I think specialists are doomed for failure in this market because they have tunnel vision and they're incapable of looking past their specialty. If you can see the big picture, big picture in terms of looking at what happens across companies, not just in your market, but geographically across markets. You don't make money by finding mistakes. You make money from those mistakes getting corrected. Buying low P, racial stocks is not a philosophy. That's a strategy. But there's another ingredient that we don't like to talk about because it makes us uncomfortable which is being lucky. Let's face it, you could run an experiment. You could go back in time and restart the Warren Buffett experiment - he
IN THIS EPISODE, YOU’LL LEARN:
00:00 - Intro
03:53 - The importance of having an investment philosophy and how to figure out what your investment philosophy is.
The difference between having an investment philosophy and strategy.
03:53 - An example of what a growth investor’s investment philosophy may be, such as the famous growth investor Peter Lynch.
08:22 - Why Aswath believes it’s better to be a generalist than a specialist in one area of investing.
15:00 - What are value drivers and how to apply them in our valuation process?
15:00 - The 5 basic variables we need to value any business.
24:27 - How to convert these value drivers into a DCF or intrinsic value model.
26:23 - The most common mistakes investors make when valuing a company and how to avoid these.
26:23 - Aswath’s test on how to figure out if your growth rate is reasonable.
29:23 - How to figure out what discount rate we should use?
36:11 - Why Aswath doesn’t believe in a “hold forever mentality” of stocks in a value investing approach.
37:24 - How often we should revisit our valuations for companies?
56:53 - How do companies get on Aswath’s radar?
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
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