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Happy Monday, <<First Name>>.
Wasn't last week a lot of crazy? We'll be talking about the whole GME/reddit affair on the show this week, but between that and the general concerns about the US market being in a bubble, our portfolio took a hit last week.
For the financial year to date, we're still performing well compared to the AORD, but the gap has declined since last week.
I'd also like to give a shout-out to Andy and the other guys in Melbourne who invited me to join their Zoom call last week. On the back of their event with Tony last month, they decided to keep getting together to compare notes on QAV, which I think is a great idea. I'd love to see QAV Clubs set up around the country.
As always, a reminder for new subscribers:
If you're looking for more content where Tony talks about the basics of his thinking about investing, don't forget to check out our archives. Scroll through our 2019 episodes and you'll find that's all we did in our first ~50 shows. We covered a ton of stuff. If you get through that 50 hours and still need more clarification, shoot us an email! Tony is always happy to revisit stuff to help clarify anything that's confusing, but our current episodes assume you already understand the basics.
I hope you all have a safe and pleasant holiday season and we'll be back in January!
Cameron
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ASX lower on fears of US bubble. Howard Marks’ capitulation. Ray Dalio’s thoughts on a coming US civil war. Using Gross Revenue Growth per Share to value “growth” stocks. Stock of the week – KRM. Using a logarithmic price scale. Tony’s thoughts on the Blue-Chippers in the ASX. Determining ‘Consistently Increasing Equity’. Defining ‘recent positive upturn’. Reasons to sell. NTD and the AUD. Waiting for reporting season. How to apportion additional funds. Sell lines for GGE, NHC, ESS.
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We continue to publish our 3PTL charts as we discuss them on the show. You can find them here.
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Tony's sole journal entry last week included notes on COG and APE. Now that he's back in Sydney, and we're coming into reporting season, you can expect a flurry of notes from him over the coming weeks.
He also recently shared some photos of his visit to Warren Buffett's house. No photos of him throwing his underwear on stage while Warren was talking, but I'm pretty sure that exists somewhere.
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I've started reading a new book called "Build Wealth With Common Stocks" by American value investor David J Waldron. He'll be a guest on our show in the near future.
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Here's his definition of value investing:
Buy and hold the common shares of US exchange-traded, dividend-paying, well-managed, financially sound businesses that produce easy-to-understand products or services, have enduring competitive advantages from wide economic moats, enjoy steady, free cash flow, and are trading at a discount to the investor’s perceived intrinsic value at the time of purchase. Next, of utmost importance and perhaps the biggest challenge, practice patience in waiting for the investment thesis to play out as projected over a long-term horizon.
And here's another piece of his investing wisdom:
Despite the inevitable volatility, I have no idea and forever dismiss expert predictions on market trends, stock prices, and interest rate movements as no more dependable than the entertaining Ouija board. Remain steadfast in buying and holding the stocks of quality companies to outperform the roller coaster movements of the market over time. On the contrary, trading stocks and currencies on speculation in the quest for fast money is fleeting, and the house wins most of those wagers anyhow.
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Steve Mabb sent us a link to this good article by Chris Leithner, which asks "Are you a customer, client or partner?" I've reach out to Chris to try to get him on our show. Here's a quote from the article:
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"It’s vitally important, yet hardly anybody has noticed it: remarkably few financial advisers, analysts, brokers, journalists, strategists and the like are financially independent. Few, in other words, own enough assets to generate a stream of income that finances their living expenses. Instead, they rely as heavily as the average adult does – that is, almost completely – upon their jobs and salaries."
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