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Learning that drives better investment decisions

Become a Better Investor Newsletter – 2 December 2023

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Noteworthy this week

  • One of the great has left us
  • Rules for thee but not for me
  • Elon says “f*ck them” to virtue signallers
  • China and Saudi Arabia trade a lot
  • Kyrgyzstan loves German vehicles

One of the great has left us: Charlie Munger passed away just a month shy of 100 years old. His wisdom will live a lot longer.

Rules for thee but not for me: 250 German government officials are flying first and business class to climate meeting. I bet there were attendants arriving by private yet.

Elon says “f*ck them” to virtue signallers: Elon Musk delivered a couple of F-bombs talking about virtue singnallers.

China and Saudi Arabia trade a lot: China does more trade with Saudi than both the US & EU combined.

Kyrgyzstan loves German vehicles: Or maybe not… Seems like Russian sanctions are working so so.

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Weekly market performance

Click here to see more markets and periods.

Chart of the week

Discussed in the Become a Better Investor Community this week

“We go live in 1 hour to discuss an interesting topic Tech-concentrated re-rating makes long-term US equity returns lower.”

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Podcasts we listened to this week

Algy’s Investment Podcast – Terry Smith

Listen to the episode on Apple or Spotify.

Readings this week

Writing to Think

“A few weeks ago, my 13-year-old son asked me why writing was so important. He wasn’t happy. One of his teachers had asked him to write an essay and he would rather use AI to generate it for him and be done with it.

The question seemed as natural to him as using a dishwasher is to us. If there is a better, more convenient way to do this, why not use it?”

Read the post.

Book recommendation

Expectations Investing: Reading Stock Prices for Better Returns by Michael J. Mauboussin

“Most investment books try to assess the attractiveness of a stock price by estimating the value of the company. Expectations Investing provides a powerful and insightful alternative to identifying gaps between price and value.”

Get the book on Audible or Kindle.

Audible is great; have you tried it? If not, click here to get 2 books for free.

Memes of the week

New My Worst Investment Ever episodes

Ep753: Therapong Vachirapong – You Need to Take Risk to Earn a Return

BIO: Therapong Vachirapong is a Managing Director and a Head of Equity Research at Phatra Securities PLC.

STORY: Therapong was a risk-averse investor who hardly took any risks. Therefore, he missed out on many investment returns and didn’t increase his returns. The only time he’d take a risk was buying stocks when the prices were very low and in most cases, these stocks never grew in value.

LEARNING: Avoid the maximum drawdown. You cannot increase your return without taking calculated risks. Have an investment style to avoid investing in everything.

Access the episode’s show notes and resources

Ep752: Carolyn McClanahan – You’ll Never Be Smart Enough to Beat the Market

BIO: Dr. Carolyn McClanahan is a physician turned financial planner. In addition to working in her financial planning practice, she speaks regularly on the interplay between health and financial issues, particularly regarding aging, chronic illness, end-of-life, long-term care, health care reform, and health care costs.

STORY: Carolyn lost a good chunk of her portfolio while doing active management.

LEARNING: There’s nobody out there who can be consistently smart to beat the market. Know your money goals. Be careful of overconfidence bias.

Access the episode’s show notes and resources

Published on Become a Better Investor this week

When we answer a question with “it depends” we are asking for more information about the possible variables that will inform the answer. In this episode, Bill Bellows and host Andrew Stotz discuss how, in the Deming world, “it depends” can trigger improvements in processes or products and services.

Listen to It Depends! Rethinking Improvements: Awaken Your Inner Deming (Part 10)

Yangzijiang Shipbuilding Holdings Limited (YZJ SP): Profitable Growth rank of 2 was up compared to the prior period’s 4th rank. This is World Class performance compared to 1,450 large Industrials companies worldwide.

Read Yangzijiang Shipbuilding Holdings – World Class Benchmarking

Cheil Worldwide Incorporated (030000 KS): Profitable Growth rank of 2 was up compared to the prior period’s 3rd rank. This is World Class performance compared to 260 large Comm. Serv. companies worldwide.

Read Cheil Worldwide – World Class Benchmarking

Huaming Power Equipment Company Limited (002270 SZ): Profitable Growth rank of 2 was same compared to the prior period’s 2nd rank. This is World Class performance compared to 1,220 medium Industrials companies worldwide.

Read Huaming Power Equipment – World Class Benchmarking

In this episode of Investment Strategy Made Simple (ISMS), Andrew gets into part two of his discussion with Larry Swedroe: Ignorance is Bliss. Today, they discuss two chapters of Larry’s book Investment Mistakes Even Smart Investors Make and How to Avoid Them. In this twelfth series, they discuss mistake number 22: Do You Confuse Great Companies with High-Return Investments? And mistake number 23: Do You Understand How the Price Paid Affects Returns?

Read ISMS 35: Larry Swedroe – Great Companies Are Not Always High-Return Investments

DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.

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