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Become a Better Investor Newsletter – 4 November 2023

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Noteworthy this week

  • Fed removes recession from its forecast
  • Japan’s fighting fire with gasoline?
  • China FDIs see new lows
  • We(DO NOT)Work
  • Trust in media reaches new low

Fed removes recession from its forecast: The FOMC meeting concluded to maintain the target rate in the current range, indicating that rates may have peaked. Fed reaffirmed there won’t be any recession.

Japan’s fighting fire with gasoline?: Japan to approve US$110bn stimulus package to fight inflation. It’s probably not the best cause of action if it’s to fight inflation. However, it might be needed to fight demographic challenges.

China FDIs see new lows: Geopolitical tensions have reduced foreign direct investments in China. The geopolitical tensions are also a reason that Chinese stocks could continue to perform poorly even if the Chinese economy rebounds.

We(DO NOT)Work: WeWork files for bankruptcy and is now valued at $58m compared to its peak valuation of US$47bn in January 2019.

Trust in media reaches new low: Maybe not an unexpected finding. It’s healthy to have a skeptical mind and be an independent thinker. But it’s also of great concern when it gets harder and harder to find reliable sources of unbiased news.

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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

“Please find the above performance chart of the 5 stock strategies and 1 asset allocation strategy you have access to in the community.”

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Podcasts we listened to this week

Acquired – Charlie Munger

“We sit down with the legendary Charlie Munger in the only dedicated longform podcast interview that he has done in his 99 years on Earth. We’ve gotten to have some special conversations on Acquired over the years, but this one truly takes the cake. Over dinner at his Los Angeles home, Charlie reflected with us on his own career and his nearly 50-year partnership at Berkshire Hathaway with Warren Buffett.”

Listen to the episode.

Readings this week

Total Shareholder Return

“Expectations about a company’s future free cash flow should, in theory, determine the value of its stock. You can think of total shareholder return (TSR) over a period as the change in the stock price, reflecting revisions in expectations from the beginning to the end of the period, plus any cash the company paid to equity holders.”

Get the PDF.

Book recommendation

Harvard Business Review Family Business Handbook

“Though ‘family business’ may sound like it refers only to mom-and-pop shops, businesses owned by families are among the most significant and numerous in the world. But surprisingly few resources exist to help navigate the unique challenges you face when you share the executive suite, financial statements, and holidays. How do you make the right decisions, critical to the long-term survival of any business, with the added challenge of having to do so within the context of a family?”

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

Ep745: Harley Bassman – Sizing Is More Important Than Entry Level

BIO: Harley Bassman is an industry thought leader and commentator on macroeconomic issues spanning decades.

STORY: In 2019, Harley bought some calls and sold some puts on Citibank stock for a cost strategy. He believed the stocks would increase because all its peers were trading above their book value. When COVID came, the stocks went south, causing Harley to make his biggest loss ever.

LEARNING: When something trades well below what you think its value is, consider why that’s the case. Size the investment.

Access the episode’s show notes and resources

Ep744: Mike Philbrick – Just Because You’re Winning Doesn’t Mean You’re Smart

BIO: Mike Philbrick is the CEO of ReSolve Asset Management. He has over 30 years of experience in investment management, serving in senior investment industry positions with several major financial services firms, and is responsible for investment decisions, coaching, and strategic leadership.

STORY: Mike learned of a mining stock at the urinal. He invested, and the stock performed well because the mining industry was on fire. And so encouraged by early success and massive ignorance, Mike wiped all of those gains in no time.

LEARNING: Don’t over-leverage. Understand what kind of investor you are. Ensure you have some protection before you go all-in in an investment.

Access the episode’s show notes and resources

Ep743: Sam Burns – Understand What You’re Really Betting On

BIO: Sam Burns is Chief Investment Strategist at Mill Street Research, an independent investment research firm based near Boston, MA. For 25 years, he has focused on global asset allocation and quantitative stock selection, primarily for institutional investors.

STORY: Sam decided to short-sell options that went horribly wrong after the Russian default. Even though he knew how options work in principle and that he could lose money, Sam didn’t have a plan for what if some geopolitical event happened, causing the market to fall suddenly. And so he lost a whole lot of money in the trade.

LEARNING: Understand what you’re really betting on. Every option trade is about volatility. Have a plan for what could go wrong and what you’ll do about it before you look at the headline to see what’s happening.

Access the episode’s show notes and resources

Published on Become a Better Investor this week

In this episode, Bill Bellows and host Andrew Stotz talk about resource management in a non-traditional sense. Bill explains how managing the variation and integration in your product or service is just as important as increasing consistency and removing waste.

Listen to Resource Management: Awaken Your Inner Deming (Part 9)

Delta Electronics (Thailand) Public Company Limited (DELTA TB): Profitable Growth rank of 1 was same compared to the prior period’s 1st rank. This is World Class performance compared to 660 large Info Tech companies worldwide.

Read Delta Electronics (Thailand) – World Class Benchmarking

In October 2023, we published 14 new episodes of the My Worst Investment Ever podcast. Listen to all of them here.

Listen to My Worst Investment Ever October 2023

Yutong Bus Company Limited (600066 SH): Profitable Growth rank of 5 was up compared to the prior period’s 7th rank. This is average performance compared to 1,450 large Industrials companies worldwide.

Read Yutong Bus – World Class Benchmarking

Sankyo Company Limited (6417 JP): Profitable Growth rank of 1 was up compared to the prior period’s 4th rank. This is World Class performance compared to 960 large Cons. Disc. companies worldwide.

Read Sankyo – World Class Benchmarking

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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