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

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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

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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.

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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.

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.

Throwback Thursday – Lionel Messi Is A Failure

Throwback Thursday – Lionel Messi Is A Failure

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This is the third 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 even now, 2.5 years later, it’s still one of the most regularly viewed articles on this site.

Other than some minor edits and updates, this is the same exact post as originally published in 2015.

Jason

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Famous Failures

This post is a continuation of my Famous Failures series.  To view earlier posts in this series go to this link.

The aim of Famous Failures is to show that all successful people are failures, and that to become great, we have to fail, learn, and keep moving forward.

Lionel Messi Is A Failure

In case you don’t know, the picture above is of the best football player in the world. Lionel Messi. The Michael Jordan of soccer.

Leo Messi

The above screen capture is from this video on Famous FailuresIt’s about the best footballer in the world – and my favorite player – Lionel Messi.

Below is an excerpt from this article detailing some of the adversity he faced growing up.

But Messi is no stranger to adversity. Born with an outstanding, audacious talent, nature, almost as if re-dressing the balance, denied him the growth hormone that would permit him to grow the same as most other children.

Messi said: “When I was 11 years old they discovered that I had a growth hormone deficiency and I had to start a treatment to help me to grow.

Every night I had to stick a needle into my legs, night after night after night, every day of the week, and this over a period of three years.”

“I was so small, they said that when I went onto the pitch, or when I went to school, I was always the smallest of all. It was like this until I finished the treatment and I then started to grow properly”.

A team cut him when he was 11 due to health issues.  But he chose to work and go after his dream of playing for FC Barcelona.  In time he became the best football player in the world, and one of the best of all time. The info below is from Wikipedia.

He’s won 22 team championships in eight different competitions. Has won dozens of awards including being the world’s best player, a record four straight times.  And holds – and is still breaking – dozens of records around the world.

For more information on Lionel Messi read: Lionel Messi Is The Best Footballer The World Has Ever Seen.

But to really understand his greatness you need to watch him. Below is a 6:22 video showing some of the reasons why many think he’s the best football player ever.

And to think, none of us would ever have known anything about Lionel Messi if he gave up when he first failed.

Dream big… Imagine what you can do if you keep pushing forward instead of quitting when you fail.

What do you think of Lionel Messi? Do you admire him and the way he plays football? Do you think he’s a failure for not winning a World Cup yet? Or are you wrong and think Cristiano Ronaldo is a better player 🙂

Let me know in the comments below.

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P.S. Since writing this in 2015, I’ve read Messi’s biography by Guillem Ballague – Messi – which I designate as a MUST READ!!! on the Recommended Reading and Viewing page of this blog.  If you want a more in depth look at the MASSIVE amount of hard work and sacrifice Messi went through to get to where he is today, this book is fantastic.

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.

When Does Value Investing Work Best? Value Investing In Your Car Episode 2

When Does Value Investing Work Best? Value Investing In Your Car Episode 2

In Episode 1 of Value Investing In Your Car, I answered the question Does Value Investing Work Anywhere In The World?

But I forgot to answer the question when does value investing work best?  That’s what I’m doing today in Episode 2 of Value Investing In Your Car seen in the video below.

In the short 13 minute video I answer the above question and these other ones…

  • Why value investing works best in certain situations?
  • When was the last time I bought a new stock?… Hint – it’s almost 3 years ago now.
  • Why haven’t I bought a new stock in so long?
  • What have I been doing since?
  • Why have I been doing these things?
  • Are valuations high around the world?  Hint – Yes, valuations across the board and across the globe the highest they’ve been since 1900.

When was the last time you bought a stock?  How often are you still finding value in your own research?

I’d love to hear your responses here as value investing is a bit of a bubble when it comes to this kind of stuff.

Oh and before I forget, below is the link talked about during the video where I talk about valuations being at all-time highs since 1900, if you wanted to read this and gain more context.

This article is from Goldman Sachs.

According to Goldman valuations across the board – stock markets, real estate, bonds – are at the highest levels they’ve been at since 1900.  And this is around the world.

P.S.  I’d love your help naming our new podcast/vlog…  If you have a great name please send it to valueinvestingjourneyteam@gmail.com with the Subject Line of Name For Your Podcast/Vlog so my team knows what the message is about.

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

Does Value Investing Work Anywhere In The World?

Does Value Investing Work Anywhere In The World?

I’ve gotten the above question a TON lately.  So I wanted to answer it for you in the short video below.

In short for those who don’t want to watch the 9-minute video…

  • Yes, value investing SHOULD work anywhere in the world…
  • But, there are places it doesn’t for specific reasons.
  • And there are times where it works better and worse than others.

I talk about the first two things above in the video but forgot to talk about the last one so I’ll do that in the next episode.

And something else I forgot to mention in the above video is that the company HAS to have financial statements in English as well.

Why?

Because while I wouldn’t mind trusting Google Translate when it comes to works of fiction where I can miss a few words here and there.

When it comes to a technical document like financial reports I read every single word.  And need to know that those words are correct and not just Google Translate or some algorithm guessing.

Below is a brief summary of some of the other things I talk about in the video above.

  • An exception proving the rule above
  • Companies selling at 70% net cash.
  • Countries where I’ve talked with other investors from around the world.
  • Fat pitches.
  • 23 countries represented on my watchlist.
  • And more.

I’d love to hear your thoughts on this topic in the comments below because I know MOST investors and value investors only focus on the United States so I’m in the minority here.

P.S.  I’d love your help naming our new podcast/vlog…  If you have a great name please send it to valueinvestingjourneyteam@gmail.com with the Subject Line of Name For Your Podcast/Vlog so my team knows what the message is about.

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