Focused Compounding Ep 15. Q&A from Listeners: Part 3
In this episode, Andrew and Geoff answer questions that we asked on Twitter. The questions that were asked were:
1.Does capital gain tax affect your investing decision in terms of holding periods? Like if there is capital gain tax at all, will that affect how u invest in any way?
2.How valuable have you found the paying-member service level at data providers such as GuruFocus or Morningstar as a tool for initials checks on companies? What I mean is, when you first get interested in a company, is having access to long-term historical financial information a useful tool in getting a high-level sense of the business before diving deeper into the 10-K? Or are there other uses for this sort of data? For context, I consider reviewing the historical data in the 10-K an absolutely critical step in studying a business, but it is not simple to review that data and quickly get a sense of how margins and various components of a business have changed over time, and at times I wish I had access to a quick
3. What is your methodology for assessing management's honesty, operating ability, capital allocation skill, and incentives?
4.Why do investors consider low margin established brand companies as “good” while high margin tech or bio tech is risky and/or “bad”?
5.Could you give your thoughts on compounding through long-term investing vs. short-term trading? i.e. 20% annually over 30 years vs. 5% 100 times. What's the best way to turn a small amount of capital into a large amount of capital?
7.If “good” is stability then rent stabilized HUD housing leveled to the moon is “good”. So second Q. Why is the term good conflated with financial returns when discussing biz value? Bad biz can have good returns, but that isn’t a good biz
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Contact Andrew at:
Twitter: @Focusedcompound
Email: Andrew@pilotswmg.com
Contact Geoff at:
Twitter: @GeoffGannon
Email: gannononinvesting@gmail.com