I try to get a picture of how they write about their company and how they talk about it, and who they put on their board and who they are associated with. I feeli quite confident in my ability to do that. There's a point at which no one can evaluate somebody a hundred% even if they're married to them or someyou know, like, how many of us have made mistakes? So you never really know with somebody. But there'sa, i think it's very helpful to me to weed out the ones who i think are more obvious. And again, just to mention the buffet letters, all he does is praise his managers over and over andover and over
William Albert Ackman is an American investor and hedge fund manager. He has a well-known 8-point investing checklist, which is straightforward and reflects the basic principles of Rule #1 Investing.
That checklist includes only investing in simple and predictable businesses with a dominant market position, limited risk, a strong balance sheet, excellent management, high return on capital, free cash flow generative, and large barriers to entry.
Sound familiar?
There’s a lot of talk in the financial community about “diversification,” which simply means investing your money in a variety of ways in order to provide a safety net should one investment go south. The thing is, you don’t need to diversify if you know how to invest and understand what you are investing in.
By taking the time to research and learn about the companies you are investing in, you are providing your own safety net, because you won’t invest in any company that doesn’t meet the standards for a wonderful company, as it is defined in Rule #1 Investing. That is key.
This week on InvestED, Phil and Danielle discuss Bill Ackman’s checklist more in-depth, and explain why you can’t blindly put your money in stocks chosen at random and expect to achieve great returns.
In order to succeed investing in the stock market, you have to use a system and a strategy. Learn how to find and pick quality stocks with this FREE Four Ms Guide: https://bit.ly/3krSdvB
Topics discussed in this episode:
- Bill Ackman
- Valuation methods of investing
- Rational investing
- Tesla stock
- Coca-Cola stock
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