it’s the end of the world as we know it…

Apologies in advance for the bait-and-switch, but this is not an article in which I warn you about imminent financial Armageddon. However, listening to the famous R.E.M. song over the weekend got me thinking -  what if the (financial) world did actually come to an end tomorrow?   Broad-based market sell-offs are inevitable and it's … Continue reading it’s the end of the world as we know it…

why long term thinking is crucial

With the market becoming increasingly focussed on the short term earnings outlook for a company, I thought it would be worthwhile stepping back to first principles: how do we determine what a business is worth? The idea of a stock being worth the present value of all the future cash flows it would generate was … Continue reading why long term thinking is crucial

sometimes all you have to do is pick up the $20 note

There is an old economics joke that tells the story of a Finance Professor and his student walking down the street together: The student looks down and sees a $20 bill on the street and says, “Hey, look a twenty-dollar bill!” Without even looking, his older and wiser Professor replies, “Nonsense. If there had been … Continue reading sometimes all you have to do is pick up the $20 note

weekly wrap 18/08/17

"Acting with the crowd ensures an acceptable mediocrity; acting independently runs the risk of unacceptable under-performance” - Seth Klarman     This week I've been reading HBR's Guide to Buying a Small Business, by Richard Ruback and Royce Yudkoff. What I enjoyed most about the book was its practicality and applicability - even if you're not … Continue reading weekly wrap 18/08/17

A quant scan for good capital allocators

Over the past few weeks I've been doing some in-depth due diligence on a potential investment that operates in the advertising industry. A key focus of my DD process is the sustainability of customers and their associated annual spend - recurring revenues from loyal, sticky customers are high on my priority list. A quick way … Continue reading A quant scan for good capital allocators

reducing hindsight bias through decision journals

One of the key modifications that I've made to my investment process this year, is the introduction of a decision journal. I came across the concept many years ago but never followed through with the implementation. That changed after I read The Emotionally Intelligent Investor, by Ravee Mehta. Throughout the book he preaches the importance of understanding one’s … Continue reading reducing hindsight bias through decision journals