20 Lessons from Seth Klarman's "Margin of Safety" (thread)

1) Get your mindset right before you invest

2) Don’t seek Mr. market’s advice - prices are not always right

3) Stock prices vs business reality — there’s a difference
4) Price vs. value - understand the difference

5) Emotions play havoc on investing

6) Play the long game

7) Study market cycles
8) Understand why big investors underperform — they are not paid for results, but for AUM. A fatter wallet makes investing HARDER. They focus on short-term

9) Avoiding losses is more important than upside

10) Volatility does not equal risk
11) Consistent returns are superior to volatile returns

12) Prepare for the worst - hope for the best

13) Focus on the process — NOT the outcome. Systems > goals.
14) Be patient. Wait for the fat pitch.

15) Valuation is hard — insist on a margin of safety

16) Bottoms up — focus on business, not macro
17) Focus on absolute returns — not relative returns

18) Don’t overpay for growth

19) Be conservative in your assumptions

20) Follow 80% 20% rule. Don’t over research. You can’t know everything.
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More from @BrianFeroldi

14 Oct
History of S&P 500 (thread)

1860: Henry Poor founds Poor's Publishing - focused on railroad industry

1906: Standard Statistics Bureau founded - focused on rating mortgage bonds

1926: Standard Statistics launches 90-stock index
1941: Poor's Publishing & Standard Statistics Merge - form Standard & Poor's

1957: Index expanded to 500 companies. Renamed S&P 500 - first computer-generated stock index

1966: McGraw-Hill acquires S&P
1973: $WFC & $BAC launch Institutional funds that track the S&P 500

1976: Vanguard launches S&P 500 mutual fund for retail investors

1982: Index closes above 100 first time
Read 6 tweets
8 Oct
What investing advice would you give to your younger self?

The wisdom of the crowd:

@InvestmentTalkk - Learn Basic Accounting

@AneliCaroline - There is no free lunch. If a stock or bond is cheap, there is a reason for that.

👇👇👇👇👇👇👇👇
@Triggs1Martin - Get started now!

@MP_Fitzgerald - Penny stocks are penny stocks for a reason, and it’s usually never a good reason.

@MikeCincoSays - You shouldn't sell a stock just because it doubled or even tripled.

@tylerpolley11 - Invest, don’t trade.
@Ebrahim_AlTheeb - Buy great companies and hold as long as possible!

@therobertleonar - Log out of your brokerage account and don't log back in for a long time.

@CJCarr_17 - Don’t listen to your buddy.
Read 8 tweets
27 Sep
A brief history of $GOOG

1995: Larry Page & Sergey Brin meet at Stanford
1996: Build search engine called 'Backrub' in dorm room
1997: Change name to Google, misspelling "googol"
1998: Move into Susan Wojcicki's garage
1998: Sun co-founder Andy Bechtolsheim invests $100k
1999: Raise $25 MM from Kleiner Perkins / Sequoia
2000: Launch AdWords
2000: Default search engine for Yahoo!
2001: Hire Eric Schmidt as CEO
2002: Launch Google News
2004: IPO at $85, raise $1.67 BB
2004: $25 billion market cap
2004: Move into Googleplex
2004: Launch Gmail
2005: Launch Google Earth
2005: $100 BB market cap
2005: Launch Google Maps
2006: Acquire YouTube for $1.65 BB
2006: Launch Google Docs
2007: Acquire DoubleClick for $3.1 BB
2007: Launch AdSense for Mobile
2008: Launch Chrome
2009: Launch Waymo
Read 8 tweets
25 Sep
I love the transparency of @themotleyfool

All Fool.com employees & contractors are required to disclose their holdings

How to find them:

1) Enter name & "fool profile" in search engine

2) Click on link that starts boards.fool.com

More: ⬇️⬇️⬇️⬇️⬇️⬇️⬇️ Image
3) Click on "info" and scroll down to "stocks I own"

That's it! Image
4) It's helpful to know the user name

Here are some you might want:

David Garnder: TMFSpiffyPop
Tom Gardner: TMFTomGardner
Tom Engle: TMF1000
Ron Gross: TMF144
Abi Malin: TMFamalin
Rick Murarriz: TMFBreakerRick
Jim Gillies: TMFCanuck
Brian Stoffel: TMFCheesehead
Read 8 tweets
25 Sep
The 5 "Technical Analysis" Charts I use every day

⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️⬇️
1) 5-Year Performance vs. $SPY

Winners keep on winning

It's a great sign if a stock has beaten the market over the last 5 years

It's a warning sign if it has lost badly

$MKTX ✅
$MNKD 🚫
2) Long-term Revenue Growth

Recurring revenue is the gift that keeps on giving

Consistent revenue growth -- especially through recessions -- indicates greatness

Inconsistent revenue growth = avoid

$MA ✅
$XOM 🚫
Read 7 tweets
23 Sep
How to build positions at "better and better value points"

Let say I wanted to build a position in $MA from scratch

Here's my step by step process

1) Enter ticker into Yahoo Finance and click on "statistics"

More: 👇👇👇👇👇👇👇👇👇👇
2) Open up the "Buy/Sell" tab on my spreadsheet

docs.google.com/spreadsheets/d…
3) Let's say I want to build in $1,000 increments

$MA current price is $335.31

So $1,000 is 3 shares

I start by buying my first traunch immediately
Read 11 tweets

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