Hi Partner 👋
Today it’s time to add to Our Portfolio again.
We will add to 2 companies:
Company 1: Undervalued by 15% according to management
Company 2: Our Mini Berkshire Hathaway
A crazy statistic
The craziest statistic you’ll see today?
This one:
You could take away 99% of the returns of Warren Buffett…
And he would still have outperformed the market.
That’s the magic of compounding put to work.
We as human beings are not built to understand the magic of exponential growth.
It’s one of the most powerful things on earth.
You should invest in companies that create more and more shareholder value year after year.
A company like Berkshire.
But you have plenty more examples:
You only need one winner like this during your entire investing career to be really successful.
Here are 10 golden rules you can use:
Know what you own and why you own it. Do your homework before you buy. Buying without research is like playing poker without looking at your cards.
Understand the finances. The biggest losses come from weak balance sheets. Stick to profitable companies with healthy financials.
Use your everyday edge. You notice good businesses at work, in shops and in daily life, often before Wall Street does.
Buy quality, not hype. Skip hot stocks and the “next big thing.” Invest in great companies in boring industries with a durable competitive advantage.
Make ROIC your key metric. Return on invested capital shows how well management allocates capital. The higher, the better.
Think long term. In the short run, share prices and business results often diverge. Over time, the stock follows earnings: if profits grow 10x, the price will follow.
Let your winners run. Your downside on a stock is limited to what you invested, while your upside can be many times that.
Don’t overdiversify. Own only as many stocks as you can properly analyze and follow.
Treat market declines as opportunities. Keep some cash on the sidelines so you can buy when others panic.
Ignore macro forecasts and noise. Nobody can reliably predict interest rates, the economy or currencies.
You want even more rules?
Here are 20 golden investment rules from Peter Lynch:
Now let’s dive into the 2 Buys we are doing for Our Portfolio.
