100 Common Threads of the Investment Masters

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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. 

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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

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