Thoughts on Ted Weschler’s Largest Holding and Excellent Long Term Results

Posted on 8 CommentsPosted in General Thoughts, Investment Philosophy, Superinvestors, Think Differently

“I found that the entire fund industry worked a certain way, and that their results reflected the mediocre way in which they operated.” – Mohnish Pabrai, recalling an important discovery he made at the outset of his investment career I’ve mentioned before that I keep a list of investors who I’ve studied that have achieved long term returns (over a decade or preferably longer) of 20-30%+ annual returns. It’s a relatively small list, but it is larger than you might […]

An Exercise on Thinking Differently and a Great Business

Posted on 15 CommentsPosted in Case Studies, Investment Ideas & Company Research, Think Differently

I came across an excellent presentation that I wanted to share because it sparked some thoughts. It is not about a current—or even prospective—investment, but one that exemplifies the art of thinking differently. I spend a fair amount of time reading annual reports about businesses that I have no intention of owning. Typically, these businesses are high quality companies that—although maybe too expensive to offer attractive investor returns—are great entities to study and learn about. Studying businesses that have a […]

Thoughts on Value and Growth

Posted on 4 CommentsPosted in General Thoughts, Investment Philosophy, Think Differently, Warren Buffett

I wrote a few posts on “quality” recently, which has sparked a few emails, comments, and questions on the overall investment philosophy. I got to thinking about the interplay between quality and valuation, and thought of Buffett’s shareholder letter in the early 1990’s where he said “value and growth are joined at the hip”. Essentially, value is determined by what you return on your initial investment. This is fairly obvious, but I thought I’d point this out… This “investor return” […]

A Few Thoughts on Buffett and Great Banks

Posted on 10 CommentsPosted in Case Studies, General Thoughts, Industry-Banks, Superinvestors, Think Differently, Warren Buffett

I wrote a post about screening for quality bank stocks and another one here about Wells Fargo vs Cheap Community Banks and thought I’d post on some other comments I have here. Some of these thought might sound contradictory (everyone wants to separate stocks into categories based on quality/earnings and cheapness/assets). It’s not black and white, and all we’re really trying to do is figure out what something is worth and pay less for it. As Alice Schroeder has said, […]

Wells Fargo vs. Small Community Banks

Posted on 12 CommentsPosted in Case Studies, General Thoughts, Industry-Banks, Investment Ideas & Company Research, Think Differently, Warren Buffett

Charlie Munger once said that he compares every possible investment to Wells Fargo… Why buy company X if it’s not as good/cheap as WFC?  For weeks I’ve been slowly and steadily working my way through hundreds of small community bank stock filings looking for bargains. A good friend of mine lately has been the trusty old FDIC website where you can find current/historical financials on banks to your heart’s content… But after a few more hours of sifting through Call Reports […]

Value Investing: Luck vs Skill Part 2

Posted on 13 CommentsPosted in Investment Philosophy, Superinvestors, Think Differently, Walter Schloss, Warren Buffett

Earlier this week I responded to a comment that centered around the role of luck in long term outperformance. Feel free to read my response to the comment in Part 1 of this post where I list the #1 main reason why most people don’t replicate the results of Walter Schloss. It’s a very simple reason demonstrated by the results of Schloss himself. Today, I’ll discuss luck in Part 2 of this post. Does Luck Play a Role in Great […]

Value Investing: Luck vs Skill Part 1

Posted on 11 CommentsPosted in General Thoughts, Think Differently, Warren Buffett

I received this interesting comment from a reader and thought I might write a post or two on this topic: “…There is one very important writer/thinker you do not mention in your site but whom you might want to pay attention to–the Nobel prize winner Daniel Kahneman. After reading him, you will recognize and appreciate the role of luck, the unpredictability of stocks/markets, and that very few people, if any, can beat the market over the long term. Sure you […]

Thinking Differently: The Most Important Contrarian Behavior

Posted on 9 CommentsPosted in Case Studies, General Thoughts, How to Improve Results, Investment Philosophy, Superinvestors, Think Differently, Warren Buffett

“I skate to where the puck is going to be, not where it has been.”  – Wayne Gretzky One of the most important skills that you can develop as an investor is the ability to think differently. This is a broad topic with many interpretations. I often talk about thinking differently here at BHI. When it comes to general philosophy or “investment theory” (as opposed to thinking about individual stock investments), I spend more time thinking about this topic than […]

Buffett vs Munger vs Schloss and Thoughts on Portfolio Strategy

Posted on 34 CommentsPosted in How to Improve Results, Investment Philosophy, Portfolio Management, Superinvestors, Think Differently, Walter Schloss, Warren Buffett

I was having a conversation about Munger’s philosophy vs Schloss’ philosophy and had a few thoughts (and below I’ll compare their performance results against Buffett’s)… I often like to look at long term past performance of investors (10 years or longer) to draw conclusions about the effectiveness of their investment approach. I’ve often discussed on this site the many value investors out there with average returns. I used to ask myself ‘how can their returns be average when they clearly […]

Mohnish Pabrai-Another Good Lecture

Posted on 1 CommentPosted in Mohnish Pabrai, Superinvestors, Think Differently

A couple weeks back I wrote some notes I took from a lecture that Mohnish Pabrai gave at Columbia University. I highly recommend checking out the video of that lecture. In my opinion, it was the best lecture that I’ve heard from Pabrai, and he’s had some very good ones. This week I noticed a post on Value Walk linking to another lecture that Pabrai gave at the India School of Business. I listened to the three part lecture yesterday and […]