This post is Part 2 of a Beginner’s Guide to Stock Investing series. Part Two: What Is the Stock Market? In December of 1980, a computer company founded out of a garage in Los Angeles, California, began trading on a stock exchange known as the National Association of Securities Dealers Automated Quotations (NASDAQ). At the […]
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This post is part of an ongoing series reflecting on Warren Buffett’s career and investment philosophy. Buffett on Scale and Structural Advantage In 1999, at the height of the dotcom bubble, Warren Buffett gave an interview for BusinessWeek. Buffett was discussing how the combination of an over-heated stock market and Berkshire Hathaway’s large size made
Reflection on Warren Buffett’s Career: The Partnership Years Read More »
This post is Part One of a Beginner’s Guide to Stock Investing series. Part 1: What is a Stock? Most people have some familiarity with the stock market. But what is exactly is a stock? Why do people buy stocks? There are plenty of people who trade stocks. That is, they attempt to forecast the
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Early Life and Family Influences In the first post in this series, I wrote a bit about how I encountered Warren Buffett’s investment philosophy as an undergraduate student (read it here). In this post, I discuss Warren Buffett’s early years and some of the influences that shaped his early career. Warren Buffett was born on
Reflections on Warren Buffett’s Career: Early Influences Read More »
The Dow Jones Industrial Average (DJIA) This post is the second part in a series covering the four major stock indices. What Is the Dow Jones Industrial Average? In the last post, I discussed the most referenced stock index – the Standard and Poor’s (S&P) 500. Another widely reported, and far older, index is the
The Dow Jones (DJIA) History, Structure & Key Limitations: Understanding Stock Indices Read More »
This blog post is the first in a four-part series. It explores the four major stock indices, which are the benchmarks that shape how we talk about “the market.” Before diving into the S&P 500 specifically, it’s worth taking a step back to understand what a stock index really is and why it matters. From
Understanding Stock Indices: How the S&P 500 Shapes the Market Read More »
When Momentum Cuts Both Ways Tuesday’s gold selloff highlights a feature of markets that too many people forget: momentum works both ways. Gold has had one of its best years since it was demonetized in 1971. On the spot market—where gold is purchased for immediate delivery—prices have risen from roughly $2,600 at the beginning of
Gold’s Momentum Trade: Why Prices Are Rising — and Falling — Faster Than Ever Read More »
“Ignoring the Macro” Can Be Misleading Value investors invest in businesses, not markets. Accordingly, many investors take pride in “ignoring the macro and focusing on the micro.” In my opinion, investors shouldn’t take this adage too literally. I’ve seen too many financial market blowups to think that “ignoring the macro” is a good idea. The
Macro Risks: Why Smart Investors Pay Attention to the Bigger Picture Read More »
In a previous blog post, The Risks of Financial Leverage in Small Business Acquisitions, I discussed the increased number of online influencers. They are promoting small business acquisitions as a path to creating wealth. While there are plenty of entrepreneurs who have become very wealthy acquiring small businesses, these deals are not without risk. Influencers
Small Business Acquisition – The Management Factor Read More »
Why Small Business Acquisitions Look So Attractive Many business influencer’s have been touting the benefits of acquiring a small business and installing an operator. As someone who has invested in a handful of small businesses and has consulted for many more, I thought it would be remiss of me not to highlight some of the
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