407- FROM THE VAULT: Speculating vs. Investing

02/21/23 • 44 min

Before buying a company, Rule #1 Investors do a ton of research to ensure the company they are buying meets Charlie Munger’s 4 key principles: meaning, moat, management, and margin of safety.

From blue chip companies to venture capital, the options are limitless in terms of what modern investors can do with their money. In this week’s episode, we discuss the difference between investing and speculating, and why the term “risky investing” is an oxymoron.

Learn what to watch out for when trying avoid overly risky investments with your own copy of the Must Have Investing Checklist: https://bit.ly/3YRI90n

Topics discussed:

Charlie Munger's 4 Principles

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Before buying a company, Rule #1 Investors do a ton of research to ensure the company they are buying meets Charlie Munger’s 4 key principles: meaning, moat, management, and margin of safety.

Learn what to watch out for when trying avoid overly risky investments with your own copy of the Must Have Investing Checklist: https://bit.ly/3YRI90n

Topics discussed:

Charlie Munger's 4 Principles

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Previous Episode

406- FROM THE VAULT: Bill Ackman’s Investing Checklist Part 3

William Albert Ackman is an American investor and hedge fund manager. He has a well-known 8-point investing checklist, which is straightforward and reflects the basic principles of Rule #1 Investing.

That checklist includes only investing in simple and predictable businesses with a dominant market position, limited risk, a strong balance sheet, excellent management, high return on capital, free cash flow generative, and large barriers to entry.

Sound familiar?

There’s a lot of talk in the financial community about “diversification,” which simply means investing your money in a variety of ways in order to provide a safety net should one investment go south. The thing is, you don’t need to diversify if you know how to invest and understand what you are investing in.

By taking the time to research and learn about the companies you are investing in, you are providing your own safety net, because you won’t invest in any company that doesn’t meet the standards for a wonderful company, as it is defined in Rule #1 Investing. That is key.

This week on InvestED, Phil and Danielle discuss Bill Ackman’s checklist more in-depth, and explain why you can’t blindly put your money in stocks chosen at random and expect to achieve great returns.

In order to succeed investing in the stock market, you have to use a system and a strategy. Learn how to find and pick quality stocks with this FREE Four Ms Guide: https://bit.ly/3krSdvB

Topics discussed:

Bill Ackman
Valuation methods of investing
Rational investing
Tesla stock
Coca-Cola stock

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Next Episode

408- Investing is Life

How often are you inspired to invest when you come across a great idea or innovation in your day-to-day life? Could that new helpful device lead you to the next great company for your portfolio?

With the sheer quantity of information that’s available to investors in the digital age, being able to sort the signal from the noise is a must.

This week on InvestED, Phil and Danielle discuss how viewing life through an investing lens can shape our experiences when we encounter something new.

For help picking winning investments and avoiding risky stocks, get your free copy of our Must Have Investing Checklist: https://bit.ly/3IZucI9

Topics Discussed: