Here’s a scenario: you’ve identified a potential investment, you’ve gone through the checklist and done your research, and you decide that you’ve found a deal that other people seem to be overlooking.  You pull the trigger to buy into this company, and then the stock price begins to decline and you begin to wonder if you’ve made a mistake.Knowing the difference between having confidence in your investing process and being arrogant or blindly confident in a position can allow investors to act on proven strategy as opposed to being driven by fear and emotion.  Having a long-term outlook and a diligent methodology is the way for capable value investors to find the deals and realize the returns that many others in the market get wrong.This week, Phil and Danielle tackle another constant issue for investors as they dig into when, how, and why you should (or shouldn’t) stick with a purchase that doesn’t seem to be panning out the way you’d suspected.For help finding businesses that you feel confident investing in, click here for the “3 Circles” Exercise Guide:  https://bit.ly/3LOexg2Topics Discussed: Patience and discipline in value investing The dangers of hubris and confirmation bias Informed assumptions vs speculation Resources Discussed:Berkshire Hathaway shareholder letter (2013) Learn more about your ad choices. Visit megaphone.fm/adchoices

Free cash flow can be a golden ticket in the hands of a company with the right leadership. They can use it to supercharge innovation, expand their reach, or reward shareholders with dividends or buybacks, and for value investors, it’s like spotting a diamond in the rough.After the growth and maintenance expenditures are accounted for, the way a company deploys its additional capital can signal the strength of management and the potential for future returns. As Buffett tells us in his recent letter, once you’ve got companies that check all of the boxes he’s looking for, this is the icing on the cake.Join Phil and Danielle as they continue their analysis of this year’s shareholder letter from Berkshire Hathaway, pulling out key takeaways that might’ve been overlooked by some readers.For help in crunching the numbers in your investment research process, click here to get your free Rule #1 Calculators for Investing Analysis: https://bit.ly/42dBHSnTopics Discussed: Individual values in investing Entrepreneurship See’s Candy Operating cash flow Growth/maintenance capital expenditure Rare companies Resources Discussed:Berkshire Hathaway shareholder letter Learn more about your ad choices. Visit megaphone.fm/adchoices

In this podcast, they dive into Berkshire Hathaway's shareholder letter, discussing Bertie Buffett's investing style. They explore the difference between flashy vs simple investing, the importance of research simplification, and the pitfalls of following pundits. With a focus on CEO letters and avoiding financial entertainment, they provide valuable insights for successful investing.

“Character reveals itself in adversity” is a saying that can not only apply to the human race and how our true nature shines through when faced with a challenge, but also one that can apply in the business world. Although brand loyalty can be a common trope in 21st century consumer culture, how does that sentiment hold up when the rubber meets the road?In these times of inflation, shrinkflation, and other types of -ations that we’ve yet to ascribe catchy names to, some brands are seeing once-loyal customers jump ship and look for better value as prices rise. While some brand relationships can’t stand the test of time, perhaps we can look to the long-lasting friendship and business partnership of Warren Buffett and Charlie Munger for inspiration.In this week’s episode, Phil and Danielle are back to talking from different continents (and dealing with the inherent technological mishaps of that setupt) as they discuss what constitutes a brand moat, and how strong that supposed moat can be in moments of economic instability.Think you know Warren Buffett as well as the people who’ve spent decades building Berkshire Hathaway with him? Take our Buffett quiz and find out for yourself: https://bit.ly/43qtOLzTopics Discussed: Jackson Hole, WY Heliskiing/snowboarding Unilever dumps Ben & Jerry’s Brand moats Buffett and Munger’s friendship Resources Discussed: Cambridge Long COVID study Berkshire Hathaway shareholder letter Learn more about your ad choices. Visit megaphone.fm/adchoices

In a vault episode from the early days of the podcast, explore the world of value investing in this as Phil and Danielle delve into the power of dividends. Discover how making well-researched, long-term investments can potentially amplify returns and provide a steady income stream. They discuss the strategy of reducing risk by 'getting your money off the table' through dividend-producing companies.But remember, while dividends offer stability and returns, they're not without their tradeoffs. We'll uncover the complexities of managing dividend-paying companies and navigating potential risks. Tune in to learn how to strike the balance between steady returns and prudent risk management in your value investment journey.Keep in mind the Rule #1 that’s the namesake of Phil’s company: “don’t lose money.” Click here for a deeper examination of that rule that’s helped so many value investors over the years: https://bit.ly/43jTNErTopics Discussed: Weather Matrix Ben Graham’s Margin of Safety RULERS Compound return Free cash flow (FCF) Maintenance capex Resources Discussed: Berkshire Hathaway shareholder letter Email us your questions! Learn more about your ad choices. Visit megaphone.fm/adchoices

"Invert, always invert" — Charlie MungerTo become a top-notch Rule #1 investor, having a well-defined investing strategy is essential. It starts with crafting a compelling narrative for the company you're eyeing and understanding why it's a stellar investment. But here's the twist: flip that narrative on its head and scrutinize the opposing viewpoint.Challenge yourself to construct a case against the investment. If you can't, it's a sign that you might lack comprehensive knowledge about the company. When applying inversions to business acquisitions, consider formulating a robust inversion for every reason supporting the purchase.Familiarize yourself with every argument against buying the company, surpassing even the short sellers' insights. Develop compelling rebuttals for each inversion, effectively nullifying them and proving the short sellers wrong!Join Phil & Danielle in this throwback episode as they delve into the significance of inversion and highlight four essential aspects to contemplate when integrating it into your investing strategy. Click here for your copy of The Four Ms for Successful Investing: https://bit.ly/3LhVUARTopics Discussed: How to create a story Why you should always invert How to invert to own a business Four key points of inversions Relating to Chipotle and Gamestop Learn more about your ad choices. Visit megaphone.fm/adchoices

The podcast discusses the importance of patience and decision-making in value investing. Topics include compounding wealth, owner earnings, durable competitive advantage, and inverting investments for analytical advantage. The episode also covers the impact of global weather events on investments and the effectiveness of concise pitch decks. A lighthearted discussion on creating a priority list adds a playful touch to the episode.

Explore the concept of the 'Weather Matrix' in investing, focusing on understanding value vs. price ratio. Learn about the importance of 'Circle of Competence' to avoid getting overwhelmed. Analyze the evolution of streaming companies like Netflix and the challenges they face in profitability. Dive into the research process of evaluating CEOs and industry 'weather' before making investment decisions.

The podcast discusses Buffett's mistakes, the value of intrigue in investing, speed reading, toxic positivity, and stoicism. They also explore the Weather Matrix tool for evaluating potential investments and the importance of understanding the weather patterns in investments. Researching and reading about Burlington Northern Santa Fe, alternative methods of obtaining information, and the dangers of toxic positivity are also covered.

The 21st century has brought the world a number of revolutionary developments that have turned the world on its head, with one of the most important cultural shifts being the rise of the attention economy. With so many entities all vying for a piece of your time, how can you know when you’re spending too much of that limited resource on your investing research?With decades of investing experience and a bit of basic mathematics, Phil explains a tool to classify companies into four groups based on their price/value ratio and the investor’s understanding of the business. If you find yourself getting bogged down or stuck in the weeds on your investing journey, this method could be the thing you need to streamline your research.For more help calculating the ever-important metric of price vs value, get your free copy of Understanding Market Capitalizatin: https://bit.ly/44p1xE9Topics Discussed: How much effort is too much effort? Accumulation of knowledge Price/value discrepancies Being prepared to “weather the storm” How to capitalize on market downturns Importance of repetition Resources Discussed:The Weather matrix Learn more about your ad choices. Visit megaphone.fm/adchoices