Archives for June 2022

My Advice to a Young Investor – Part 1

The Sketchbook of Wisdom: Did you get your copy?

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I met a 26-year-old investment analyst yesterday, who sought my single biggest advice to, well, a 26-year-old investment analyst, on what she should be doing to do well in her career as an analyst and an investor.

Despite being involved in this work for the past 11 years of offering advice even when I am not asked for, her question led me to think, and so I sought some time to get back to her with my response.

There are, after all, so many things I can advise to a young investor or analyst, based on what I have learned in the past 17 years, that is, since I was 26 myself –

Invest with an inner scorecard – Don’t change who you are to fit in.
Have courage, even in the face of adversity – and there are a lot of adversities you would face in investing.
Accept whatever outcome you attain, for what’s in your control is how you react to the outcome, and never the outcome itself – you can either rue over a bad outcome or take it as a lesson and move on.
Keep learning, for nothing builds an investor’s career better than continuous learning. Learn from your own experiences and mistakes but more importantly from the experiences and mistakes of others.
Avoid predictions, because you are rarely going to make a correct one. Also work with the intellectual humility that you know nothing, even if you are the smartest person around.
Be patient, like a grasshopper, for that is how wealth is created.

All this is very useful advice. But since I have to offer just one advice as requested by that young investment analyst, it would be something that I learned from Charlie Munger and Warren Buffett many years ago –

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[Transcript] The One Percent Show: William Green

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William Green is the author of Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life. Over the last quarter of a century, William has interviewed many of the world’s best investors, exploring in depth the question of what qualities and insights enable them to achieve enduring success. He has written extensively about investing for many publications and has been interviewed about the greatest investors for magazines, newspapers, podcasts, radio, and television. He has also given many talks about the lessons we can learn from the most successful investors, not only about how to invest but about how to improve our thinking.

Born and raised in London, William was educated at Eton College, studied English literature at Oxford University, and received a Masters degree from Columbia University’s Graduate School of Journalism.

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Learn to Pick Great Stocks with My Premium, Online Course in Value Investing – Mastermind

There are no secrets to the art of sensible stock picking that most people don’t know of. The literature has been there since the 1940s, when Ben Graham, the father of value investing, first wrote about it in his landmark book The Intelligent Investor.

Other practitioners of this art, like Warren Buffett, Charlie Munger, Seth Klarman, Walter Schloss, and Howard Marks have been writing about it for years now.

So, you can find hundreds and thousands of resources in print and on the Internet on how you can become a smart, successful investor. However, what I found lacking ever since I started learning this art of sensible stock picking myself, was a structured, step-by-step approach to do it.

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In Investing, Simple Beats Complex

The Sketchbook of Wisdom: A Hand-Crafted Manual on the Pursuit of Wealth and Good Life

In the endnotes of his brilliant book, Winning the Loser’s Game, Charles Ellis wrote about two of his best friends who, at the peak of their distinguished careers in medicine, agreed that the two most important discoveries in medical history were penicillin and washing hands (which stopped the spreading of infection from one mother to another via the midwives who delivered most babies before 1900).

Ellis’s friends also counseled him there was no better advice on how to live longer than to quit smoking and to buckle up when driving.

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