Finding Value in Long-term Investments

This chapter discusses the importance of long-term business fundamentals over short-term metrics like PE ratios in stock investments. It highlights strategies for identifying high-growth stocks and emphasizes the need for thorough research and capital allocation to make informed investment decisions.

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Episode notes

On today’s episode, Clay reviews Thomas Phelps’s book - 100 to 1 in the Stock Market, and also highlights writings put out by Akre Capital Management.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro.

02:30 - Common characteristics of companies that increased their share price by 100x.

11:11 - Why most investors aren’t able to hang onto their winners as Phelps suggests.

14:05 - Why good stock selection is much more important than good stock market timing.

31:36 - Mental models Phelps uses to figure out the odds when investing.

42:47 - Why we should invest with companies that align with our own values.

45:29 - When to look for potential 100 Baggers.

47:39 - The four categories of companies that were 100 Baggers in Phelps’s study.

52:53 - Who is best equipped to be individual stock pickers.

56:57 - Chuck Akre’s three-legged stool approach.

60:15 - Takeaways from two of Akre Capital’s brilliant articles - ‘Why Compounding is so Difficult’ and ‘The Art of (Not) Selling’.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Thomas Phelps’s book - 100 to 1 in the Stock Market.
Akre Capital Managements writings: Why Compounding is so Difficult and The Art of (Not) Selling.
Check out our newly released TIP Mastermind Community.
Check out our recent episode covering the The Outsiders by William Thorndike, or watch the video.
Follow Clay on Twitter.

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