I have finished this book last week, “The Education of A Value Investor” is a very honest and revealing account of Guy Spier’s transformation into a better investor as well as a more fulfilled individual. He speaks candidly about the lessons he learned along the way and gives the reader a detailed set of investing tools. More importantly, this book attempts to show how to apply specific Value Investing principles and lessons to your own life, whether it be investing related or not.
1. “decision theory” is highly recommended
2. part of what makes Warren himself so successful is that he’s never stopped seeking to improve himself and that he continues to be a learning machine.
3. value investors have to use inner scoreboard than outer scoreboard
4.I began constantly to ask myself one simple question: ” what would Warren himself do if he were in my shoes?”
5. would I succeed in turning all this theory into the elusive goal of long term, market-beating returns?
6. who is strong? He who masters his own passions.
7. We copy the best ideas and make them our own.
8. The book called “Power vs. Force: the hidden determinants of human behavior”. The author, explores the theory that we have a greater capacity to influence others when we’re an authentic version of ourselves since this truthfulness evokes a deep psychological response in others.
9. I was constantly striving to model Buffett’s way of thinking and investing.
10.these small actions make a major difference at the margin
11. “Charlie and I always knew we would become very wealthy,” Buffett told us “but we weren’t in a hurry.” After all, he said, “if you’re even a slightly above average investor who spends less than your earn, over a lifetime you cannot help but very wealthy – if you’re patient.”
12. the key idea that I learned is to think of the economy as a complex adaptive system.
13. He works in a less-than-glamorous office park in S Cal with no other financial institution nearby.
14. Learning to tap dance – a new sense of playfulness. Steve Jobs took a similar adventurous and playful approach to life. As he whimsically put it in his commencement speech at Stanford, “Stay foolish.” Likewise, Buffett treats the investment business as a game and does little that compromises his day-to-day happiness.
15. I’d started to play bridge around 2007,…, as a preparation for investing, bridge is truly the ultimate game.
16. Mohnish and I also set up a mastermind group of eight people, the Latticework Club, which meets every few months to share what’s going on in our lives and to support one another. This group has helped me to open up emotionally and to introspect in a more systematic way.
17. It is extremely important to develop a robust set of rules that will make our investment decisions smarter and less vulnerable to the distortions of our irrational brains: the rules that I developed encompassed a wide-range assortment of critical investment processes, including what I read (and in what order) when I’m researching stocks; whom I speak with (and refuse to speak with) about potential investments; how I deal with corporate management; how I communicate (and don’t) with my shareholders.
my rules are:
(1) stock checking the stock price frequently
(2) If someone tries to sell you something, don’t buy it
(3) Don’t talk to management
(4) Gather investment research in the right order
i. My routine is to start with the least biased and most objective sources – company’s public fillings, including annual report, 10K, 10Q, and proxy statement
ii. read less objective corporate documents – earning announcement, press releases, transcript of conference calls. Books about the company and founder.
iii. avoid reading any press coverage until after the corporate fillings
iv. Pay attention to the order in which you consume information.
(5) Discuss your investment ideas only with people who have no axe to grind
(6) Never buy or sell stocks when the market is open
(7) If a stock tumbles after you buy it, don’t sell it for two years
(8) Don’t talk about your current investments – the real problem is that it messes with my head due to the cause of human misjudgement (see Robert Cialdini’s book “influence: science and practice”) – remain neutral and understated, resisting the temptation to talk heated about why I think a stock is great. Instead, I provide a detailed postmotem on stocks that I’ve already sold.
18. An investor’s checklist is not a shopping list of the desirable attributes that we are looking for a business. Rather, the items on the checklists are designed to help them avoid mistakes that have previously led to painful loss. In investing, the real checklist is to serve as a survival tool, based on the haunting remembrance of the things past. **** I need to continue write my lessons learned and make them as my checklists. It is SUPPER IMPORTANT !! ******
checklist items: is this stock cheap enough (not just in relative terms)? Am i sure that I’m paying for the business as it is today – not for an excessively rosy expectation of where it might be in the future? Does this investment satisfy me psychologically by meeting some unmet personal need? For example, am I keen to buy it because it makes me feel smart?
19. Relationships are the killer app. “social capital”. The friendships become a wonderful end in themselves, not a mean to self-advancement. Read the book from Nicholas Christakis on social network.
20. My most successful hires have happened not because I advertised the position, but because I observed the person in candid moments like these, when they were simply being themselves.
21. this helps to explain why Buffett has drawn such remarkable people into his orbit: they provide a reflection of who he is. To repeat that all important line from Warren, “Hang out with people better than you, and you cannot help but improve.”
22. To give you just one example. I never try to solicit my friends (or anyone else) to invest in my fund. I am happy for them to be my friends. There is never any obligation.
23. Adversity may, in fact, be the best teacher of all. The only trouble is that it takes a long time to live through our mistakes and then learn from them, and it’s painful process.
24. The idea is for a close-knit group of about eight to ten professional to share their issues confidentially, guided by a peer moderator. Have a three-day retreat to discuss whatever in our minds. For me, meetings like these have been the single best accelerator of inner growth.
