Stocks in Translation Master this one skill to build long-term wealth
Jun 3, 2025
Cole Smead, CEO and Portfolio Manager at Smead Capital Management, explores the art of long-term value investing with a focus on capital discipline. He discusses the challenges of successful investing in today’s volatile market and draws parallels to Warren Buffett. Smead believes in strategic investment choices, emphasizing agility in capital allocation. The conversation also touches on the implications of America's debt, market dynamics between stocks and bonds, and innovative investment strategies inspired by baseball tactics.
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Scarcity of Successful Investors
- Only about 20% of people are good long-term successful investors due to temperament and discipline.
- Scarcity of disciplined investors is necessary for profitability in investing.
Capital Allocation Priorities
- Prioritize investing in internal projects with high returns before buybacks or acquisitions.
- Consider dividends as a last option since they are liabilities and obligations to shareholders.
Prefer Special Over Regular Dividends
- Avoid companies with consistently high dividends as it creates fixed liabilities.
- Special dividends, like those from U-Haul, are preferable since they are not recurring obligations.
