% per year on average.

The S&P 500 produced a 51.3% total return  – or more than doubled – for the six years or 8.6% per year on average.

And the Russell 3000 index – the closest thing to a small cap index – produced a 59% total return or 9.8% per year on average.

I’ve produced returns in excess of these indexes by 18.8%, 18.4%, and 17.2% points respectively each year over these six years.

Assuming a $10 million asset base like above, I would have produced $24.5 million more for investors over this six-year period than the Russell 3000 index would have.

  • $41.959 million minus $17.5 million the Russell 3000 would have produced.

I started posting my results publicly in 2012 because this is when I began doing ‘real’, in-depth, investment research and analysis instead of speculating.

Results have been great thus far, better than I expected. But there’s still a lot of work and improvement necessary to continue this. Especially with valuations near or at all-time highs.

Other Highlights From 2017

Thanks to you investing in yourself via sales of my products, services, and consulting jobs we continued helping Mhicaella and her family in the Philippines.

The last letter we received from her mother told us that Mhicaella is now in 1st grade. She loves P.E. and is learning to read and write.

Here is a picture of Mhicaella when we first started helping her and her family…

Here is a recent picture of Mhicaella…

Mhicaella N.
The beautiful little girl we’re all helping support and have a better life in the Philippines.

With your help, some of the things we’ve been able to help provide for her and her family over the last year are school supplies, medical and dental care, and Christmas gifts for her entire family.

A percentage of all sales of my books, services, and products sold will continue going towards charities like these well into the future.

We will expand on this in the future and help even more kids and their families.

Thank you so much for helping and being a part of this milestone.

***

Other highlights from 2017 are:

  • Got my real estate license.
  • Learned an IMMENSE amount about real estate and real estate investing.
  • Put offers in on several multi-family and single-family properties.
  • Didn’t get any of these deals due to excessive valuations and getting outbid.
  • Did a lot of consulting work for a large firm in New York and Ohio.
  • Learned an IMMENSE amount about marketing in all facets.
  • Expanded my circle of competence into single family and multi-family investments.
  • Grew our mailing list and social media following A LOT.
  • Read around 50 books this year.
  • As mentioned above we continued helping Mhicaella and her family in the Philippines survive and thrive.
  • Learned several valuable skills to help my own businesses and others business.
  • Got several value investment coaching clients this year.
  • Began to build several value investing courses.
  • Hired 4 part-time team members.
  • We helped a lot more people this year than we have in the past due to the things above.
  • Began building more products, services, courses, etc to help as many people as we possibly can.
  • And a lot more

All this will continue to grow even more as we go forward and learn and improve.

Conclusion Thoughts

We’re still beating Buffet after six full years and crushing the market but both are catching up.

Value investing works best with a falling or stagnant market so with valuations at or near all-time highs – and reaching new highs on an almost every day basis still – this is expected.

Unless the market corrects sometime soon, I would expect Mr. Buffett and the market to continue catching up to or possibly passing us in the near future.

As I said last year at this time, barring a major sell-off I expect to add few to no companies again in 2018.

This is because I will only buy something that meets my ultra-strict criteria.  Under no circumstances will I buy something because I haven’t bought in a while.

This helps keep us only in great companies and real estate investments and should help us continue producing exceptional returns over time.

No matter what the market continues to do though over time I’m confident we’ll continue to beat the market by a wide margin. And continue to compound our wealth over time.

And with the market’s march ever higher, it’s allowed me to take the time to learn other valuable business skills.

This will help us even more over the long term as we get back into buying public companies stock. And into buying private businesses and multi-family real estate investments once we reach enough revenue and cash flow.

Here’s looking forward to an even bigger and better 2018.

Thanks so much to everyone who’s been a part of this journey so far. And please let me know how I can continue to improve things going forward in the comments below.

Jason Rivera

Chairman, CEO, and Founder of Rivera Holdings LLC

Throwback Thursday – 10 Tips To Becoming A World Class Investment Analyst

Throwback Thursday – 10 Tips To Becoming A World Class Investment Analyst

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This is the fourth post in our new Throwback Thursday’s Series, where we share with you posts from the past blogs to bring you as much value as possible.

I’m reposting this article today because now that we’re at the beginning of a new year I wanted to post this to help you achieve anything you want in 2018.

The things I talk about below can be used to become great at any skill, not just value investing.

Other than some minor edits and updates, this is the same exact post as originally published in 2016.

Oh and sorry about the numbering… It got mixed up in the transfer and I can’t figure out how to fix it.

Jason

***

10 Tips To Becoming A World Class Investment Analyst

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This post is written in conjunction with Quandl as part of a series on how to become great investment analysts.

Quandl provides access to data and information useful to us as investment analysts.  So if you’re looking for specific data to make your analysis pop make sure to check out their site linked above.

***

Are you sure you want to be great?

No one admits they’re fine being average.  But our actions show otherwise.

Most of us would rather watch TV or random YouTube cat videos instead of working on improving and learning the skills necessary to improve and reach our goals.

The ones who do work towards greatness are often labeled antisocial hermits for not hanging out with friends and partying more…  Especially when young.

This social stigma keeps many of us from doing what we really want to do…

If you want to achieve greatness you must do things different than everyone.

If you want to improve fast you must endure short-term pain.  And sometimes ridicule from peers when you’re not doing what they expect you do to.

If you’re willing to do the work necessary to become a world class investment analyst below are the top ten things you have to do every day.

  1. Be Patient

Are you fine searching through thousands of companies only to invest in a few of them?  Are you fine going months or years without buying a new investment?

If you answer no to either you won’t be a great analyst.

I invest in less than 1 out of every 500 companies I research.  You need to have extreme patience and enjoy the hunt of buried treasure as much as actually finding it.

  1. You need to be an autodidact

Do you rely only on your degrees and certifications to get you by? Do you seek out new and sometimes contradictory information to continue to learn and improve processes?

To be a world class investment analyst you have to love learning, reading, and gaining knowledge on your own.

Degrees and certifications have nothing to do with how great of an investment analyst you are or can become.

If you’re not willing to read and continue learning you won’t become a world class investment analyst.  Because people like me who constantly read, learn, and work to improve will always be ahead of you.

  1. You must have strict and disciplined processes

If you can’t make unemotional decisions based on how your analysis plays out you won’t be great.

You can’t rely on preconceived notions, hearsay, emotion, or what Mr. Market’s doing.  Let your analysis take you where it does.

If you spend 100+ hours researching a company only to find at the end it’s not one you want to invest in don’t invest in it.

Just because you spend a lot of time evaluating a company doesn’t mean you need to invest in it.

If you have strict processes and have the discipline to stick to these processes you’ll invest in a fraction of the companies you research as mentioned above.

Don’t be average be great.  Again, this requires you do things different than everyone else.  Be selective in your investments to produce greater returns.

  1. Practice everything you learn as you learn it

When I started investing I would read everything but not practice anything I learned.  This led to years of wasted time as I had to go back and relearn things as I came across them and needed to know what they meant.

Don’t do this.

And when I say practice I don’t mean the normal practice most people do.  I mean deliberate practice.

  1. You need the fundamentals down pat

If you can’t explain what free cash flow, operating margin, and return on invested capital mean in terms a 6th grader can understand you don’t understand it well enough yourself.

You need to understand the basics better than other analysts to have an advantage over them.

  1. Be selfish with your time

If your friends are doing something you don’t want to do don’t do it.

This sounds easy but it’s not…  Remember the social stigma I talked about above?

If you want to improve fast be selfish with your time and find any spaces of time you have to learn.

As an example if your significant other’s taking forever getting ready to go out, instead of getting mad and anxious about them wasting your time read something.  Even if it’s only for five minutes.

The more you learn the faster you’ll improve.  Knowledge like money compounds over time.

Note on above quote: Most people – including me – can’t reach the 500 pages every day goal because of kids, significant others, family, work, relaxing so you don’t burn out, and life.  But it’s a goal to reach towards.

Read as much as you can every day.

  1. Don’t get complacent

There’s always more to learn.  Always an investment or thought process you can improve.  There are always more companies to look through.  Etc.

“The thing that amazes me about him {Nick Saban} is that he doesn’t let up,” says retired Florida State coach Bobby Bowden. “People start winning, they slack off. But he just keeps jumping on ‘complacency, complacency, complacency.’ Most coaches don’t think like that.”

To learn more about what it takes to be great read my post: Greatness According to Nick Saban.

  1. You need confidence in your abilities

“You need to balance arrogance and humility…when you buy anything, it’s an arrogant act. You are saying the markets are gyrating and somebody wants to sell this to me and I know more than everybody else so I am going to stand here and buy it. I am going to pay an 1/8th more than the next guy wants to pay and buy it. That’s arrogant. And you need the humility to say ‘but I might be wrong.’ And you have to do that on everything.” Seth Klarman

This doesn’t mean being overconfident.

You need to be humble enough to spot and fix any mistakes you make in your analysis that may only come out after you invest in or recommend something.

But if you’re not confident in yourself and judgments you make why should anyone else be?

  1. You can’t be afraid of mistakes.

No matter how great of an investment analyst you are you’re still going to make mistakes.  Investing isn’t something anyone can perfect.  Even Buffett, Munger, Klarman, and the other greats in our business make mistakes.

As investment analysts were doing great things if we’re right four to six times out of 10.  No one is right 10 out of 10 times in this business.  Leave your perfectionism at the door.

You need to be comfortable making mistakes.  And be humble enough to learn from them so you don’t repeat them going forward…  Hopefully.

If you’re stubborn like I am this may be a hard learned long-term lesson you need to work correcting every day.

  1. Be obsessive.

No one starts life as a great investor or thinker.  You need to train yourself to become great.  And the faster you learn the faster you’ll become great.

If you’re obsessive about learning the craft of becoming a world class investment analyst nothing can stop you.

High IQ isn’t necessary in this field.  It will be a hindrance if high IQ comes with overconfidence and not being humble.  So the only thing stopping you from becoming a great analyst is the amount of time you’re willing to put in.

Note the reading of 500 pages quote from Buffett above.

Are you obsessive enough about investing and analyzing businesses to work towards that goal?

Do you love learning, reading, and constant improvement enough in this field to continue to work even on days you don’t want to?

Bonus – Write your analysis down and let others critique your work.

Most of us hate being critiqued.  When we put dozen, hundreds, or thousands of hours into something over days, weeks, or years it’s natural that we don’t want people to point out the flaws in what we’re doing.

Fight this urge…

If you want to become great write your investment analysis down and have others critique it.  A great way to do this is to start a blog.

When I started my blog Value Investing Journey and began getting feedback my improvement as an analyst jumped into hyper speed.

I went from this “analysis” when I started the blog less than four years ago to being told a version of the following on a regular basis:

“If I were to go to anyone else in the entire company to get a second opinion valuing and analyzing an investment… I would go to you first.”

The above quote is what a former colleague told me upon leaving my job.

The company had around 50 employees.  And every other analyst had an MBA.  Decades of experience investing.  And ran or helped run billions of dollars at various hedge funds and firms before joining the investment newsletter we worked for.

I get told a version of the above on a regular basis but I’m not telling you this to brag.

I’m telling you this because if I can achieve this without any formal education and severe health issues while beginning my investment journey imagine what you can achieve with your formal training, degrees, mentors, and certifications.

If you don’t already have a or want to start a blog post articles on places like Seeking Alpha and Guru Focus to get feedback.

If you take this route beware of haters making personal attacks though.  Ignore these people and pay attention to the constructive feedback.

Conclusion

If you paid attention above you’ll notice many of the above tips go together.  And a lot of it revolves around how you choose to spend your time.

The choice is now yours… Are you willing to put in the time to become great?  Or are you fine being average and producing average returns and recommendations?

Time is the only thing keeping you from becoming a world class investment analyst.

So what are you going to do next?

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Let me know some of your 2018 goals in the comments below.

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P.P.S. I put on a FREE webinar last Thursday teaching The 3 Secrets That Have Helped Me Beat Buffett In The Stock Market, so you can possibly do the same. If you’d like to sign up for FREE to view the replay of the webinar, you can do so here.