Understanding Business Value and Market Timing

This chapter highlights the critical difference between great businesses and cyclical ones, stressing that investment quality is heavily influenced by the purchase price. The discussion includes reflections on the dot-com bubble and an intermission featuring sponsors and financial tools.

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In this episode, William Green chats with Chris Bloomstran, President & Chief Investment Officer of Semper Augustus. This conversation is so rich that it’s been divided into two episodes. Here, in Part 1, Chris explains how to achieve long-term success by seeking a “dual margin of safety” that comes from owning high-quality businesses at attractive prices. He also warns about the perennial dangers of irrational exuberance, which he now sees in hot stocks like Tesla & Nvidia.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

04:45 - What Chris Bloomstran learned from his brilliant mentor, Robert Smith.

08:17 - How Chris & Robert skillfully sidestepped the dotcom bubble & crash.

10:00 - What lessons Chris drew from an early investment that fell to zero.

35:17 - Why Chris named his investment firm after a crazily overvalued tulip.

44:53 - What Sir John Templeton saw as the best antidote to financial insanity.

55:38 - How to succeed in stocks by seeking a “dual margin of safety.”

56:51 - How his definition of a quality business has evolved.

1:07:01 - Why he’s skeptical about Cathie Wood’s ARK portfolio.

1:09:02 - Why hot tech stocks like Nvidia are likely to disappoint for many years.

1:11:32 - Why he’s wary of hype & “puffery” about Tesla’s glorious future.

1:17:49 - Why he’s trimmed great but pricey holdings like Costco & Nike.

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.
Chris Bloomstran’s firm Semper Augustus Investments Group
“Extraordinary Popular Delusions & The Madness of Crowds” by Charles Mackay
“The Rise & Fall of American Growth” by Robert Gordon
William Green’s book, “Richer, Wiser, Happier” – read the reviews of this book
Listen to Stig Brodersen’s April 2023 interview with Chris Bloomstran, or watch the video.
Follow Chris Bloomstran on X (AKA Twitter)
Follow William Green on X (AKA Twitter)

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