🏰 13 Lessons from Warren Buffett
How to be a great investor
It’s #QualityTuesday!
In this series, I’ll teach you 5 things about the stock market in less than 5 minutes.
1️⃣ 13 Lessons from Warren Buffett
The main advantage you have? Your circle of competence.
Only invest in things you understand.
Here are 13 investment lessons from Warren Buffett:
2️⃣ How to Select Stocks
You know how to select stocks?
Use a very rational stock selection framework.
I created a free e-book teaching you everything you need to know.
3️⃣ One simple investment quote
How to lead a successful life? Avoid stupidity.
You don’t need to be a genius to win. You just need to not be dumb for too long.
If you combine this with patience, magical things will happen:
4️⃣ Happy Investor
Francois Rochon is a quality investor I admire.
We already interviewed him with Compounding Quality. You can read the interview here.
He once said the following:
High confidence + Humble approach = Happy investorIf you read one thing today, please make it this amazing article.
It contains several crucial rules to be successful as an investor:
5️⃣ Stock Pitch: Sanlorenzo ($SL)
How does the company make money?
Sanlorenzo makes money by designing and selling custom-made luxury yachts to ultra-wealthy clients. They also offer maintenance, refits, and other premium services to keep earning money after the sale.Sanlorenzo ($SL) is the Ferrari of the sea.
It designs and sells custom-made luxury yachts to ultra-wealthy clients representing craftsmanship and prestige.
Today, Sanlorenzo combines Quality and Value.
They trade at just 11.4x forward earnings. This is very rare for a luxury leader.
And guess what? The CEO Massimo Perotti keeps buying shares. He already owns over 55% (!) of the company.
Since he took over in 2005, revenue has grown 15% per year with strong margins.
Everything in life compounds
Pieter (Compounding Quality)
PS You are not a Partner of Compounding Quality yet? Discover everything you need to know here.
Book
Order your copy of The Art of Quality Investing here
Used sources
Interactive Brokers: Portfolio data and executing all transactions
Fiscal.ai: Financial data
NVR (The King)
Most of the Time :
GPA > ROIC > ROA > GPM > NPM > 2.5×Clean Cost of Invested Capital
.
NVIDIA (The Queen)
Only during AI Boom :
GPA > ROIC > GPM > ROA > NPM > 2.5×Clean Cost of Invested Capital
.
The difference Between The King & The Queen :
The King (NVR) : ROA > GPM (rare for most of the stocks)
The Queen (NVIDIA) : ROA < GPM (usual for most of the stocks)
.
The Commons Between The King & The Queen :
ROIC > GPM (rare for most of the stocks)
ROA > NPM (common for most of the stocks)
GPM > 1.5×NPM
Double Digits in GPA, ROIC & ROA.
Double Digits in GPM & NPM.
Buffett’s long history delivers a trove of content. You present yours really well.