Warren Buffett's favorite book:

Securities Analysis by Ben Graham

Here are the most powerful lessons every investor should know: 1. Investing versus speculating

Investors make decisions based on the facts and value of the asset.

Speculators make decisions based on other participants' behaviors.

Know the difference:

10 handcrafted visuals by @safalniveshak every investor should see:

1. Stock Selection Framework @safalniveshak 2. Business Quality Growth Matrix

If you pick stocks, you MUST learn how to analyze a cash flow statement.

Here's how to do it in less than 2 minutes: The Cash Flow Statement shows how cash moves in and out of a company over a period of time.

Its purpose is to track cash movement through a business.

How to analyze an income statement in less than 2 minutes: The income sheet is one of the three major financial statements.

It shows a company’s:
▪️Revenue (Sales)
▪️Expenditures (Costs / Expenses)
▪️Net Income (Earnings, Profits)

Over a period of time.

Investing cheat code:

Steal ideas from the best investors.

Here's how to track what the top fund managers are buying and selling (for free): US Fund managers with >$100 million in assets must report their holdings quarterly to the SEC by filing a 13F.

Tracking these using the SEC is a pain, but @Finchat makes it easy

Here's how to find Warren Buffett's (Berkshire Hathaway) latest buys

Capitalism is brutal.

If you invest, you MUST know how to identify a moat.

Here are 9 financial “rules of thumb” that Warren Buffett uses to tell if a company has one: 1: Gross Margin

Found: Income Statement

Formula: Gross Profit / Revenue

Moat: Consistently above 40%

No Moat: Under 40% & volatile

Peter Lynch LOVED the PEG ratio.

It used to be a great metric.

Now, it SUCKS.

Here’s why it became a USELESS number: Assume you’re considering investing in one of three companies.

Which is the better buy?

Tom Engle has lived off of his portfolio for 40 years (!!!)

How? He's an incredible investor with a BRILLIANT cash management strategy.

Here's exactly how it works (step by step): Let's say Tom's portfolio is worth $100,000 in the middle of a bull market.

Tom is happy with this number and wants to protect it.

He mentally calls this $100,000 his "protected value."

All his cash management decisions are based on this number.

"Everyone is trying to be smart, I'm just trying NOT to be stupid."

- Charlie Munger

Here are the 10 MOST COMMON investing mistakes to avoid like the plague (visually): 1. Short-term focus

New investors are fooled by market randomness.

Stock UP? “I’m a genius.”
Stock DOWN? “Investing is impossible.”

Experienced investors know that returns are measured in YEARS, not DAYS

I've been investing for 21 years.

Here are 21 lessons I've had to learn the hard way.

1/ You’re going to be wrong. A lot. 2/ Consistently avoiding ruin is the most underrated financial skill.

3/ The desire to hold a loser until you “break even” is incredibly strong.

4/ When prices are rising, investors wish for a bear market. When a bear market appears, investors wish for it to end.

10 powerful visuals every investor should memorize:

1: Dollar-cost averaging makes market timing irrelevant. 2: Cash is short-term safe but long-term risky.

Stocks are short-term risky but long-term safe.

Revenue and income are NOT the same things

Costs and expenses are NOT the same things

Net income and free cash flow are NOT the same things

Confused? Let me break it down for you: Sales and revenue mean the same things.

Both are the money that comes in from customer payments.

They both refer to the “top line” of the income statement.

The P/E ratio SUCKS.

It’s a flawed metric that deceives investors.

Here's exactly why the P/E ratio can be INCREDIBLY misleading (and what to use instead): The P/E ratio's flaw is that the "earnings” can be misleading.

If “earnings” aren’t sustainable, or are artificially inflated/depressed, the P/E ratio will be wrong.

Here's all the reasons why that can happen...

"Margin of Safety" by Seth Klarman is an incredible investing book.

But a used copy costs $1,200!

Here are 26 short investing lessons from this classic book (for free): 1: Markets are volatile. Never invest unless you are sure a "margin of safety" exists.

2: Focus on the intrinsic value of an investment. Only act when there's a meaningful difference between value and price.

The Rule of 72 is the MOST IMPORTANT "mental math trick" for investors to know.

Here's how it works: Humans tend to think *linearly*.

When we see a curve, we mentally approximate it by a straight line.

This helps us cope with changes in the world around us.

WACC Cheat Sheet

What is the Weighted Average Cost of Capital?

Here's a quick primer: WACC is the average after-tax expense of capital for a company from all of its sources.

This includes common stock, preferred stock, bonds, and other hybrid debt & equity instruments.

WACC is the mean rate a company pays to fund its operations.

If you pick stocks, you MUST learn how to analyze a cash flow statement.

Here's how to do it in less than 2 minutes: The Cash Flow Statement shows how cash moves in and out of a company over a period of time.

Its purpose is to track cash movement through a business.

How to analyze a Balance Sheet in less than 2 minutes: The balance sheet is one of the three major financial statements.

It shows a company’s:
▪️Assets: What it owns
▪️Liabilities: What it owes
▪️Shareholders Equity: It's net worth

At a fixed point in time

Warren Buffett's favorite way to measure profit isn't Net Income or Free Cash Flow.

It's Owner's Earnings.

What is it? How to does it work?

In this thread, I'll walk you through the calculation: Imagine that you're opening a coffee shop.

You spend $100k on furniture & fixtures that will last 10 years.
You spend $60k on coffee equipment that will last 3 years.

Here are your total annual operating costs:

If you invest, you MUST understand accounting.

This thread will walk you through the Income Statements, visually: An Income Statement is a *record* of how much money a business made (or lost) during a particular period of time -- eg, a quarter or a year.

The formula is: Revenues - Costs = Profits

Here's an example using Starbucks's income statement:

Tangible vs Intangible Assets.

What's the difference?

Here's everything you need to know: They confused me until I discovered an easy way to distinguish them:

𝗧𝗮𝗻𝗴𝗶𝗯𝗹𝗲 𝗔𝘀𝘀𝗲𝘁𝘀 𝗖𝗮𝗻 𝗕𝗲 𝗧𝗼𝘂𝗰𝗵𝗲𝗱

𝗜𝗻𝘁𝗮𝗻𝗴𝗶𝗯𝗹𝗲 𝗔𝘀𝘀𝗲𝘁𝘀 𝗖𝗮𝗻'𝘁