Case Studies

Wells Fargo vs. Small Community Banks

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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 […]

How to Improve Results

Buffett vs Munger vs Schloss and Thoughts on Portfolio Strategy

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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 […]

General Thoughts

Idea Generation: Reading vs Screens

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I thought I’d write down some quick notes regarding my investment process today… This is a topic I write and think about a lot. Having a defined investment process is essential to staying focused and being able to methodically generate long term investment results. Buffett Reads, He Doesn’t Screen I read a lot about the Berkshire meeting last weekend, and I have a few friends that attended (I’m anxiously awaiting their first hand accounts). At the meeting, Buffett discussed how […]

How to Improve Results

Invert, Always Invert: Where do Investment Returns Come From?

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Yesterday I wrote a post that started with a quote that Charlie Munger has often used: “Invert, Always Invert.” The idea is to think differently than the crowd. Ben Graham said that our results are based on our methods, not whether the crowd agrees with us or not. However, the structure of the market is such that thinking in a contrarian way often leads us to areas that offer greater investment results. I believe that contrarianism is a necessary, but […]

Ben Graham

Invert, Always Invert: More on Thinking Differently

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“Invert, Always Invert.” -Carl Gustav Jacob Jacobi, 19th century mathematician, using the phrase to describe how he thought many problems in math could be solved by looking at the inverse. Charlie Munger often uses this same quote to express how investors can likewise benefit by looking at the inverse, or opposite, of what others are looking at.  Yesterday I wrote a post on Buffett and how he achieved 50% returns, and “guaranteed” that he could replicate those returns on a […]