By e Investment Masters Class
The Investment Masters Class is based on the wisdom of the world’s greatest investors. Over the last few decades following investors with strong track records of compounding capital I’ve found that many common threads consistently surface. These common threads encompass a broad range of areas such as investor’s goals, processes, opportunities, obstacles, psychological construct, outlook and market views. Many are timeless. Below are 100 common threads of the Investment Masters which form the foundation of the Investment Masters Class tutorials.
1. The Number One Rule is don't lose money
2. Harnessing the power of compounding is the key to investment success
3. It’s better to be street smart than book smart when it comes to the market
4. Investing is an art, study the Masters
5. There are no get quick rich schemes, NIL, ZILCH
6. Successful investing is hard work
7. The Investment Masters read
8. Continuous learning is one of the keys to successful investing
9. As an Investor, you must know what your edge is
10. The Investment Masters love their jobs
11. Checklists help avoid human biases
12. Studying history gives you an edge, most things have happened before
13. All Investors make mistakes, the Investment Masters learn from theirs and others
14. Being an Investment Generalist helps one widen the scope of view
15. Understand what you own
16. Value Investors dominate the Investment Masters ranks
17. Prices maybe wrong
18. Risk and return are not correlated
19. Volatility is NOT risk. Volatility creates opportunities
20. Cash is an asset in a portfolio
21. Investment Masters understand the folly of forecasts
22. Don't forget, markets can turn on a dime
23. Pessimism can be a clarion call
24. Weak markets set the stage for high returns
25. Ignore tips
26. Investment Masters don't stray outside their circle of competence
27. Outperforming in down markets is the key to investment success
28. No Index Hugger has made the Investment Masters Hall of Fame
29. Only an Absolute Return focus is consistent with the First Rule of Investing: Preserve Capital
30. The Investment Masters get on base [rather than hit home-runs]
31. Valuation is a range not a number
32. Don't invest without a Margin Of Safety
33. Opportunities arise when prices don't reflect Private Market Value
34. Having a longer Time Horizon can give you an investment edge
35. Never assume interest rates will stay low indefinitely
36. Find Compounding Machines
37. The Investment Masters count the Cash coming out of the business
38. Don't waste your time trying to pick the bottom
39. Testing Investment Ideas helps identify where a thesis may be wrong
40. Don't let your investments go stale
41. Never forget things are always evolving
42. High levels of Correlation can lead to trouble
43. The Investment Master looks at less and sees more, because his Unconscious skill set is much more highly evolved
44. The greatest Investment Master of our time thinks the Efficient Market Hypothesis is garbage. Most Business Schools study the hypothesis not the Master"
45. Shorts can help protect capital, but the analysis of shorts differs significantly than for longs
46. You need to understand the benefits and pitfalls of Diversification
47. Focus on the Variables that are going to drive or destroy a company
48. There is no One Size fits all. Positions should be sized depending on a multitude of factors
49. Portfolio management is a LOT more than picking the right stocks
50. Management can break a company
51. Understanding Psychology can be the most important thing
52. The key to successful investing is overcoming your Emotions
53. The market humbles everyone
54. All you need is a little Patience
55. Don't fall in Love with three letters
56. It's Mr Market who provides the opportunities for high compound returns
57. The more people you have the more likely you will suffer from Groupthink
58. Human nature evolved for the survival of the species, not individual investors
59. It's important to understand the Bounds of your Knowledge
60. When people Hate a stock, there's more chance it's going to be mis-priced
61. The Investment Masters use Leverage sparingly if at all
62. Excessive Debt on a company's balance sheet can lead to investment ruin
63. Be on the lookout for Value Traps
64. The higher the rating the higher the potential for de-rating
65. There are Bubbles everywhere, be careful
66. The Investment Masters are the only Crowd you should follow
67. Don't put your faith in a Computer Model, keep thinking
68. Make sure you keep your eyes on the road ahead or you might drive off a cliff
69. New Eras ordinarily turn out to be mirages
70. Ignore the Macro at your peril
71. What is RISK? … Permanent Loss of Capital
72. Don't be unprepared for the Unexpected
73. You can drown in the absence of Liquidity
74. Capital Allocation is a required skill-set for Corporate Management
75. Be careful when companies are on an M&A binge
76. It's Asymmetry that's beautiful in investing
77. Trawl through the New Low Lists
78. Take notice of what Investment Masters are active in
79. Playing in Spin-offs can be profitable
80. Catalysts can speed up the crystallisation of profits
81. Invert [a thesis] so you don't face plant
82. The Investment Masters seek Quality in their companies
83. In Win-Win situations, you're less likely to lose
84. Industries that are Gonna Change the World for the positive may change your P&L for the negative
85. There is no margin of safety in Commodity Companies
86. The Investment Masters eat their Own Cooking
87. GOLD isn't a compound[er]"
88. The Investment Masters age like a good wine
89. The dark art [of charting] is still practiced
90. Sometimes you need a removed view
91. Don't confuse skill with luck
92. The scorecard is the P&L
93. Buy well
94. When it's not working get off the Tracks
95. Conventional is Not Conservative and vice versa
96. Projects suffer from Time Asymmetry and Human Biases
97. Only at the right price, Buybacks add value
98. Evolutionary biases can kill you in the market
99. It's important to understand the crowd behaviour in Bull Markets
100. Be mindful of Technological Obsolescence
