In a 2015 paper, S&P Dow Jones Indices showed more than 84% of US active funds underperformed the S&P 500 over a 12-month period. Over a 10-year period, only 2% of active funds outperformed their benchmark. Similar results also popped up in Europe and the UK. Its clear institutional investors don’t have all the answers.
There are many famed drop outs: Steve Jobs, Bill Gates, Mark Zuckerberg and Michael Dell. Surely one of the most famed serial entrepreneur and drop out is Richard Branson. At 16, Branson gave up studies to start his own magazine business. The magazine was called ‘Student’. It was a mail order business, which created a revenue from advertising. With a steady readership, Branson thought he could also sell other product […]
Garbage in, garbage out. It’s a phrase typically used when talking about forecasting. Because it’s such a subjective art, your forecasts are highly dependent upon the assumptions you make. Lowering or increasing growth assumptions, discount rates and margins can drastically change what a financial model spits out. Hence, if your assumptions are garbage you’ll get a garbage valuation. Like I’ve mentioned before, there’s nothing wrong with creating financial models and […]
What’s better, stocks or bonds? Well it depends. If we were looking to for capital appreciation, then stocks are better. But if you wanted to create a steady reliable income, bonds are better. That’s the common thought anyway. But according to legendary fund manager, Peter Lynch, whether you want capital growth or income, stocks are the only answer.
Wouldn’t it be great to know the future? Sure it might take the spontaneity out of life. But you could become the best investor ever. There is no such thing as a perfect investment record. Everyone picks up some losers along the way. But if you had an idea of what might happen, you could avoid the ‘bad eggs’ as they say. This is what financial models try to do. […]
There are two types of value investors. Those in the Benjamin Graham camp (value) and those in the Warren Buffett camp (compounders). Both look to buy business for far less than they’re worth. However, that doesn’t mean they both look for the same types of businesses.
I can’t put any top spin on the ball. My backhand usually lands outside the lines. It’s safe to say I’m no tennis pro. But that doesn’t stop me from trying.