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

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