Fundamental Insights: Your Investment Blog

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The Benefits of Small Capital: Why Individual Investors Have the Upper Hand

In a previous post, I discussed how individual investors have a significant advantage over professional money managers: they don’t face the pressure of outside capital being redeemed. This allows them to adopt a long-term investment strategy, regardless of short-term market fluctuations. In contrast, professional fund managers must consider short-term performance to retain investors and assets […]

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The Edge of Individual Investors – Permanent Capital

Investing Psychology

In an article in The Wall Street Journal titled You’re More Like Warren Buffett Than You Think, financial journalist Spencer Jakab highlighted what I believe to be one of Warren Buffett’s most important, and certainly most overlooked, competitive advantages: Buffett has permanent capital with which to invest. This is not the case for managers of

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What is the Best Financial Metric?

Business Evaluation

If I had to choose a single metric to track the health of a business, that metric would be return on invested capital (ROIC). This metric helps answer what I believe is the single most important question in business: can the business earn a fair return on the financial capital that is placed in it?

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Introduction to Commercial Real Estate Part 5: Financing the Deal

Case Studies

Introduction Real estate is an “other people’s money” (OPM) business, and commercial real estate investors often spend a significant amount of time raising capital for individual deals. This capital comes in two forms: debt and equity. In this post, we will look at how commercial real estate investors raise both equity and debt capital. Equity

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Introduction to Commercial Real Estate Part 4: Due Diligence

Case Studies

Introduction Due diligence is one of, if not the, most important periods in the real estate investment process. It is during the due diligence phase that the investor looks for any factors which can change the financial merits of the purchase. These factors may prompt the investor to either renegotiate terms with the seller or

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Review of Codie Sanchez’s Main Street Millionaire

Case Studies

I don’t frequently do book reviews, but occasionally a book is published that is so closely aligned with the Fundamental Investing Institute’s mission of educating and empowering entrepreneurs and individual investors that I would be remiss not to comment on it. Codie Sanchez’s book, Main Street Millionaire: How to Make Extraordinary Wealth Buying Ordinary Businesses

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Introduction to Commercial Real Estate Investing Part 3: Valuing Commercial Property

Case Studies

Introduction What most distinguishes an investment asset from a speculative asset is the comparison of price vs. appraised value. To an investor, the comparison of price and value is the most important consideration. It is only fitting, then, that I devote a post in this series to the valuation of commercial property. Before I go

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Introduction to Commercial Real Estate Investing Part 2 – The JOBS Act

Case Studies

Introduction In 2004, I accompanied a friend to a real estate networking event held at a local country club. As my friend and I made our way through the room looking for our assigned seat, we were approached by a middle-aged man. He politely introduced himself and then quickly asked if we were “accredited investors.”

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Introduction to Commercial Real Estate Investing Part 1

Case Studies

Introduction Unlike many other books or blogs, my intent is not to show how great commercial real estate is compared with other investment alternatives. Rather, my intent is to discuss, as objectively as possible, commercial real estate as an asset class. Specifically, I hope to reach smaller investors, who can now invest in real estate

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Money and Banking Part 8: The Global Financial System

Macro & Financial System

The modern economy is highly globalized. Goods, services, and capital can flow between countries in a highly efficient manner. The price of a country’s currency relative to other currencies greatly affects that country’s economy. The currencies of most industrial economies trade freely against one another. The foreign exchange market is the market where currencies are

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