Detailed
Compact
Art
Reverse
November 28, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, welcome to the Investing for Beginners podcast. This is episode 129 tonight. Andrew and I are going to go back to the well, and we’re going to answer a listener’s question. We got a great one the other day, and Andrew thought this would be a great conversation for us to have with you guys, so I’m going to go ahead and read the question, and then Andrew will take the first stab at it. All right, so here we go. I have been practicing using the VTI Excel sheet and pick Starbucks since they are a large company that has been around for a while and doesn’t seem to be going anywhere. When I input their numbers into the spreadsheet, it put on a VTI of 1428 I see. They have more way abilities than assets. Their dividend has decreased from last year, and their shareholder equity seems to be in a negative. Yet when I read articles online, they say it as a good buy. How do you reconcile these articles with the data we are receiving through the VTI process. Thank you, and love all the content. Andrew, what are your thoughts on this? Andrew:                              01:35                     Yeah, super good question. First off, and I think there’ll be a lot of fun to talk about Starbucks and take a deep dive into it. Just for kind of clarification for people who don’t know what the listener is talking about, we need to says VTI that stands for value trap indicator. It is a formula that I created and use on every stock I buy. And so basically it takes some of the financial numbers around the company and does some calculations and tells you generally whether it’s a good buy or not. So 1428, that’s a very high number in the range of VTI world. That’s definitely like in strong sell territory or at the very least, do not buy a territory. So I think you know it. It’s a great question and a great thing to think about. Because you have, you have on let, let’s start maybe with a disclaimer.
November 21, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the number, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 120 gig tonight. Andrew and I are going to talk about a couple of subjects that we have not talked a lot about or in some cases, not at all. If you are enjoying the show, please subscribe here. So we’re going to talk a little bit about taxes and a couple of tax vehicles that you could use to help save you some money on taxes. One of the vehicles we’re going to talk about is an HSA. And we’re also going to talk a little bit about a Roth IRA. So, Andrew, I know you’ve had some recent experience with an HSA, so why don’t you tell me your thoughts on that, and we could chat a little bit. Andrew:                              01:09                     Well, let’s chat less about my experiences with okay. Medical issues and expenses because that will piss me off. Yep. But you know, an HSA is something that a lot of people can take advantage of. And even if you think you can’t, I think maybe you can. So HSA, what is that? And you know, how can it help the average person? I think when you kind of look at the landscape of, particularly if you live in the United States and the way that our, the expenses and hospital bills and doctor bills and surgery bills and how it’s just through the roof and astronomical and it’s, you know, if you don’t have good insurance and even when you do have good insurance, a lot of times these, the healthcare system in America is just the way it’s structured has really made a lot of services. Be expensive. Andrew:                              02:12                     And you know, I, I remember reading a stat somewhere a while ago that said, one of the biggest causes of bankruptcy is medical debt. And it’s also one of the
November 14, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the number, your path to financial freedom starts now. Andrew:                              00:35                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 127 tonight, Andrew and I are going to take some listener question and answer them for you. If you are enjoying this show please subscribe for future shows. We’ve got some great questions recently, and so we thought we would read through those and do our a little back and forth and give and take. So Andrew, why don’t you go ahead and read us the first question. Andrew:                              00:57                     Sounds good. So this one’s from Stefan L. He says, I’ve been following your podcast and your newsletter for about two or three months now considering signing up for your Eli there, but first and they work out the best way to invest in the US market from abroad. He says, I live and work in Bulgaria. He says I’m interested in investing in the S and P 500 during the dollar-cost averaging with monthly installments of about $300; however, the options to buy an ETF from a local broker are terrible. They want to charge me 4% commission plus $2.20 per month plus bank transaction and currency exchange fees, which roughly amounts to six and a half to 7% given that the average growth ofS and P 500 is around 8% of the year, I can hardly make any money in the long run. Andrew:                              01:44                     Have another option to buy stocks slush funds through interactive brokers where I’ll costs amounts of two and a half to 3% however, based on the audiobooks that I’ve been listening to money mastering the...
November 7, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners, led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the number, your path to financial freedom starts now. Scott:                                    00:36                     All right folks, we’ll welcome to Investing for Beginners podcast. This is episode 126 tonight; we’re going to have some fun. We are going to interview an author, gentleman named Scott Chapman. He wrote this amazing, fantastic book called Empower your Investing, and we’re going to chat about this tonight. So without any further ado, I’m going to turn it over to Scott. Scott, why don’t you tell us a little bit about yourself? Scott:                                    01:00                     Well, thanks to Dave and Andrew, that’s a pleasure to join you tonight. A little bit of background about myself. I’m a professional portfolio manager. I founded my firm about six years ago called Chapman investment management. And this, this book that you mentioned in power, you’re investing. The subtitle is adopting best practices from Peter Lynch, John Templeton, and Warren buffet. This whole project started about 25 years ago and I had gone through and gotten my MBA in finance and had gone through the CFA or chartered financial analyst program, which is a three-year program with at that time, at one test given each year you have to pass those to be success with tests. Scott:                                    01:52                     And the pass rate was somewhere around the 30 or 40% range. Three years later, I had that certification, and in 1993 I was named the portfolio manager for our large-cap growth fund, which had a one-star rating by Morningstar, which was the lowest star rating they gave.
October 31, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:35                     All right folks, we’ll welcome to the Investing for Beginners podcast episode 125 tonight. Andrew and I are going to continue our ongoing discussion about the no commission news that hit the stock market last week, and we had some other additional thoughts that we wanted to share with you about a couple of different topics. So the first one we’re going to talk about is something that I broached with Andrew earlier this week, and we’ve talked a little bit about it off air and we thought this would be something that might be of interest to you guys and see if it was something that might help you with your investing. So the thought that I had was, how is this going to affect ETFs? And the reason why I thought that was because before when you would go on ally, for example, and buy an ETF, let’s say a VOO, which is an ETF that tracks the top of P E an S and P 500 has got 516 stocks, I believe. Dave:                                    01:38                     So it tracks the majority of the S and P plus a few extras. So what’s to stop you from doing something a little bit different? So in the past, when you buy this particular ETF on ally, you would pay four 95 for your trade like everybody did for any other stock. And then, during the year, the ETF would also charge you a fee to manage and operate the ETF for you. Now in this particular case, it’s a 0.3, so it’s quite small, but it’s; still, it’s money that is taken from your returns at the end of the year. And so my thought was, is now that you don’t have to pay that four 95, why would you pay for the commission on not the commission, but why would you pay the management fee on the ETF? And my thinking was is that you look at, when you look at an ETF, you can see a breakdown of what it is that they are holding in that ETF.
October 24, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the number, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, welcome to the Investing for Beginners podcast. This is episode 124 tonight, Andrew, and I thought we would take a break from Listener questions and maybe some of the other formats that we’ve talked about lately and talk a little bit about some current news. So for those of you out there living in a black hole of news, there was some big, big news in the stock market recently this week and there was some news that a lot of the online brokers have dropped to zero fees and Andrew and I wanted to talk a little bit about that. So Andrew, did you have some thoughts? I hear I hear you take it in. Take a breath. Andrew:                              01:19                     Somebody hold me back. Hold me back. Yeah, I think it’s like we’re watching history being made, right? And for somebody like me, I’m trying to encourage people to invest. Now. There’s no excuse. You had the emergence of Robin hood and what made Robin, what made everybody flock to Robinhood was the fact that you could trade, and there would be no commission fees. And this week just, it was like dominoes, and they just fell one after the other. So I logged into my ally account and saw this little message on the top that said, Hey, starting October nine, we are not charging commission fees anymore. Ally used to be a four 95 portray commission, and now it’s not. And then, you know, I think I think before that was what were we, what were we saying? I was like interactive brokers before that. Yup. Yup. They were one of the first ones. Goldman Sachs was I think those were one of the first two that, that went that route. And then like you said, the dominoes kind of started to fall. Schwab was the next really big one that kind of really shook up the investing world. And then soon after that followed Dave:                                &nb...
October 17, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to Investing for Beginners podcast, this is episode 123 tonight. Andrew and I are going to answer some of our listener questions. We’ve got some great ones recently, and we wanted to take a stab at answering them for you on the air. So I’m going to go ahead and read the first question and then Andrew and I will do our little thing. So our first question is, hi Andrew. I currently make over six figures,  and my wife stays at home with our 20-month-old twins. Wow. We have a few school loans left, roughly 15,000. I am still balling the payments as well as to pay off quicker. My question is, should I continue to dollar cost average and invest or take that amount and put it towards the loans? I also put a little bit aside for my paychecks for my daughters. I also have a 401k with my company. I get a fully vested 3% than 100% of my first 3% and 50% of the following 3%. So I don’t want to lose out on the free money. Does it make sense? I just turned 34 last week, as well. Thank you to you and Dave for all the advice constantly. Andrew, what are your thoughts? Andrew:                              01:46                     Hmm. So this kind of hits home a little bit because like I can relate with it and I think it’s something that more and more people who are a little, I’ll say like coming up, but you know, starting their careers, starting to look into investing. A lot of younger people have student loans. And so this is one of those things where, you know, not only are you trying to figure out, you know, how do I make a budget? And then it’s like, well, how does the stock market work? How does investing work? And then now it’s like, well, should I invest or should I pay off that? And there’s get millions of different answers. So let’s tackle that back half first. And I want to see what you think about the 401k to Dave. So basically, basically, I look at a 401k matches free money, and I think that takes priority over anything.
October 10, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners, led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the number, your path to financial freedom starts now. Dave:                                    00:35                     All right, folks, we’ll welcome to the Investing for Beginners podcast, episode 122 tonight we’re going to do part two of analyzing the growth of the stock. And one of the things that are going to be a theme tonight is appearances can be deceiving. Not all growth is equal, so you never know what you’re going to get until you get into it. So like Forrest Gump used to say, life has a box of chocolates; you never know what you’re going to get. So tonight I think, you know, worst you’re going to get, but Andrew and I are going to talk a little bit. So Andrew, once you go ahead and start us off and then we’ll chat a little bit. Andrew:                              01:11                     Yeah, sounds good. I’m excited to hear about the example that we talked about off air. I think that kind of ties it in nicely, and it’s, you know, we’ve been talking about growth and, you know, if you haven’t listened to the last episode, I would recommend doing that. But bottom line, you know, a business grows, a stock goes higher in the stock market because it’s able to grow earnings and profits over time. And so as an investor, there are so many different ways, and like a box of chocolates, I guess. There are different flavors of ways that you can try to reevaluate a stock’s growth. And what’s frustrating is there’s never one perfect way. And you know, one, if you have some indicator that you found this year that’s worked to help you pick stocks that grew, maybe that, that indicator doesn’t work next year. Andrew:                              02:06               ...
October 3, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:35                     All right folks, we’ll walk up to Investing for Beginners podcast. This is episode 121 tonight. Andrew and I are going to talk about Benjamin Graham and growth. Andrew has been on a bit of a Ben Graham kick lately. He’s been writing some great blog posts about some of the stuff that he’s been discovered in the intelligent investor as well as security analysis, and we thought this would be a perfect time for us to talk a little bit about growth and Ben Graham, we teased this a little bit a few weeks ago and tonight is the night, so Andrew, why don’t you go ahead and start us off and we can have our little conversation. Andrew:                              01:08                     Yeah, thanks, Dave. I think it’s always a good idea once you are established and you have a good base of knowledge when it comes to investing, and I think it’s good to reread stuff because now that you have a new context, you have a greater understanding. You can pick up things I didn’t pick up the first time. So you know, a few select books, whether that’s Benjamin Graham, obviously a huge, he’s an investing legend. Not only was he Warren Buffett’s mentor he taught Warren Buffett at Columbia. He also had his investment funds, and we return 17% per year. Quite a nicest performance. And I think it was over like 30 years. So not only was he a great teacher, but he also walked the walk and made some fantastic returns. And so his books his most popular one, the intelligent investor, that one’s probably one of the best selling investment books of all time. Andrew:                              02:08                &...
September 26, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step-by-step premium investment guidance for beginners led by Andrew Sather and Dave Ahern, to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:37                     All right folks, well welcome to Investing for Beginners podcast. This is episode 120 tonight Andrew and I are going to talk about about the dividend aristocrat list, and there were four new companies added in 2019, and we wanted to take a little brief overview of those four companies to kind of fill you in on some of the companies are added to that list. So for those of you who are not familiar with what a dividend aristocrat is, a dividend aristocrat is a company that has been paying a growing very key growing dividend for 25 years is listed in the s and p 500 and has met certain liquidity and market cap restrictions. And there are 57 companies I believe, that are considered dividend aristocrats right now. And there are also dividend kings, but where those are 50 years or more. But tonight we’re going to talk about dividend aristocrats. These are the more popular ones, and these include companies like Disney, Hormel, things of that nature. Dave:                                    01:36                     So these are great companies that have been paying a dividend and growing dividend for 25 years. And these are some companies that could be fantastic investments for you if you know when to get into them and what to look for in the companies. Now keep in mind, these are, some of these companies are not always going to be great investments. They could be overvalued at a particular time. So they may not be the right thing for you to invest in, but they certainly would be worthy of putting on a waitlist or a watch list to keep your eye on in case the market takes a downturn, and you would have an opportunity to buy into some of these when they would be cheaper for you. So without any further ado, why don’t we go ahead and chat. Andrew, why don’t you talk about one of the first companies? Andrew:                           ...
September 19, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 119, tonight, Andrew and I are going to talk a little bit about the companies that have helped Warren Buffet grow all of his wealth the most. And what we’re going to focus on today is, you guessed it, insurance companies who, who exciting. Fun. It is interesting, and it is fun. I promise you Andrew, and I always bring the fun. So this will be interesting, and we’ll come at this from a beginner’s aspects. So we’ll talk a little bit about what an insurance company is, what they do, how they make money. Maybe a little bit of accounting, not too much cause I don’t want to put you to sleep. And then we’ll also talk a little bit about some valuation metrics. So we’ll go ahead and start a little bit. Andrew, did you want to say hi? Andrew:                              01:24                     I did want to say hi. I think this is a very interesting topic to me because, do you think about Warren Buffet, what makes him so great? He’s, he’s a cool people person, he’s probably a great manager, all of those things. But his biggest strength is his ability to allocate capital. And so in a lot of different businesses, you have CEOs who have to make those type of decisions with their capital. You know, we’ve talked about that before. It’s like, do I want to pay out a dividend? Do I want to buy back shares? I want to reinvest in the business in Buffett’s case. And the way that they structured Berkshire, they buy these businesses and then have the business buffets. So Buffett will buy like Geico. So I think we’ll talk about that a little bit. They’re an insurance company. Andrew:                             
September 12, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:36                     All right folks, welcome to Investing for Beginners podcast. This is episode 118 we are back with another session of answer question mode. We got some other fantastic questions. You guys are sending us some great stuff, and this was a lot of fun. So Andrew and I get to answer some questions and try. I hope you guys weren’t a thing or two. So I’m going to go ahead and read our first question and Andrew and I, we’ll do our little give and take. So, first of all, it says hi Andrew. I want to start by saying thank you for the time and effort you put it into your podcast. As a beginner, I can honestly say that every podcast I’ve listened to so far has been a little pot of gold for gaining knowledge and investing. I appreciate it. I’m a 21-year-old from the UK who recently came into some inheritance due to my father passing away unexpectedly. I’m looking for the wisest ways to invest this and creating a solid portfolio I can build on. Dave:                                    01:26                     At the moment I’ve invested a large sum of money through Hargraves Landsdowne stocks and shares Isa into Vanguard strategy at 100% equity, which I plan on keeping it there to grow over the next 10 15 years. But I feel like there isn’t any anywhere near enough. I have a few questions. I hope you’d be able to find the time to answer. The first question I hear you talk about aiming for around 20 funds to invest in to minimize any loss. Would you advise that I invest in 20 funds over a course of say two years or aim to invest larger sums of money into four to five funds over a course of two years and keep adding from the money, which is returning from the Andrew, what are your thoughts? Andrew:                             
September 5, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern, to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:35                     All right folks, Welcome to Investing for Beginners podcast. This is episode 117 we’re going to continue down the train. You’ll get the pun here in just a minute, a train tracks of answering some listener questions. We get another great one the other day and Andrew, and I wanted to go ahead and take a stab at answering this, so I’m going to go ahead and read the question. Andrew and I will do a little back and forth, so it says, Hello Andrew. I pray that your week is going well. I recently subscribed to your real-money portfolio and learning a lot. I’ve been listening to your podcast for some time now and appreciate you and Dave’s insights. A few months ag,o I ran a screen and found GBX that had some great appeal. I haven’t purchased your VTI but have something that I’ve been using to assess intrinsic value using Morningstar and guru focus information. Question with the market cap being around 750 million and the sales being 2.8 1 billion, how does that fit into your preferred metrics for screening? I liked the other numbers a lot, and I’m just wondering could this be a value trap just because it is a smaller company. Thank you for your time. Again. Thank you for sharing what you weren’t in an understandable way, Kevin. All right, Andrew takes a stab at and talk about what we were talking about before we came on the air. Andrew:                              01:51                     Okay. Yeah. So my idea for this, obviously I’m going to answer the question eventually, and you’re going to have to remind me. But I think, so w we were looking at this. This is a stock I have; I haven’t looked at before. I don’t believe you looked at it before either. So we were in the pre-show going in and going through our approach on, you know, checking out stock like this. And I was thinking, well this is pretty useful. Why don’t we do the same thing but share it with the audience? So I have a lot of things that pop into my mind when I look at a stock like this. I’ll probably go on tangents to my tangents in this episode. So bear with me.
August 29, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern, to decode industry jargon, sirens, crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:34                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 116 tonight. Andrew and I are going to answer some listener questions. You’ve been getting some great ones lately, and you guys keep sending us great stuff, so we want to keep talking about it, see if we can help you guys. We’re in a thing or two and answer any questions that you guys might have. So I’m going to go ahead and read the first question and then we’ll go from there. Dave:                                    00:58                     So it says, Hello Andrew. I started listening to your podcast, and it is inspired me to start investing. I found a list of dividend aristocrats that ran each one through Finviz with filters. I did the research, looked into the balance sheet, and warned about what the companies I was interested in did. The one I finally decided on was WBA Walgreens Boots Alliance. I didn’t see anything to wrong, and a balance sheet is slower growing its profits at debt as well, and I saw nothing to my beginner’s eye that says it’s bad, so I bought three shares. That being said, now I think I miss something and I don’t know what the price immediately dropped in price hang it. They released an announcement saying they’re going to close down 3% of their stores. Now I know most people freak out about that, but they’re trying to do it to help more profitable because everyone says they should be doing better than they are. I guess my question is, as a new investor, I’m kind of terrified that I bought the wrong stock. Even after reading the 10 Q and 10 k I’m still not sure I miss if I miss something. Someone with more experience would have seen. I guess my question is, as a new investor, how do I figure out if I’m right or wrong? Andrew, what do you think? Andrew:                      &n...
August 22, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:37                     All right folks, we’ll welcome to Investing for Beginners, the podcast. This is episode 115 tonight we’re going to go ahead and take some more listener questions. We’ve got some fantastic questions that Andrew and I wanted to answer on the air. So we’re going to go ahead and talk about those. So without any further ado, I’m going to turn it over to my friend Andrew, and he’s going to go ahead and read the first question for us. Andrew:                              00:59                     Perfect. So I have a question here from Camberley. She says I have some questions regarding IFB episode four the eight or the fine stock indicates a failing business. , I guess let’s go through these questions one by one. Number one. If you don’t know this, a falling stock until it’s too late, whether the options is the only option just to sell right then and accept your loss. So if you don’t mind, Dave, I’m going to take this one first. Absolutely. Go for it. So that’s, it’s tough, right? Because if we could figure out how to avoid falling stocks, we would do it. We would all do it, and we would all be very, very wealthy. The, so she did mention she listened to the episodes. So I did try to explain how you need to figure out the difference between a stock that is falling because the business is bad and a stock that is falling because of temporary sentiment that is negative in the stock market. I think a, and it goes really to what we try to teach. Andrew:                              02:08                     To
August 8, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, welcome to Investing for Beginners podcast. This is episode 114 tonight, Andrew, and I are going to discuss a listener question. We got this great question from Jack, and I’m going to take a moment to read the question and then Andrew, and I will do our little back and forth and have some discussion about it. So starting we have, Hello Andrew. I’m thinking about buying a home monthly mortgage costs are currently cheaper than renting in my area, and my family would be able to pay the down payment for me in cash. Do you have any insight into the financial advantages and disadvantages of buying a home? In this case, I have read the buying a home is not a great investment unless you are renting it out due to the hidden costs of home buying. And the fact that a house is a liability until you pay it off. Do you think I should put the money I would use on buying a house to instead invest in a stock market? I’d appreciate any insight you have into this topic. So Andrew, what are your thoughts? Andrew:                              01:30                     You want to open this candle warm? Dave:                                    01:32                     So yeah, apparently, yeah, let’s crack it open. Andrew:                             
August 1, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to Investing for Beginners podcast. This is episode 130 tonight, Andrew, and I are going to talk a little bit about they called an inversion. I came across this great blog post from a gentleman named James Clear who talks a lot about habits and developing different patterns and ways that we can think better and work better with our minds and how we can set ourselves up to have better processes in our lives. And he talked about inversion. So if those of you who are not familiar with inversion, inversion means that you take something and you turn it upside down, and you look at it from a different angle or a different way. And I’ve talked a little bit about this in the past. And Charlie Mugger is a big fan of a; I’m a big fan of Charlie monger. I was going to say; he’s a big fan of mine. That’s so not true. , I’m a big fan of Charlie Munger and the way he thinks. He’s a very, very deep guy. Dave:                                    01:33                     And he talks a lot about inversion in his blog posts, in his books, in his speeches that he gives. And he’s always quoting this term, invert, always invert. And you got that from a mathematician named, Carl Jacobi and this is a German mathematician, and he was famous for figuring out very, very hard problems by inverting them. And by, what he meant by this was that he would take a math problem and look at the answer and try to work backward to try to figure out how to solve the problem as opposed to looking at the problem and then moving forward trying to figure out what the answer would be. And he felt like that that was a powerful way for him to look at the roadblocks and figure out backward how to look at things. And this is something that I do myself when I’m trying to figure out how to work with different formulas and things that are a little bit above my pay grade so to speak is I will look at the answers and
July 25, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 112 tonight. Andrew and I are going to dissect it listener question that we got from Clinton. It’s fantastic. He has a lot of great points in there, and Andrew and I wanted to just kind of walk through each section of those and take some time to answer those questions, and so I’m going to go ahead and start reading. Dave:                                    00:58                     So first, a dear Andrew, two weeks ago, I started doing some serious research on investing in the stock market. I have next to no investment slash finance background. I’m 33 years old and married, working in health care with my first child. On the way, I came across your podcast with Dave on Spotify, and ever since I’ve been listening to two episodes a day from the beginning. I have a 40 minute each way commute to work. I am very intrigued by value investing. So I decided to purchase your e-letter letter to follow along with your $150 a month portfolio. So the first question, I am going to spend $1,000 a month in my invest in, in my invest in my account for the next 20 months to have around 20 positions and my wife and I will put $200 a month into the IRA account. I purchased the stocks of number and number blanket blank does Zack is a premium picks from the leather. Dave:                                    01:58                     Okay, perfect. We’ll blank that out. So I researched and thinking about investing in
July 18, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern, to decode industry jargon, silence confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 111, Tonight Andrew and I are going to talk about some listeners, questions that we got. Then we’re going to focus a little bit on investing in our later years, i.e., our 50s or early sixties that kind of timeframe. We’ll talk a little bit about some thoughts we have on that related to some of the questions that we got recently about this particular subject. So I’m going to go ahead and start and read the first question. The first question is, Hi Andrew, my question is investing in your fifties I’m in the middle of a divorce of 31 years. We have accumulated a lot of wealth. So my question is, what would be the wisest strategy? I will have substantial alimony. Have worked outside the home for 29 years. So assuming I won’t need all the equalization payment, where would you suggest I start? I feel like I’ve lost much of the compounding times. So now what? I’m 58 and healthy to hope to see my eighties. I’d be thrilled to hear from you directly or cover the topic in an email for the broader crowd to work. I can’t be the only one in this situation. Thanks. Dave:                                    01:42                     When though when you’re not, so as somebody who is in your age range, I’m 52, so I’m the older one or the crowd here between Andrew and I and some would maybe sometimes I might be the wiser one, but I am not so sure about that always. , so I guess, I guess the first thing is I, my condolences about the divorce. I’m sure that could not be, easy to go through and I’m sure you have a bazillion questions going on. So as someone who’s gone through a divorce myself, I, I feel for ESL, it’s not an easy situation to go through. Dave:                        ...
July 11, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premi investment guidance for beginners, led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the nbers, your path to financial freedom starts now New Speaker:                   00:36                     Welcome to the Investing for Beginners podcast. I am Andrew Sather; we have another great interview for you today. Dave’s taking the day off again. Today we have Tobias Carlisle. He has done a ton of stuff in the online space, the investing space and made some great contributions to the value investing world as well. So with that, Tobias, I love to dig into all the stuff you’ve got going on, but thanks for joining us today. Tobias:                                  01:05                     Hey, thanks for the very kind introduction, Andrew. Appreciate it. Andrew:                              01:09                     Yeah, so I guess first things first, I’m just going to like dive right in and then maybe we can go over your background a little bit later. , just the top of the thing that comes to my mind cause I was listening to your book acquires multiple, which is a fantastic book by the way. For anybody, basically. We’ve mentioned your book several times on our show, but I think to cliff notes summary. It’s like I’m taking Joel Greenblatt’s ideas and adding an extra component to it and having a ton of backtesting research and all whole lot more than I’m not giving it full justice. But as I was listening to it, this huge thing that comes up as a theme over and over again is this idea of mean reversion. And I think it’s a fantastic way to kind of start a discussion about some of the things when you talk about value investing then that’s something that I don’t think is a term that gets presented to beginners a lot. So can you talk about what mean or diversion is and kind of how that applies to the stock market? Tobias:                                 
July 4, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Andrew:                              00:36                     Welcome to the Investing for Beginners podcast. I am Andrew Sather; Dave is taking the day off. So today I have a special guest with us. Today’s guest is David Keller. He is the president and chief strategist at Sierra Alpha Research LLC. I am very excited to hear what he has to say about behavioral finance. So before we dig into all of that and hear everything that David’s got going on and the stock market investing and finance world, first off, thanks to David for joining the show. And if you can give us the listeners just a short synopsis of kind of where you’ve been, how your investing journey has been and how it’s taken you and what’s something cool that you’re working on today. David:                                   01:26                     Absolutely. Thanks, Andrew so much for the invitation. It’s great too, great to join you. And I, I’ve listened to some of the the the episodes of the podcast. I think it’s fantastic and I love your focus on educating, uh, beginning investors that’s there. There’s so much that, uh, investors have to learn as I get started. So, so thanks for what you guys are doing. I think it’s great. Um, so my, uh, I’ve been in the financial industry for about 19 years. I started in, uh, mid 2000, which if you know, your financial marketing history man means you, you know, that the first, uh, you know, six, 12, 18 months of my investing, uh, experience where relatively difficult, which was coming out of the tech bubble and, and watching people that had come before me sort of struggling with that. And I was at Bloomberg, got in New York for the first eight years of a, of my career, and that’s where I learned about behavioral finance investors, sentiment decision making, and then a technical analysis. David:                                   02:20       &nbs...
June 27, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:37                     All right folks, welcome to Investing for Beginners podcast, this is episode 108 tonight Andrew, and I are going to talk about minimalism. Yes, minimalism. We’re going to talk about how minimalism can help you in a variety of different avenues of your life. And of course we’ll talk about the stock market and finance and some of that fun stuff, but we’re just going to kind of go and see where this takes us. Dave:                                    01:01                     So Andrew and I were talking off the air before we got on about this and I wanted to share some thoughts I had on somehow minimalism can help me with, for example, investing. So one of the things that have helped me a lot, and I’ve got this from some of my Gurus Warren Buffet, Charlie Munger, Monish Pabrai among others, Vitaly, many of these people. And one of the things that I do is I try to tune out the noise a lot. Uh, I don’t watch the news hardly at all. I don’t watch CNBC. I don’t have, you know, Bloomberg TV blaring at me all day long. I don’t pay attention to that stuff. It gets in the way. It distracts me from what I need to be doing, which is focusing on a company and trying to learn as much as I can about that particular company. And you know, thinking along those lines, thinking about how I can become smarter, better investor and getting distracted by all the different opinions and thoughts of things that go on. For example, you know, fin twit, that’s one of my guilty pleasures if you will, is going on Twitter and reading all the, you know, stuff that’s going on in the finance world from all these people that I follow. And it could be very entertaining sometimes, sometimes for good, sometimes for not so good. And it can take you down a rabbit hole. Dave:                          &nbsp...
June 20, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right, folks are welcome to investing for beginners podcast. This is episode 108 and I got some great listener questions, and we’re going to take a few moments answer those. Who are we kidding? It’s going to be more than a few moments. But we’re going to go ahead and answer these questions for you guys on air and we’ll just kind of go from there. So I’m going to go ahead and read it. Dave:                                    00:54                     The first question, so it says, Hi Andrew. First off, I want to sincerely thank you for all that you’ve taught me in regards to the stock market. I’ve always been interested slash intimidated, but once I caught onto your podcast, I couldn’t stop. They are just digesting more and more information on the market. So again, a huge thank you. Quick question, quick question. When it comes to dollar cost averaging, I am looking to invest $150 a month. With that being said, I am ready to purchase my first share, which happens to be this month stock pick, ticker blah blah, blah. It is trading at $91, so I’m only going to purchase one share, but I’m curious now if I should save the remaining $60 for next month that purchased two shares are used, the remaining $60 I have to purchase another share of a cheaper sock. Any feedback would be helpful. Thank you, Eric. Andrew:                              01:44                     Okay, so to be clear, for people who don’t follow everything I do, I have a newsletter. It’s a paid newsletter called the say their research Eli there.
June 13, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:35                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 106, tonight Andrew and I are going to talk about that, the disaster, true. That is Sears and all the goings on with that. And talk a little bit about bankruptcies and some other things. So Andrew, why don’t you go ahead and tell us about the article that you sent me today and we can talk a little bit about that. Andrew:                              00:55                     Yeah, it’s actually kinda depressing then, would piss a lot of people off, especially the people that work there. So Eddie Lampert, he was the former Sears CEO. Um, and I don’t know, maybe you know better than I was. He, did he have like, um, a big ownership stake in the company too? Is that why? Dave:                                    01:17                     I think so. Yeah. He’s a hedge fund billionaire. He was supposed to turn series into the next Berkshire Hathaway. Andrew:                              01:26                     How’d that, how’d that work out? Dave:               &...
June 8, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:37                     All right folks, welcome to Investing for Beginners podcast. This is episode 105, tonight. Andrew and I are going to read some listener questions and we’ll go ahead to answer those on the air and we’ll have our usual banter and witty, witty comments from each other as we go forward with all this. So I’m going to go ahead and read the first question. Andrew, would you like to say hello? Andrew:                              00:58                     Hello. Dave:                                    01:00                     Excellent. Good job. All right, moving on. Hello. I have been following your podcast for months and just recently signed up for your service. I noticed you’re using your Roth IRA for your stock recommendations and tracking your 40 year portfolio. I understand the benefits of using a Roth to avoid taxes but is absolutely unnecessary for the goal of your slash our investing. My Roth is being utilized with an advisor service from vanguard. So it was not available for individual stocks. I’m using a separate, separate taxable brokerage account for my stock picking. Would this still be beneficial in the long run with having to pay taxes yearly on dividends and capital gains are selling if in a taxable brokerage? Thank you Jared. Andrew, what are your thoughts on this? Andrew:                             
May 30, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcasts. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome Investing for Beginners podcast, this is episode 104 tonight, Andrew and I are going to talk about in terms of Warren buffet style. So I recently wrote a post, I had this idea and I ran it by Andrew to see what his thoughts were. So I kind of, and he liked it. So I kind of flushed it out and posted a blog post on his website. It’ll probably be up sometime next week and Andrew and I thought we could talk a little bit about it and I could kind of go through my idea and my thesis and then Andrew can try to pick it apart. Ala Charlie Munger style. Andrew:                              01:08                     So, um, can I say, yeah, of course. I just want to, um, I’m excited for this. First off, um, be, I think it’s very important that we talk about this and we haven’t really, I don’t think we’ve really talked about DCF at all. So I’m excited for this and I guess, see, I’m going to interrupt you at times just because I think we need to think about the beginners who don’t know some of these terms at you and I are so familiar with. Right. So if you don’t mind, I’m uh, I’m going to interrupt you here and there to hopefully give context and help people understand better because I think if there could be a podcast episode that like makes DCF easy. I know for me, I try to learn DCF many times and vitality’s book, um, we had the telly on several episodes ago, his book, something about it just made it so simple that it all made sense to me. So maybe this episode can be that way for some other people. Plus it’s just a fascinating idea on topic. So I’m just really, really excited. Thanks. Yeah, I agree with you. Yes, of course. You can interrupt me at any time. Uh, and it is, you know, it is something that can be very daunting and hopefully I can shed a little light on kind of how this works and, and make it a little bit easier for everybody.
May 23, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcasts. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence, crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:39                     All right folks, we’re welcome to Investing for Beginners podcast, this is episode 103 tonight. Andrew and I are going to talk about IPOs, uh, with the upcoming Uber IPO on the horizon. It’s going to begin here very shortly. Uh, Andrew and I thought it would be apropos for us to talk a little bit about IPOs and a little bit about Uber and just kind of our general thoughts about how this will work, what we think is a good investment and so on. So Andrew wants to go ahead and take your first stab at this, and then we’ll have a little conversation about it. Andrew:                              01:12                     Okay. I want to, so I guess to overview on the Uber IPO and then maybe we can talk about IPO is in general. So based on or recording this the day of their IPO. So it’s happening kind of in real time as we’re talking. They, some people, there are huge expectations for this. Lyft had an IPO very recently. Some people, I don’t know where they got this idea, but some people were thinking the Uber with IPO at like a hundred billion market cap. Um, I read, I read 120 billion. Like where, where do they, they just like put a bunch of numbers in a hat and Oh, 120 sounds nice. And that’s what they decide. I don’t; I don’t get it at all. Andrew:                              02:01                     The what ended up happening was 8.1 billion as of today as well. I’m seeing, uh, they’re saying Facebook raise like 16 visas raised 18 and 2008 and Ali Baba raised 25 billion to 2014. So to put that in perspective,
May 9, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks. We’ll welcome to Investing for Beginners podcast. This is episode 102 tonight. Andrew and I are going to answer a couple of listener questions we got recently. They were really, really good questions. They were really good questions and it had some great potential for us to talk about some things that we maybe don’t always get to talk about. So Andrew and I thought that there would be a lot of fun for us to talk about. You guys could take away some great stuff from those as well. So Andrew, why don’t you go ahead and read the first question to us. Andrew:                              01:05                     Yeah, sounds good. So this is from Sam, Sam s he says, Hey Andrew and Dave, I listened to your guys’ podcasts in September, 2018 have been caught up for a while. Love the content that you put out every week. Also, I’ve been subscribed to the Eletter since December, 2018 and love the and say I get from that as well. Thank you. I can’t thank you enough for helping me take that leap into the wild, the unknowns or the stock market and help me see what a valuable tool it can be to reach financial security. Andrew:                              01:33                     I love that. Just as a side note, okay, he’s got two questions. First one, let’s, let’s tackle that one first. He says this first one deals with thoroughly reading the 10 K I have a business background so I am lucky enough to be able to understand income statements, balance sheets and most of the 10 k but when it comes to the risks portion of the 10 k how do you decipher which ris...
May 2, 2019
Announcer:                        00:00                     Your tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern too decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:35                     All right folks, welcome to Investing for Beginners podcast. This is episode 101 tonight. Andrew and I are going to talk about a listener letter that we got, and it is a fantastic letter, and she has a great questions, and so Andrew and I wanted to just kind of read through her letter and then just answer those questions for her on the air. So I thought this would be a lot of fun. So Andrew, why don’t you go ahead and start talking about the letter and then we’ll just do our little back and forth thing. Andrew:                              01:02                     Yeah, I love it. That’s a great letter. This is from Susan G so she starts off. Dear Andrew, I’m on episode 16 of the podcast and I’ve learned more about finance from your program than I did in my years. At B school in the late seventies, Wharton for two years, then decided to switch to a psych degree on the liberal arts side. Wow. That’s quite a compliment. Thank you. I got serious about investing when I returned full time to work in 2009, um, basically built up a four one k summarizing here, uh, until from 2009 to 2017. Okay. And then stopped building out the 401k. Andrew:                              01:45                     She says I am 61 single and only about a third of the way to where I need to be to even have a modest retirement. I am currently on disability and I’m not sure what his next workwise. So 370 k 401k 62 K and Roth Ira, a hundred k and cash can value investing be part of my solution for current or future and come it appeals to me is consistent with the process part of my brain. Um, maybe, uh,
April 25, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners lead by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:35                     All right folks, we’ll welcome to the Investing for Beginners podcast. This will be our podcast episode 100 Ooh; we made it. That’s awesome. All right, so today we’re going to talk about the basics of spinoffs and acquisitions, and we’re going to, we’ve talked a lot about these from the aspect of the company buying, but today we’re going to kind of go over some generalities of the other side. So the company that’s being acquired or spun off. So Andrew, why don’t you go ahead and take us off. I know we have a listener question regarding this as well as some are our general thoughts on this. Andrew:                              01:12                     Yeah, so that fits right in and yeah, episode 100 let’s do something not special at all and just treat it like any other episode. I’m down for that. Had a question from a  listener to the podcast, and this is about acquisitions. So Hi Andrew. Just started listening to your podcast and the impulsively dove into the stock market through the Robin Hood and Mobile App. Andrew:                              01:35                     We should slap this person on the wrist. I’m cautiously putting it in a mere $600 into a variety of stocks. I was wondering if you could cover how a company’s stock gets affected if they get acquired by a larger company. Is it a good time to buy when that happens? Is it the worst time to buy? So something that you know we can cover and then we’ll try to keep it short because these things can be very, very complicated. But it’s important to know just as a gen...
April 18, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, welcome to the Investing for Beginners podcast. This is episode 99 tonight we are going to talk about a stock that Andrew recently had some bad walk with and has sold. And we’re going to talk a little bit about some of the lessons that he learned from his investment with this company, including things like activist investors, divestitures and board resignations, and how those can affect what happens with a stock. So Andrew, why don’t you go ahead and tell us about the company and a little bit about your experience. Andrew:                              01:08                     Yeah, sure. So I think when you talk about stock picks from the past, it’s much more useful to talk about your mistakes rather than your successes. Um, we can, we can all buy stock. I can go out for a multitude of reasons, but you know, if you can look at how you kinda messed up and maybe you can avoid that in the future and maybe some people can kind of recognize a situation like this and maybe stay clear or in the case of, of my, like my personal kind of experience with this and the way that maybe I wish I would have played it is I would have waited longer to, to get into this stock because it was clear that the fallout from the stock hadn’t completely finished. And so I’m keeping this stock on my radar and I’m watching to see how it progresses. Andrew:                              02:04                     I’ll talk a little bit more about the details as we go along here, but it’s one of those where I would have wished for the dust to settle kind of a thing before, before I bought and one that’s a hold it. So it was by no means like a portfolio killer. I lost maybe 25 to 30% think a lot. So I’ve definitely had gains that have more than made up for that. But, uh, it’s still something that you still want to examine your mistakes and try them group fro...
April 11, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern, to decode industry jargon. Silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode ninety-eight. Tonight we’re going to talk about why you shouldn’t be a lone wolf investor. And I’m going to have Andrew kind of take us from there. All Right, Andrew, why don’t you go ahead and chat. Andrew:                              00:50                     Yeah, I love it. So maybe I’m recording this because this is something I need to tell myself more than anything else. Having people around and having them influence your life can do a lot of things for you. Very, very well. They say the five people closest to you are the most important because they impact how you live your life and the big, big way. So I, I kind of present this topic and this idea based on some personal context. I guess I didn’t mean to get like super personal, but there’s a saying that as you get close to the turn of a decade you start to make big moves, right? So we’re here close to the end of 2020 and that full decade before. Andrew:                              01:41                     So it’s time to make some big moves, and we’re going to talk about some big ideas and the show. So when I think about what got me here and I kind of reflect on my past and the journey I’ve taken, and even this podcast where we’re at 98 episodes approaching a hundred here, and we have way more people than I thought, whatever, listening and tune in. It’s been incredible. We get tons of feedback, tons of emails, and that’s been such a wild ride. But you know, it’s funny to think about how it all started then and maybe how, if it weren’t for the people that were placed in at least my life, how it when I’ve gotten this far. So when I think about investing personal finance,
April 4, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginning led by Andrew Sather and Dave Ahern. To decode industry jargon. Silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to Investing for Beginners podcast. This is episode 97. Tonight Andrew and I are going to talk about wisdom, really unwise financial decisions. We’ve put together a list of some things that you should not do if you want to be wise with your money. So Andrew, why don’t you go ahead and talk about our first item, then we’ll kind of go down the list. Andrew:                              00:59                     Yeah, sounds good. Making this list was fun, wasn’t it? It was fun because I’m guilty of these just as much as anybody else. I don’t like to think that. I don’t like to imply that I’m just like the super wealthy dude that doesn’t make any mistakes. But you know, I think we can kind of learn from other people sometimes. Maybe learn from ourselves sometimes and we can do some things with our money that, uh, you know, when it becomes a money pay, we don’t have to fall into those traps. So I think a huge one, and by the way, I think a lot of these are pretty controversial. I think this one’s controversial too, but credit cards. So my thing with credit cards is obviously my stance is I’m the super no debt guy, only by, you know, I only want stocks that don’t have a lot of debt. Andrew:                              01:52                     I think that is the devil, the borrower, slave, borrower’s slave to the lender, you know, all these sorts of things when it comes to debt. However, I also like to think that I’m brilliant one. A lot of the times I’m not. So even with my
March 29, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginning led by Andrew Sather and Dave Ahern too decode industry jargon, silence, crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to be Investing for Beginners podcast. This is episode 96. I am back this week after missing last week. I’m sorry guys, but I had pneumonia and Andrew was kind enough to help me out so I didn’t have that coughing, hacking everybody’s ears, uh, during the, during the episode, so I appreciate it. Andrew, take it over for me last week tonight we’re going to talk about some questions from our listeners. We got another great batch of questions and a couple of testimonials there. We thought we’d read those to you guys on air and inner and I can go back and forth and answer some questions. So Andrew, why don’t you go ahead and read the first one to it and we’ll start talking. Andrew:                              01:16                     Yeah, sounds good. So this one’s a testimonial. I thought it was cool and inspiring because it shows you just how far you can go. Um, when you really put your mind to it. I parse it down a bit, but basically, um, the email goes, Andrew, I just sign up for email lists. I started listening to your investing for beginners podcast about two weeks ago. I appreciate the work that you and Dave are putting into it. After listening to a couple episodes, I finally dove into actually investing on my own of wanting to do it for years, but was overwhelmed thanks to your podcast. I took the leap a leap on Monday last week and set up an account through Robin Hood due to the advantage of learning that a low cost since beginning of this week, I’ll be gone a reading through 10 k’s and learning so much about companies. Andrew:                             
March 21, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginning led by Andrew Sather and Dave Ahern, to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Andrew:                              00:36                     Welcome to the Investing for Beginners. episode 95. Today Dave is under the weather so it’s just going to be me, but we have a guest today. His name is Kenny Robinson and I’m really excited to have him on. Kenny’s a fulltime diversified investor. You might have heard about him from his youtube channel called the Kenny Robinson channel and he’s got a lot of cool things I’ve, I’ve checked out several of his videos is I’m really excited to get perspective, particularly around dividends and dividend ETFs. A, if you’ve been listening to the show at any length of time, you know how excited I get about dividends and I think we can have a really fun conversation. So Kenny, thanks for coming on and joining us today. Kenny:                                  01:21                     Yeah, I’m, I’m very excited to be here on the podcast and, uh, hopefully we can definitely talk about some excellent ETFs and dividends in general. So yeah, let’s, let’s do it. Andrew:                              01:32                     All right. Let’s start, you know, you are fulltime diversify the investors. So what does that mean to you? I know we talked a little bit off the air and you said you do some investing outside of dividend ETFs. So, uh, what does that mean as far as the whole circle of kind of what you do with your investments? Kenny:                                  01:53             &nbs...
March 14, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 93 tonight we’re going to discuss it. Buy and sell rules. Well actually we’re going to discuss buy rules. We recently got a great listener email that wanted to chime in on his ideas of some by rules. Andrew and I have discussed those several times in a podcast. Episode 32 we discussed buy and sell rules and that was really popular. And then we also touched on those as well with Braden in episode 88 and so we’ve got this great listener email that I mentioned and we wanted to talk about his bye bye rules. So Andrew, why don’t you go ahead and read the first by rule and then we can talk about it a little bit. Andrew:                              01:21                     Yeah, sure. So obviously super inspiring. I think it’s really cool when people who are listening to our stuff take it and run with it. I’ve said that before. So the first viral that, um, this is Daniel f first viral that Daniel, um, shared with us is it must score under 250 on the Vti and must file a readable tank k that demonstrates good finances that indicate I am getting a bargain. Do you agree or disagree? I definitely agree. Yeah, me too. That one’s easy. Next, Dave:                                    01:57                     next a must pay a dividend and allowed directly reinvestment a drip grows as investment. Well that’s kind of a no brainer. Yeah, it’s got to pay a dividend and it’s got allowed direct reinvestment cause that’s how we grow our wealth.
March 7, 2019
Dave:                                    00:00:36               All right folks, well welcome to Investing for Beginners podcast. Tonight we have a very, very special guest with us. One of my favorite writer, thinkers and investors. His name is Vitaly Katsenelson and he is the CEO of the IMA firm based out of Colorado and he has a fantastic blog. It is one of my favorites that really, really has helped me learn and grow so incredibly much. It’s called the Contrarian Edge. If you do not already subscribed to it, you need to, it’s fantastic. So without any further ado, I’m going to go ahead and get us started that you don’t want to hear me talk. We want to hear Vitaly talk. So Andrew, why don’t you go ahead and ask the first question and we can go ahead and chat a little bit. Andrew:                              00:01:15               Yeah, thanks Vitaliy, for joining us. And, I’m also a big fan. I’m currently, it was actually good timing because I’m in the middle of reading your Sideways Markets book. Just so happened to be reading that when I reached out to see if you want to do an interview. We’re obviously a show that’s very focused on beginners and we like to talk about value investing and trying to buy stocks– buying low, selling high. So when you think, how do you think about value investing because that’s one of the things that you like to talk about. You’re a value investor, you’d like to think about investing. So do you approach the actual topic of value of investing differently? Do you see it as like a numbers game? Do you see it as maybe a mixture of both? How would you go about approaching the idea on the topic of value investing? Vitaliy:                                  00:02:09               Well, first of all, Dave and Andrew, thank you very much for having me. I’m looking forward to this. All right. I think value investing is usually misunderstood. And let me explain why. Ben Graham wrote the Bible of value investing The Intelligent Investor and when most people read this book, they get would they get out of this? They get this recipe and the recipe is basically this: buy cheap stocks. And I think they get the wrong message out of this though. The recipe is part of the book. The bigger message of the book is really, it’s a value investment philosophy. It’s something I go through in my six commandments. But basically value investing is a philosophy where you say, and let me just go through a few of those six commandments. Stocks are not piece of paper their businesses.
February 28, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave, too decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:35                     All right folks, well welcome to Investing for Beginners podcast. This is episode 92, tonight Andrew and I are going to read some listener questions and take a few minutes to answer those. This is going to be kind of a refresher episode on some basics, so things that we haven’t talked about a while. I wanted to give everybody kind of a refresher on some of those and also to help some people that are just joining the podcast now that might feel like they might be a little bit overwhelmed. Dave:                                    01:01                     So I thought we thought this would be a great time to talk a little bit about some, some of the old basics because that’s always the foundation for everything you ever want to do. So with the first one, Andrew, you’re going to go ahead and read the first question and then we’ll talk a little bit about that. Andrew:                              01:17                     Yeah. Uh, and I’ll also add the disclaimer if you’re brand new and this is something where you’re an absolute beginner and you’re looking to get some really basic stuff. Obviously listen continuously in this episode, but we also have a couple of series that we’ve done that are basically targeted towards people who, you know, might not know anything about investing, personal finance or any of those sorts of things. So starting on the episode for the three, we have what we called back to the basics and that’s a five part series, getting you an introduction on stocks, Wall Street, other sorts of investments, why investing works, how it works. Well,
February 21, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:35                     Welcome to Investing for Beginners podcast, this is episode 91. Andrew and I are going to take a moment and answer listener questions. We’ve got some that are some great questions that we’ve had in our bank, and we wanted to take a few moments and answer those for you guys. So Andrew, why don’t you go ahead and read it. The first question? Andrew:                              00:55                     Yes sir. So this is a great question from Michael B. we’re going to split it up because there are two different questions here. So let’s tackle this first one. Hi Andrew. I used your VTI every week. I love it. I’m here in Canada. The banks are the most common stock to rise steadily and had decent dividends, but because of their equity, they would never score well in the VTI. I know you aren’t a big fan of financial institutions, but Dave is, and I could care less either way, but based on trends in Canada, most banks are still selling that less than $100 a share which based on their EPS increasing consistently in the dividends increasing regularly. Andrew:                              01:36                     I want to jump on the bandwagon now. Braden mentioned the banks and both of his last interviews with you too. I don’t know which valuations I need to focus on with a company that makes the most money. The higher their debt is. Thirteen of Canada’s dividend aristocrats are financial institutions, nine of which are banks. I’m not sure if I’m chasing my tail here, trying to convince myself they’re a good buy or not, but I do rely heavily on your VTI spreadsheet because it does take a lo...
February 7, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:35                     All right folks, we’ll welcome to Investing for Beginners podcast. This is episode 90. Tonight we have a special guest back from a very popular episode 38. We have a full time a micro cap investor who is the CO-founder of Geoinvesting.com, and he’s going to talk to us about his special brand of investing, and he’s a really smart dude, and he’s got some great insights for us. So why don’t we go ahead and start chatting a little bit about what you wanted to talk about tonight Maj. Maj:                                       01:04                     Yeah. I appreciate the opportunity, and I want to congratulate you on the success you’re having with your podcast. It’s, I think we’ve been over a year since we chatted and it’s really good to see your kind long educating investors, and young investors and how to navigate the market and I appreciate that. Andrew:                              01:22                     Yeah, thank you. We talked off the air before we started to record this, how we just said a million dollars today, so I’m going to be popping a bottle of champagne after this. Maj:                                      
January 31, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave to decode industry jargon, silence crippling confusion, and help you overcome the emotions by looking at the number, your path to financial freedom starts now. Dave:                                    00:36                     Welcome to the podcast, this is episode 89. Tonight Andrew and I are going to do a little more of a deep dive into the 10 K, and that’s one of our favorite things to talk about. I know I like to geek out about 10 ks and so does Andrew, so we’re going to talk a little bit more about them. So Andrew, why don’t you go ahead and start us off there. Big Guy. Andrew:                              00:56                     Yeah, sounds good. So 10 k, another way of saying a company’s annual report, this is the document that every company, every public company is required to file. And this is where you will find all of the information about accompany. We’ve talked about some of the important ratios and some of the important metrics that you’ll find on there, some of the important numbers. So I think today maybe we talk a little bit more about some of the qualitative side. I’ve been reading a lot of 10 k’s lately and have seen some similarities, some, some things that have stuck out and you know, based on some of the previous discussions we’ve had the last couple episodes, you know, on the last episode with Braden. Andrew:                              01:42                     Now we’re talking about, trying to find a qualitative factor and how that, how that helps you make a decision on whether you want to buy a stock a talked about kind of this whole idea of buying stocks with products that are either commodity products or a versus maybe one where a product is priced at a premium. Maybe it’s a value add and the differences there.
January 25, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Andrew:                              00:36                     All right, so we have Braden Dennis on from Stratosphere Investing.com, remember Braden have had. He’s basically Canada stocks expert, so I’ve had him on the show before. We had a good discussion about FANG stocks and some of the evaluations that he was seen with Canadian stocks at the time. We also had some listener questions about Canadian stocks that he was gracious enough to answer and we shared some of those on the podcast as well. Andrew:                              01:04                     And now, you know, we’re trying to a, make this episode as something where it can be a complete star, the guy for some of someone who’s in Canada looking to invest in Canadian stocks, looking to invest in the Canadian market and B, for those listeners who aren’t Canadian, we’re going to dig in maybe at the end if we have time. Uh, I definitely want to dig into at least a couple of Braden’s buy and sell rules when it comes to buying stocks. I think there’s some good discussion in there and a lot of it aligns with a lot of the things that I like to teach and the things that I think people should look for when they’re buying stocks. So that can definitely give insight for people kind of seeing different ways that maybe people approach stocks and how it can be similar and how it can be different. So Braden. Thanks for coming on today. Braden:                                01:58                     Hey Andrew. Yeah, no, it’s a pleasure to be here. It’s been quite, quite a ride since I started investing and reach out to you several years back now and uh, yeah, no, I do feel like things have come so far and I’m going to continue to
January 17, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts. Now. Dave:                                    00:33                     All folks, we’ll work up for beginners podcast. This is episode seven tonight. Andrew and I are going to answer a few. Yes, we got a couple of great ones and we thought there would be really interesting to talk about and they’re kind of relevant to what’s going on in the market as of today. So I’m going to go ahead and read the first question and then Andrew and I will talk a little bit about it. And then Andrew, read the second question and then we’ll talk a little bit about it so that you go ahead and start. Dave:                                    01:05                     So the first question, hello Andrew and Dave, thank you for doing the podcast and helping beginners were in the basic principles of investing and value investing. You guys have fueled my interest to learn more and they’ve given me more confidence when it comes to investing. I have a question for you too. I know Andrew has mentioned a past experience with fl. Hitting is trailing stop and he was forced to sell. He said that he underestimated how far fl would bottom out. I’ve experienced this with a few stocks that have been affected by the current trade war slash terrorists with China, so my question for you too is whether you have any strategy buying stocks that you feel are on a temporary downtrend. How long do you wait before you buy and how can you make the call when you think the stock’s won’t get anymore? Thanks, Josh. Andrew, why don’t you go ahead and answer that first and then I’ll throw in my two cents. Andrew:                              01:56           &nb...
January 9, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     Welcome to podcast episode tonight. We’re going to have an interesting discussion. We’re going talk about several things tonight. So first off we’re going to talk a little about the market and the conditions that it’s in today, and so what we’re doing tonight is we’re recording on. We’re going to discuss the market on December 20th, 2018. Talk a little bit about the market conditions. Then we’re going to segue and talk about my buddy Warren Buffet and one of probably the best speeches you’re ever going to learn about in regards to investing. And then we have a listener question that Andrew wanted to discuss towards the end, and then we also have a special announcement that we’ll talk about at the end as well. So why don’t we go ahead and start off by talking about the market conditions. Andrew, why don’t you go ahead and tell us how good or how bad things are right now. Andrew:                              01:31                     Yeah, it’s really bad right now. Everybody’s freaking out and so I think it’s something we need to address and when I mean everybody, I mean the media, obviously there’s all these reasons for why, why it is basically, I don’t know how the rest of the year is going to end up what I’ve seen historically in December, even if there’s been a strong area you will generally see some selling off in December because people have this crazy idea that you should lock in losses in order to save on taxes. I’ll get like two to a deep into a tangent. That’s one of those stupid things that people use as this conventional wisdom, this idea that you should take a loss to save money on taxes, but so, so you’ll have some of this December selling off. You’ll see as a result of that and we have had so many other factors in play, but essentially where we closed at the end of 2017 last year with the S&P 500, we’re about 200 points under that this year as we record this December 20th.
January 2, 2019
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:34                     All right folks. Welcome to the Investing for Beginners podcast. This is episode 85. So tonight Andrew and I are going to talk about dividends, our favorite subject. Andrew over the weekend had some revelations on some thoughts on dividends and some metrics and he’s got some great blog posts that are going to be coming out here shortly that we’ll talk a lot about what we’re going to talk a little touching on tonight. So some of the metrics that we’re going to talk a little bit about. We’re going to be current yield, recent dividend growth, consecutive years of dividend growth and yield on cost. And I’m going to have Andrew go ahead and start us off and he’s going to be kind of the lead guy tonight and I’ll throw in my two cents on occasion when I feel it’s relevant. So Andrew, why don’t you go ahead and take us away. Andrew:                              01:21                     Alright, I’ll take the wheel. So by the way, by the time this goes live, those posts will be on the blog. So if you go on, they’re going to be a four post series and uh, you can go in depth and really get deep into the weeds so it’s actually useful and you can actually use it when you’re trying to look at dividend stocks. I figure we would talk about some of the ways that people currently trying to find good dividend then stocks. It’s a great primer for beginners and, and there’s some good metrics that we really haven’t touched on much and any of the episodes that we’ve recorded a and stuff you’ll see in financial websites when you’re sifting through dividend stocks, trying to find, you know, the ones that will really drip and do really well give you outsize returns for your portfolio. But you know, some of these metrics also have some things missing with them. And so that’s what all kind of get deeper into. Andrew:                 &nbs...
December 20, 2018
Return on Equity is a quick and easy way to discover how well a company turns its assets into equity. The Dupont analysis goes even further into discovering how the company grows its return on equity. Be it through leveraging debt or growing revenue. Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:35                     All right, folks, we’ll walk up to testing for beginning podcast. This is episode eighty-four tonight. Andrew and I are going to do a two-parter here. So what we’re gonna do is we’re going to talk about the Dupont analysis and the reason why we’re going to talk about this is we got a great question from Facebook that Andrew and I wanted to answer on air, but we wanted to talk you guys through what the Dupont analysis was so that when we answered the question and it kind of makes sense to you guys. So for those of you who are not familiar with Dupont analysis, all raise your hand. Okay? That’s everybody. All right, so this is something that is not talked about a lot and it’s a very interesting analysis and what it is in a nutshell is the breakdown of the return on equity. And Andrew, I’m going to have you talk a little bit about return on equity and then we can kind of talk a little bit about how this analysis kind of that. Andrew:                              01:31                     Yeah, sure. If you’re the asked me that question yesterday, I would’ve had my hand up to. So definitely not aware of it. I’m definitely aware of the return on equity. So that obviously helps a lot. We’ve turned. Oh, we’ve talked about return on equity before we had an episode in the archives or we talked about some of the efficiency ratios, return on assets, return on equity, so that episode might be a good supplement to this one and maybe if you listen to those back to back get a better understanding. I know it’s not that easy to learn these kinds of advanced topics through a podcast, but I think the more exposure you get to it, whether that’s through a podcast or through reading or just writing out some exercises, is trying to do them with some companies and stocks are out there. Then the more and more you can learn and kind of digest it. Andrew:                              02:20                     Like you said, Dave, Dupont analysis is a breakdown of the return on the equity and it essentially breaks it down into three parts. So why it’s called Dupont is because, um, there’s a, there’s a meeting, it’s not, it’s still public, it’s called Dupont, now it merged with Dow Chemicals and now it’s called Dow Dupont. But there were three gentlemen there and they came up, basically, they wanted to figure out how, how they kind of take the return on equity and take it to the...
December 13, 2018
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence, crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     Welcome to Investing for Beginners podcast. This is episode eighty-three tonight. Andrew and I are going to take a few moments to answer some listener questions. We got some great questions recently and Andrew and I wanted to take a few moments to go over those with those with you guys. So without any further ado, I’m going to go ahead and read some questions in an Andrew’s gonna answer for us. So in Andrew’s going to be the area, answer man. Dave:                                    01:00                     So first question. Hi Andrew. My name is Luke. I am 24-year-old college student and I’m a new subscriber and an ebook purchaser. First off, I would like to thank you for all that you’ve taken the time to put it out there. I’ve learned so much from your podcast alone that I’m feeling so much more confidently already about what am doing with my money. The first stock that I purchased was Comcast maybe a month and a half ago. I’ve been contemplating selling to buy into positions, still listed as buys and your ego letter that made the purchase of this month to Comcast has been pretty steady since that held it, but I figured I’d ask for input. I don’t want to miss out on any opportunities. Thanks in advance for any advice. Luke. Andrew, what are your thoughts? Andrew:                              01:46                     So obviously like we like to say we can’t give personalized information or advice. I’m legally, but I can talk about kind of what I would do if I was in the shoes based on like the context a lot of investing in has to do with context. You have to understand that as you go along with your journey, the stock selections that you make, the investment decisions you make, the portfolio decisions that you make. Oftentimes those can be more important than actually the stocks you pick themselves up, but those are going to vary based on what your situation is, what your goals are, where your portfolio is. So some of the WHO’s just building a portfolio, you combine that with not combined, you can contrast that with somebody who already has a diversified portfolio and then you can contrast that with somebody who maybe is five years or less close to retirement. Andrew:                              02:44                     And that would be those with all three be situations where they will all have a different portfolio, uh, decision making ideas and that reflects itself in the stocks that you buy or sell. So for me, when I first started out, when I was first building my portfolio, and Luke,
December 5, 2018
Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:33                     All right. Welcome to this podcast. This is episode 82 tonight. Andrew and I are going to do a case study into a GE. Been in the news recently for some not so great stuff and we’re going to talk a little bit about why investing principles are critical and GE is going to be a great illustration of that. Andrew came across a great article on Wall Street Journal recently and we will put a link to that in the show notes for you guys, but it talks a little bit about a gentleman that worked for GE for a long time and Andrew will give us a little more details on that. So Andrew, why don’t you tell us a little bit about the article. Andrew:                              01:14                     Sure, yeah. It was actually about several gentlemen, an article was written back earlier this year. There’s this one. He’s like 61 years old. He had basically was able to retire after working at GE for a thing. It was over for the years. He had a pension, 85,000 and you had company stock up more than $280,000, to give some backstory on GE, a huge, huge blue-chip company. I believe the evaluation used to be over $200,000,000,000 back in a, like the.com kind of boom-bust. They kinda had the type of evaluations that you saw just like with every other stock. And same with the financial crisis. However, recently things have been really bad there they went from 2016, they had share price hovering around 25, $30 a share through 2017. It was dropping and I believe by the end of 2017 was around a, it’s around seven a $7 and eighty cents per share. Andrew:                              02:28                     So the company has just really been struggling and the amount of loss in market value from this stock has just been horrendous. In this Wall Street Journal or the coal, they compare from a dollar standpoint, right? An of market value. Obviously when you compare the accompany like Enron or Lehman that went completely bankrupt, the percentage is not as much because obviously, GE is still alive today, but the actual market value loss was greater than a lot of some of the big name bankruptcy’s or just huge stock crashes that we’ve heard of in the past. Companies like Valiant and Ron DM, Lehman and Bear Sterns. GE has lost more market valued under all of those since 2015, so obviously it had to be a big stock with a lot of the market value at that happen. Really, really a sad, sad story and I think we can shed some light into it and really try to examine it and let’s try to learn lessons from it and hopefully that helps us understand that some things that we like to preach over and over again on the podcast are not just things that we say because they sound nice. Andrew:                             
November 28, 2018
[00:00] You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome the emotions by looking at the numbers. Your path to financial freedom starts now. [00:36] All right, folks, welcome to investing for beginners podcast. This is episode 81 tonight. We’re going to do something different for us tonight. We’re going to play you an audio clip and then we’re going to talk a little bit about it. So Andrew and I have talked a lot about how we choose companies, where we find her ideas and things of that nature. And tonight I thought we would go back and show you the original source where we’ve gotten our ideas from and so I’m going to have you listened to an audio clip from Charlie Munger and he’s going to talk about is four filters for choosing an investment. [01:09] We have to deal with things that we’re capable of understanding and then once we’re over that filter we have to have a business with some intrinsic characteristics that give it a durable competitive advantage and then of course we would vastly prefer a management in place with a lot of integrity and talent and finally, no matter how wonderful it is, it’s not worth an infinite price. So we have to have a price that makes sense and gives a margin of safety considering the natural vicissitudes of life. It’s a very simple set of ideas and the reason that our ideas have not spread faster is there to sample the professional classes, can’t justify their existence if that’s all I have to say. I mean it’s also obvious and so simple. What would they have to do with the rest of the semester? [02:14] Alright. So that was fascinating. Very interesting guy to listen to. Super smart and a little cranky. So it’s kind of fun at the end. They enter an hour chuckling about that earlier. It’s kind of comical, but. So Charlie being Charlie, so I thought we would break it down and talk a little bit about the different filters there and we can talk a little bit about those ideas and give you guys a little bit better idea of how to find companies to invest in. So filter number one, filter number one, it’s going to be develop an understanding of the business. Andrew, why don’t you chat a little bit about that and I’ll throw my two cents in on that. [02:55] Yeah, sure. So when I think about business, I think it should always be very, very simple. Business in general, uh, has a purpose. I think it gets lost a lot, especially in the stock market. People think I want to own this business, I want to buy it, I want to buy a piece of it and I want to sell it. Lay there for a higher price. And I think that’s so backwards. I think you buy a business because you want the profits from it. You want this business to make profits and you want to keep some of those profits and that&#8...
November 21, 2018
Announcer:                           00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                  00:34                                    All right folks, Welcome to the Investing for  Beginners podcast. This is episode 80 tonight. We’re going to do something kind of different. A lot of fun. I think this is good. That’d be really interesting. So Andrew took a deep dive into where the 10 percent of returns of the s and p over the last 80 years comes from. And tonight we’re going to talk about the individual components that make up that 10 percent and kind of where it comes from. Dave:                                  01:00                     I thought this was really kind of fascinating and Andrew, a lot of great work getting this together. So I’m going to go ahead and turn it over to him and we’re going to chat a little bit about it. Andrew:                              01:10                     Yeah, thanks Dave. I guess that’s a good disclaimer, right? That A. I did a lot of work and be speculation on my part. Right. Fair enough. Idea and running with it. Yeah. Fair enough. So there’s no academic sources for this other than Google, so don’t come at me with their pitch forks, but I was always, you know, I’m curious. Andrew:                              01:34                     It’s something you hear all the time, right? People talk about what’s the average return I can expect from the stock market and it’s been around 10 percent a year for over 80 years, like they’ve mentioned. And you know, you hear a 10 percent, you hear seven percent and seven percent is just the return with inflation taken out because inflation is also been pretty constant, pretty consistent around three percent a year. So it makes for a good kind of estimation, right? If you’re thinking about where are my finances going to go in the future, how am I going to plan and what’s like a reasonable, what are reasonable expectations? You know, I think to think that you could be an average person and become more rich than Jeff Bezos just because you’re going to be a stock market genius. I think that’s obviously absurd, but at the same time it’s not absurd to think that over a long enough time period with consistent deposits and even decent or just average returns from the stock market that you can make a quite a bit of a fortune where it can change your life over the very long term. Andrew:                              02:47                     And so if we can kind of ...
November 14, 2018
Announcer:                        00:00                     You’re tuned in to the investing for beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom begins now. Dave:                                    00:36                     Welcome to Investing for Beginners podcast. This is episode 79 tonight. Andrew and I back by popular demand are going to talk about dollar cost averaging. Talked a lot about this before, but we have gotten a lot of questions about it recently and we thought maybe we would dedicate an episode to it so we could help you guys a little learn bit more about this wonderful strategy that you could use to help with your investing. So Andrew, why don’t you talk a little bit about this and we’ll just kind of go back and forth. Dave:                                    01:06                     Yeah, sure. So most basic definition of dollar cost averaging as you set aside a certain amount each month and you’re going to put that into the stock market. So why you want to do that? A, it builds a habit B. It’s something that happens kind of in the background and so you’re structuring not only your investing but your personal finances to, to work in the background without any sort of input needed from you, especially if you can do like an auto auto draft or an auto transfer from, from a checking account or something and you can just be making progress with your investing no matter what happens with the market and no mother, no matter what you’re doing with your personal situation. The rich dad poor. That mantra was always pay yourself first. And so by having a dollar cost averaging strategy in place, that’s a way you can do it. Dave:                                    02:05                     And a way that, again, you can make progress and start to really make your money compound over time. Everybody wishes that they can get into the market and time it perfectly and it looks so easy in hindsight. Um, and as we’re definitely seeing now as we’re recording this, at the end of October 2018, and that’s been a really rough month for the stock market. A lot of people kind of yelling at each other. If you go on twitter, the presidency that people and people are yelling at the president, uh, and there’s just a lot going on and if this, so this is like one of the best times to have a strategy, adopt something like a dollar cost averaging plan in place because it’s when things are, is when you want it the most is because it’s fine. It can also be the most beneficial to you over the long term. Dave:                                    03:08                     Yeah, I totally agree. And the thing that I love about what we’re talking about tonight is with the market being so volatile over the last month or so,
November 7, 2018
Announcer:                           00:00                     You’re tuned in to the investing for beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew and Dave, to decode industry jargon, silence crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:35                     All right, folks, welcome to investing for beginners episode 79 tonight. Andrew and I are going to talk about moats, competitive, both business advantages, all the things you look for in a great business, and we’re going to talk a little bit about some of the ins and outs of those as well as some things to look out for and how you can find great companies with moats. So Andrew, why don’t you go ahead and start us off and talk a little bit about moats. Andrew:                              01:00                     Yeah, let’s do it. Shout out to Warren Buffett, right? He kind of came up with this idea. What’s a moat, other than the margin of safety. I don’t know if they use that for the margin of safety metaphor also, but you know, uh, I’m assuming most of you don’t have castles and don’t have a moat. So we’ll explain that real quick. Uh, if you had a castle, your try the defendant against attackers who might be pounding at your walls. So if you build a moat and you fill it with water, they’re going to have to, although I guess swim across and you can pick them off. Andrew:                              01:35                     And so that helps you stay competitive, right? It will help a business stay in business. And so it only makes sense if you can find the businesses that are the most competitive, those will tend to have the best results. And so they all tend to take up more market share, be able to get more profits, and that in turn leads to more returns for the investors. So buffets talked about different types of Moats, uh, some of the ones he looks for. There are a couple of other ones I think we can kind of throw in the mix there, and I’m sure he looks at that stuff to a first on the list. Let’s talk about pricing power. So the kind of logic behind this one is when you have a business that you’re able to increase the price without the, without losing sales, then you have pricing power. And that’s a very, very strong moat. Andrew:                              02:36                     Easy example, simple example of this, was one of Buffett’s first and most successful investments that the city ever had. It was, I don’t know if it was called the Washington Post or fills a different, it was, it was a publishing company and because they had distribution to whatever cities they were servicing, they, they essentially had to, had a monopoly on the, on those select areas. And so because they were the only newspaper in town, they were able to raise their prices, and people will continue buying them.
October 31, 2018
Dave:                                    00:35                     Welcome to episode 77 tonight. Andrew and I are going to talk about a stock selling theory. Three strikes. You’re out. Andrew has some thoughts on selling a stock and you wanted to share them with you, so we’re going to go ahead and start us off. Andrew, why don’t you tell us your ideas. Andrew:                              00:53                     Should I really? Does anybody want to hear them? I think they do. Okay. I will. I’m God this cold email today. I want us to share it because it’s inspiring. A email from Renee says, Dave:                                    01:08                     I just got into investing maybe 10 days ago and they’re already listened to around 10 podcast. Keep up the good work. Dave:                                    01:14                     Those are the kinds of things I love to hear. It fires me up a 10 day brand new investor. That might be. That might break our record as far as recorded record of being public. I don’t know if some of these beaten that. That’s pretty cool. It is. So keep those coming. Uh, that fires me up to get me a recording on an episode like today. Andrew:                              01:40                     But you know, we want to talk about selling a. We talked previously in episode 65 a. If you go back and listen to the archives, I talked about how my approach evolved a bit. When I went back, I looked back at the history of some of the buys and sells I made through the Eli, their portfolio and Ivy. I used to break up the portfolio into two portions. I had the regular portion and the dividend fortress portion. I still have those two sections kinda a segregated off, but I had trailing stops on the regular portion. And in episode 65 I talked about why I no longer use trailing stops. Andrew:                              02:33                     Kind of a cliff notes on that was I found that because the way I picked stocks is very, very conservative, very, very much so. Margin of safety, emphasis on the safety. A lot of these companies with strong balance sheets, maybe not explosive growth that leads the market, but Kinda just plugs along slowly but surely and quietly creating profits and with them is that grow over time and trading at prices that make them not popular. Right? So already by that, by that kind of definition, they’re not going to have momentum at least a start. And so what I found, looking back at some of the stock picks I had, I had several where if I would have not, you know, if I would have not applied the trailing stop if I were the let the stock run, than I would have actually had much higher performance. And that was a pretty consistent trend I noticed through several years of data. So, uh, coming up on, oh,
October 17, 2018
Welcome to Investing for Beginners pocket and this is episode 76. Tonight Andrew and I are going to do something a little different for us, we’re going to talk about some fun predictions. We’re going to go off the radar and off the range a little bit and talk about some upcoming predictions we think might happen and so we can give you an idea of what kind of great prognosticators we are now. Well let’s talk a little bit about some stock market stuff maybe a baseball thing or two and just kind of have a little fun so Andrew why don’t you go ahead and start us off a little chat a little bit. Andrew: all right you mentioned baseball obviously we’re recording this and there’s a game on so before we get into the stock market stuff I want to know who do you think is going to win the World Series this year? We have to give a context if you’re listening this in the future right now there’s the Dodgers the Braves the Rockies and Milwaukee yes that that’s kind of crazy that’s./ I don’t remember the last time they were in the playoffs with I don’t know where that is just kidding killing and then I’m al there’s Boston New York that’s turned out to be really cool series they were always big rivals. And you’ll have to help me on the other two al teams us the Astros and the Indians that’s right of course the Astros yeah so he’s going to take it it’s going to be Astros again I’m sorry to say I know that funds will in a year but yeah I think it’s I think it might come down to the Astros and the Dodgers and World Series again and I think the Astros will take it again. Andrew: I mean the team didn’t change it all right. Dave: so not a lot but they did pick up a couple new pitchers that helped them huge Gerrit Cole has been monstrous and Verlander has been amazing all season and yeah they got some they got their bullpens much improved and they’re good team they’re really good team. Andrew: well I want I wonder what kind of pitcher Cole is because if he doesn’t pitch well when the balls are juiced knock knocking clean. they did this thing where I don’t know last year those record for most home runs hit in the World Series ever saw their speculation and in the conspiracy theorists area that the balls are juiced and it just so happened that certain pitches don’t do well when the balls are made different with different characteristics. And surprise some of the pictures that the Dodger and on the Dodgers I didn’t do well have pitches that would be affected by it so I don’t know what kind of picture pitcher he is I’m sure you probably know that’s something random I I’m sure like a baseball expert when now. I don’t know obviously I’m big on Dodgers I think this is our year I think our righty power is really good and we have a couple key pieces we didn’t have last year it’s. Dave: very true yeah it’s I didn’t say it to be easy but I think it’ll be fun to watch for sure Dodgers are playing great  at the end of the season so it’s could be a lot of fun. Although I will say that the Yankees I think are going to be tough if they get by Boston which I think they probably can that will be a that will be a very fun series between the Astros new Yankees because they he’s got a lot of power it’s just crazy this was juggling Sanchez and Stanton oh man. Andrew: it’s good for baseball when the Yankees are on top it is it is for yep America I guess yeah I get flashbacks of George Bush yes good for baseball good for America yep. Speaking of America and the bull market we are in do you what do you think about the bull market moving forward that’s kind of the thing that whenever you turn on CNBC or any sort of media outlet they always ki...
October 10, 2018
Welcome to Investing for Beginners podcast this is episode 75. Tonight Andrew and I are going to answer some listener questions. We got some great questions in the last few weeks and we wanted to take a few minutes to go ahead and answer those on the air for you guys. So Andrew why don’t you go ahead and start us off there big guy. Andrew: all right sounds good. I’m going to start us off with wasn’t the question but it was a cool comment and it’s great to hear and hopefully some of you guys can relate to where she was where she is now give you some inspiration so this is from Shannon she says: Hi Andrew, just wanted to say thank you so much for the podcast I was left feeling pretty powerless following my most recent meeting with my financial adviser who handles my retirement account. So I vowed to learn more about investments and that is when I came across your podcast I’ve learned so much and started my own account in addition to my retirement account and I’m having so much fun. I love that it is a constant and endless learning process I am surprised at how many of my female friends are in the same position I am and really know nothing about where their money is going. Anyways I just wanted to say thanks for giving me some power back over my money thanks Shannon That’s really cool to hear and hopefully other people who might be struggling or feeling hopeless can find the inspiration to try to learn something and get yourself from feeling powerless to feeling excited.  This next question here is from Jake he says Hi I’ve been listening to your podcast for a few weeks and I’m about halfway through the episodes I’ve heard you talk about buying US companies only but I’m a little unclear if you mean US companies only our companies are they’re traded the US markets. Gives a good example here he says I’ve been looking at ticker symbol SHI traded on the NYSE the company seems to be a great value based on most of the parameters I have checked but I’m a little hesitant given that it is a Chinese company. My question is should I keep my scope to US companies only or companies other traded in the US markets any input would be great I really enjoy the content and I’m excited about getting into the market and building some wealth for the future take care Jake. So when I talk about buying US stocks only I definitely am talking about those which are not in the situation as such I is so a lot of international stocks will trade on the New York Stock Exchange and that can be an option for you. I personally only invest in US stocks and I’ve talked about that before you can definitely look that up in the archives. Taxes being a big reason and the other big reason is the SEC will not audit any of the financials for companies if they’re from a different country. Even though they do trade on the NYSE they won’t report the same as US companies will and so those tend to be more stringent and restrictive and better chance that oversight that there’s going to be less errors for the financials. and then and so you’re hopefully getting more accurate picture so for example if you go on SEC.gov which is where you look up annual reports 10k is 10 Q’s quarterly reports. You’ll see that SHI doesn’t have any 10 KS all they have are these 6 KS and 20 FS which I’m not too sure about those I don’t have any expertise in kind of investing with those. The other big thing is when you have the reason why I’m so confident and it’s not just because I’m like extremely patriotic right. It’s also because of the fact that the US makes up the majority of the market cap of the world so the US stock market is very huge even though you hear stories about other stock markets and a lot of growth obviously in China and stuff but when you ...
September 28, 2018
Welcome to Investing for Beginners podcast this episode 74. Tonight we’re going to talk about potential investor problems when examining the history of the market. Andrew has been on a bit of a history bent lately and I’m a big fan of history and I love learning more stuff about what has happened in the past. Because that can always help us in the future when we make decisions those who fail to learn from the past are bound to fail in the future. So go ahead and starting off Andrew why don’t you go ahead and talk up to us a little bit about short time periods are valueless. Andrew: yeah so I think this is a nice kind of follow-up to last week’s because we kind of examines the same type of thing right. a lot of studies academic studies about the stock market are looking at what happened in the past and let’s see if we can find a trend a correlation and maybe use that to have better success in the future. And so we kind of focus in on like the acted the academic part of the particular problems that can arise when you’re looking at particular studies and then how they’re doing that. Now we can kind of look also how people like you and I the average investor might do kind of similar things and this is particularly common with beginners if you’re not putting thought into this and how it can affect what kind of decisions you’re making then  you might not even realize you’re making these kinds of mistakes. I mentioned last week I’m reading this book called bull it’s talking about the history of some of the bull markets right now I’m focused on the bull market of the 90s. And it’s cool to like see the book puts yourself in the shoes of some of these people as they were living it in real time. You had and I’m blanking on the name of this I believe she was a she was an analyst. basically she this was you have to put yourself again in the 90s you had the internet really kind of coming into the mainstream and it was really changing the whole business world and so she really kind of tied herself to technology she was an analyst who really covered technology stocks. And as adds a lot of these IPOs a lot of investment bankers are making huge sums I think there was one guy it said something where he made like 300 million dollars a year and he was kind of like a leader of one of the companies like a Morgan Stanley or Goldman Sachs or their these investment banks they’re helping these small companies go public obviously getting the Commission’s off of that. And so a lot of money was being made and a lot of people like this analysts were good at picking out the winners and really kind of bringing the stocks that were going from IPO to into the market and then having like relative success in the business world which would translate to massive success on Wall Street particularly in this time period because there’s just so much money going around. And you had the Fed cutting interest rates just flooding the market with liquidity so a lot of different factors that were leading up to everything that you saw in the 90s and that finally bubbled up and crashed in 2000-2001. But this analyst became like a great expert and she became so bullish with technology stocks she produced this like three hundred page report and the book said that a six or eight page report at  on Wall Street was considered very extensive. So she went crazy with this and I think it said something about the future of the Internet or she was essentially covering like the Internet and new tech so she became very bullish. And became somewhat of a darling to the rest of the investment community and the rest of the mainstream. And so when she was bullish a lot of people trusted her and she was very good at what she did a lot of people trusted her and went bullish on a lot of these stocks and made money for ...
September 20, 2018
Welcome to Investing for Beginners podcast, this is episode 73. Tonight Andrew and I are going to talk about Wall Street study pitfalls, this is based on a book that Andrew is a big fan of by James O’Shaughnessy and we’re going to talk a little bit about some of the potential pitfalls that you may run into. We’re going to start off by talking about data mining and I think the easiest way that I could explain this was a metaphor that James used in the book and he talked about if you’re in Grand Central Station which is obviously a very large place with lots and lots of people around. If you find a specific area that has let’s say you go into one too but where one of the trains is running and you see 75 percent of the people there are blonde then you would be potentially thinking that hey everybody in Grand Central Station is 75 percent blonde and that’s not actually the case. It just happens to be at that particular time at that particular place that you find that and so the data mining is something that if you’re doing Studies on different Wall Street things you different factors of looking for let’s say you want to buy stocks on a Wednesday every 16th month well that’s not necessarily that’s data mining because you feel like you have to only buy stocks on a Wednesday on the 16th of the month. And that’s it could lead to a lot of pitfalls and okay that means dude but I mean. Andrew: that’s now uh that’s part of I think having tests that look at history you have to be very careful I think when it comes to studies in general and I’m sure you can extrapolate this to things outside of Wall Street and it’s very easy to take facts and weaponize them and make them sound like basically a way to advance your own agenda and you can manipulate statistics to do that. And so as investors who are looking at studies we like to talk about all the time on this podcast about how let’s learn from history.  History might not repeat it might look different every single time but we know that there are some core things are true history mostly rhymes. We have bear markets who have bull markets we have prosperity we have times where things tighten up credit expands creditor contracts these are things that we’ve observed over time and it’s recorded in written history. and so we can kind of see that this is how markets tend to work this is how human behavior tends to work and we can come up with a lot of different lessons from how this stuff all kind of works and we can use it in our investing. Something like data mining though is definitely a huge pitfall to be aware of. like you know I love that Grand Central Station metaphor if I were going let’s say I was a tourist to America and the first tourist thing I did was I went to an NBA game right and then if I just thought that the players on the court were a representative of the entire United States I would think everybody’s above six five. And you can do that and see that through a lot of different studies when it comes to Wall Street and you have to be really careful and look with a watchful eye. That hey there’s going to be things that you’re going to find out and this is true whether it’s a Wall Street study whether it’s something you’re kind of embarking on your own. And it’s very easy we talked to him a previous episode about biases and how it’s very easy for certain things to kind of skew your understanding of how the market really works based on your own skewed perception. We all view the world through our own unique lens and so it’s our own experiences and our own things and lessons we’ve learned that is tainting whatever conclusions were coming up with. It’s very important to have a skeptical eye with that and so on the one hand how we always talk about ...
September 13, 2018
Welcome to Investing for Beginners podcast, this is episode 72. Tonight Andrew and I are going to talk about shareholder yield, this is a term that I came across when I read a book by Meb Faber. One of my favorite podcasters, he’s a quant investor that runs a ETF that he’s a fantastic guy really interesting super smart and sometimes he can be a little technical. But he’s very interesting and he wrote some great books that are on Amazon and quite a few of them were actually free. So the book that we’re going to talk about tonight that we’re going to reference let me rephrase that is actually free and I will put the link to that in the show notes. If you guys want to check out a little more deep dive into what Andrew and I are going to be talking about tonight that’ll give you an opportunity to check that out so well then further ado Andrew once you go ahead and start us off and talk a little bit about shareholder yield and capital allocation. Andrew: yeah so shareholders yield a metric it’s a good kind of description for a metric where you’re essentially looking at a CEO management of a company and seeing how are they allocating capital. You have earnings that you get right profits up that these companies have and as we’ve mentioned in previous episodes two to three episodes ago these companies have various decisions that they can they have various purposes that they can use this cash that they have for. And so shareholders yield is a measure to evaluate that and it can identify companies if there’s a high shareholders yield can identify companies that are really rewarding shareholders giving a lot of that cash and giving it back to shareholders and it doesn’t have to be in the form of a dividend that’s why it’s different than like the dividend yield. You have essentially the five ways that they can pay back shareholders and so they can reinvest back in the company and that’s good if the business if the core business is growing they can do a an acquisition a merger and acquisition. Where you’re they’re buying another company hopefully saving money by combining operations and obviously growing earnings and revenues in that way. They can pay down debt they can repurchase shares we talked about that extensively with the share buybacks episode and they can pay dividends. What we’re going to talk about today I think really gives a nice little measure and a way that you can take it one step further right. So we took the time to really introduce these kind of things and talk about them from a theoretic level. Hopefully you were able to learn that if you haven’t listened to those two episodes I definitely recommend doing that. But understanding the how it works and what these things are and then now this is a good idea of how you can apply it and use it practically to find good businesses good stocks to buy. I really liked the book that Meb Faber wrote shareholder yield he had like really cool kind of metaphor about the way some investors will look at stocks so he talks about this concept some I don’t know it feels like a legend or just a story. but there’s six blind men right and they’re all told to touch this elephant and they’re told to describe what this elephant is what it feels like and then kind of make some conclusions based off of that. One blind man might touch the tusk one might touch the tail one might touch the side or the bottom of his belly and they all describe different things but neither of them not one of them if they’re all just touching this one place they’re not able to accurately describe the whole picture and so when it comes to investing and buying stocks a lot of investors can fall into that trap as w...
September 6, 2018
Welcome to the Investing for Beginners podcast episode 71. Today Dave is taking a break and I am taking over the reins. We have an interview for you today with somebody who has a really unique take on investing and it’s a cool little mix between investing and entrepreneurship. We have Greg Elfrink from Empire Flippers and what his company does is provide an outlet and a unique investing possibility and approach where like I said it kind of mends these two ideas of investing and entrepreneurship. And it quite literally is something that wasn’t available before the internet. This is something very new a new type of investment opportunity and for somebody who is particularly like me because I’m super passionate about entrepreneurship. I’m type A going to go out and spend way too many hours of my day kind of hustling and trying to make a secondary income and some of the who’s familiar with the online space is definitely this is a resource that you might be able to find useful for being creative and finding other investment opportunities. Greg welcome to the show thanks for coming on and thanks for joining us and giving us a couple ideas today. Greg: yeah thanks for having me Andrew I know this is probably going to be a bit different than your typical podcasts and like you said a relatively unique way of investing in creating a bigger thicker wealth machine for you in a kind of a different way not affected by the stock market and all that good stuff. Andrew: so yeah so I actually remember hearing about you guys I’ve mentioned Pat Flynn’s podcast on our podcast before. we’ve talked about passive income here and there so I heard about you guys on his podcast and I can’t remember if it was from him if it was for my guests but there’s something really cool you guys do and it’s essentially and you can correct me if I’m wrong or you’ll probably have a much more elegant way to put it than I do. But buying websites online or basically as businesses and then either working in them or kind of letting them run on their own and then collecting the income. Essentially buying a small business but you’re buying these websites online. Greg: yeah I mean that’s exactly it so what we do is we help people connect between the buyer and the seller and is it’s not always necessarily a website because it’s always a non-business but there’s a few business models on the internet that don’t really require a website which I know some weed sounds kind of weird. But like businesses we call them Amazon FBA so that’s like fulfilled by Amazon so that’s like an e-commerce business that’s using Amazon’s platform. So they don’t necessarily have a website but we’ve sold a ton of those businesses over the over the last two three years and obviously a bunch of websites as well. Andrew: okay yeah makes sense even that idea Amazon FBA is really new I don’t I don’t memory hearing about it like five years ago and then two or three years ago kind of everybody’s talking about it so that’s really good. Greg: for sure one of the interesting things too like even the concept of buying and selling on like businesses like you mentioned at the top it’s a pretty new concept I mean making money online is not even really 20 years old yet. There was some people doing it like in the 95 1995 and stuff but very few and far between and now we kind of reach this level where a lot of these businesses or are starting to mature as assets. So there’s an it’s a very interesting time so the buy and sell space still pretty young comparatively even two making money online. Andrew: all right so I know this might be unfair to you based on your experience or backgroun...
August 29, 2018
Welcome to Investing for Beginners podcast this is episode 70. Tonight Andrew and I are going to discuss risk, we’re going to talk about all the different types of risks there are with investing and we have a very interesting show coming up for you. So without any further ado I’m going to turn over to Andrew and he’s going to start us off. Andrew: yeah so when I think about risk and when many people define risk and whether you talk to investment advisor you talk to maybe an individual investor who is more experienced and kind of understand what the risks are when it comes to investing your money. Well there’s kind of like three major ones so we’ll discuss each of those and it’s very important to talk about risk and think about risk. If you go back to the very basic definition of an investment which I always love to refer to when I’m talking about dividends. But if you say investment 101 what is that it’s essentially money that you put it you put money at risk and in order to be compensated for that risk you have a reward you have gains you have an income stream and that’s essentially what an investment is. And that’s no matter how what kind of investment you’re making that’s going to be how it works even if you do something like as simple as lending money to somebody and charging them an interest rate there’s going to be risk there. There’s risks that you lose all your money because some of the skips town and then they don’t pay you those payments right. And so obviously our shows focus a lot on the stock market we’ll talk about the stock market risks and some of the various factors that maybe somebody who’s a little bit more green or if that’s the right term somebody more new to the market some of these not as educated they might not have thought about these different things. It’s important to think about them important to learn them but also important to have a solution right to be able to understand that there is risk but historically and moving forward there are different ways to mitigate that risk and it can help it can help your overall returns it can help the type of results that you will see from your investing. And so make sure that’s something that you’re thinking about and you are forming your strategy in order in order to fight those risks. The first one this is very common commonly talked about in finance it’s a market risk and so just the fact that you’re in the stock market in general you’re going to have market risk. Another way it’s kind of referred to as it’s called systemic risk and basically it’s the risk that you get for putting yourself into the system. This is something that you are not able to really have an easy solution to go against. So if you think about the other two risks so a big one is business risk and that’s the risk of a stock you’re owning of the company going bankrupt that’s called unsystematic risk and then you also have like interest rate risk. With market risk you can’t diversify your way out of it so for unsystematic risk this is business risk a business of any one stock losing a lot of value or even going bankrupt and you lose your whole investment. You can the way you counter that is by reinvesting I’m sorry not reinvesting uh the way you counter that is by diversifying if you have enough eggs in the basket and one goes bad one cracks at least you have those nine other eggs those 19 other eggs and so you still have a big part of your investment capital intact. With market risk you cannot diversify that away unless you spread out unless you put less money into the market so because it’s stock market risk away. You can essentially combat that is by holding different types of assets and so that...
August 22, 2018
Welcome to investing for beginners podcast this is episode 69, tonight Andrew and I are going to take a few minutes we’re going to answer some listener questions. We got some great questions over the last couple weeks, and we wanted to take a few moments to read through those and answer those on the air, so without any further ado I’m going to turn it over to my friend Andrew, and he’s going to go ahead and start us off. Andrew: yep cool so let’s get going got an email it says. Hi, Andrew and Dave thank you so much for your podcast which is very helpful to me as a beginner I also enjoyed Andrews free ebook I feel like both of you guys have a lot of useful insight for people trying to get into the market as beginners. My question is a bit specific and then is about employees stock purchase plans ESPP particularly the one that my employer. I’m not going to say which employer he has. But let’s see he says the cool thing about the ESPP is that in addition to being a no-cost except for on sales which I wouldn’t plan on regularly doing Drip plan I get a 15% discount on the market price of the stock at the time of the buy for every buy. Also get the discount when shares are purchased with automatically reinvested dividends then when I stop then when I sell the stock I get the full market price at the time of the sell for taxes. The capital gain would be the same would be the sale price plus the disc – the discounted price not the market rate at the time of the buy. I still get taxed on the bonus 15%, and he says while this sounds like a great deal I have been hesitant to participate. The main reason is simply that I am unsure as to whether the stock is a good investment, so and then he asks he talks about the particular stock in some of the characteristics in there. He also says the other obvious reason is that it will limit my ability to diversify properly since I have a pretty limited amount of extra cash for long-term investment. I do participate in my employers 401k as well which is also great matches 50 percent up to eight percent though doesn’t offer much flexibility regarding which funds to choose from. I also have a small amount and other dividend stocks and ETFs that’s all meant for the long term. He talks about the stock how he’s worried about the price crashing he says now I’m not worried about the stock price crashing he’s just wondering if there are better stocks out there including the discount. Wondering what my thoughts were on this should I start investing a small amount in the ESPP see how that goes or do you think definitely stay away with the debt-to-equity so high thanks so much. Jay from Boston This is a really great question and I know for two of the companies I’ve worked for they offer ESPP it’s going to be different depending on your company, and the terms are going to be different so obviously it’s very important to understand what those terms are first for those of you who don’t know what ESPP is generally from what I’ve heard and seen and obviously in this question as well is they’ll give you as an employee you will get an option to buy stock in the company. What you tend to see they will incentivize you to buy stock in the company by giving you some sort of discount on it, so I’ve heard of 15% that’s what I’ve seen Jay talked about 15% here. What that means is they take your money out of your paycheck just like a 401k and then they will buy shares for you at the certain purchase date and then so let’s say if the company that you’re working at their stock is trading that like ten dollars you would get 15% off of that. so essentially I apologize because I am not thinking of the math so 15% a dollar 50 so you’d be able to buy the stock at 850 even though the stocks trading that 10...
August 17, 2018
Welcome to Investing for Beginners podcast, this is episode 68. Tonight Andrew and I are going to talk about the balance sheet and give a kind of a brief overview of that. We’re also going to talk a little bit about some ratios that you can derive from the balance sheet. This will be a great primer that you can use to look at 10ks, 10-qs and also kind of combine it with the cash flow statement analysis that we did a while back. Without any further ado I’m going to turn it over to Andrew and he’s going to start us off. Andrew: so that cash flow statement episode you’re talking about that’s episode 17. We went super in-depth into that one but it was a good overview on the different financial statements and some of the key things you can kind of pullout from that. Last week we talked about basically earnings and what companies do when they get earnings. We talked about how they can reinvest in the business they can hold the cash they can pay out dividends or they can do they can do share buybacks. The other thing they could do which I forgot to mention is they can use that cash and use those earnings to pay down debt. And so I think that’s something we should focus on today. I am very anti debt I don’t like to invest in businesses that load on a lot of debt and so on the flip side of that when I see a stock where management has decided to aggressively pay down their debt. They see using current profits you’re essentially you know not necessarily worrying too much about the short-term you’re really taking a long-term approach and so I really like that one that. When the stock is doing them the last eletter pick that just went out yesterday had a stock that really did that aggressively. And so that’s something I like to see and I’ll kind of give an overview right so what the bounce she is how do you look at the bounce she obviously it’s very confusing but is there a way to for somebody who’s not an accountant some of these just an everyday person can they really understand what a balance she is I believe you can hopefully this episode will help you do that. So turn it back to you Dave if you could break down the balance sheet and give us the simplest overview of what it is like if I had to pick three lines from the balance sheet that I want to know which they would be and why. Dave: three main I guess compartments or you know yeah compartments is probably the easiest way for me to look at it it’s simply both goes down to assets liabilities and shareholders’ equity at a specific point in time. So when you look at a balance sheet it’s actually a snapshot of what the company owns what it owes and what its worth at that particular time. So if we pick today which is August 2nd then the balance sheet of you know Company A would be have all those items listed in it. So assets are simply things that generate money for the company whether it’s products whether its inventory whether it’s a physical building there’s all these different aspects that you can really dive into. Liabilities is what you owe people so when you buy things you order stuff and you wait 30 days 60 days 90 days whatever it may be whatever your contract is to pay those back those are liabilities because those are monies that you have that you have to give to somebody for our product or service that you’ve purchased. And then shareholders equity is what the equity of the company is worth and all those things add up into the balance sheet. Now part of the sheet so when you look at a balance sheet the first thing you’re going to see are all the different assets and that includes cash and cash equivalents and all the other assets that we talked about.
August 7, 2018
Welcome to Investing for Beginners podcast this is episode 67. tonight Andrew and I are going to talk about share buybacks, this has been a hot topic on Wall Street lately and Andrew and I wanted to do a little deep dive into share buybacks and talk a little 101 about how they work what they are and how they can benefit the company and you. Without any further ado I’m going to turn over to my friend Andrew and he’s going to start us off. Andrew: yeah love it. I feel like it was meant to be right well media talking all about buybacks obviously a big impact from the tax cuts that Trump did. So it’s very timely and it’s also good segue from last week’s topic. so if you remember last week we talked about owners earnings and how that can be a better way to kind of calculate how a company is using not only what’s the company earning from the core business whether its profits. But also how is it allocating those profits once it has once the company has that earnings so owners earnings is a way to do that and one way that companies allocate cash once they receive those profits is through share buybacks and so that’s what we’re going to cover today. You’ll hear called several different things share repurchases stock buybacks share buybacks it’s all referring to the same thing. So if we really get down to like the base route of what share buybacks is it’s simply the company taking cash and buying back shares. What that means is they’re reducing the shares outstanding what that does for investors who already own the stock is it pushes everything up so it will push the market cap up because the company is buying these shares it’s going to push the price up right so I’m sorry the market cap stays the same the price goes up because the shares go down and then you also get anything that’s valued on the per share basis will go up so earnings per share arguably Wall Street’s biggest focus that goes up because now you have less shares and book value per share goes up cash per share goes up all those things go up. And so Wall Street tends to like share buybacks and it’s kind of debatable whether it’s good or not for a company it’s very contextual but before we get too deep into like the concepts between whether it’s good or bad or whether it’s optimal I want to share a couple of articles that I’ve seen that are recent about share buybacks and so one of them here is talking about this is July 10th recording this end of July. Tax cut triggers 437 billion dollar explosion of stock buybacks so there’s I feel like a general misunderstanding in the public of share buybacks and how they impact a company. Because a lot of I don’t want to get political but a lot of the critics of the tax cuts they will argue that the tax cuts are only tax cuts for the wealthy and they will also say that workers are not being benefited by it. I think we do need to address those things because there’s no doubt that once you understand how the stock market works how stocks work that share buybacks are almost all the time great for investors great for the people involved in the company and it’s great for the economy overall. If we can understand some of the more intricate details of share buybacks then we can understand exactly why that is the case so you have to think first off when we’re talking about the wealthy it is true they say the top and this is coming from the this article from CNN. The top 10% of households owned 84% of the stocks in 2016. What you have to understand is that’s more of a byproduct of a capitalist society if you want to have small business owners what’s the draw for a small business owner to open the business? If they let’s say open the pizza shop and they have to hire ten employees in order to run the pizza s...
July 25, 2018
Welcome to Investing for Beginners podcast, this is episode 66. Today we’re going to talk about several different topics, we’re going to talk a little bit about owners earnings. Which is one of Warren Buffett’s favorite formulas, if you will, or thoughts and ideas on how he looks at a business. And we’re also going to talk a little bit about options and before we start talking about those I’d like to tell you about a book I just read recently. Just a quick note, there are several affiliate links sprinkled throughout the transcript. It’s called F Wall Street and it was a fantastic book it was very easy to read and it is not full of jargon if you will. There’s not lots of technical terms in there. He’s very good at explaining and breaking down different ideas like owners earnings. For example, he also talks a little bit about intrinsic value. He also talks about certain types of cash flows. But again it’s not super jargon there’s not a lot of math and even the math that’s in there is super simple and the other thing that’s kind of cool about it is he comes from it as an angle he’s a quote unquote insider he’s somebody that works in the business he buys and sells stocks for people that want to invest. But he comes at it as an angle of everybody in Wall Street’s out to get something from you and he’s not and it’s very his language is very it’s not rough but he’s very sarcastic is probably the best way of putting it. Especially attitude yeah thank you that’s the better way of putting it yeah there’s a lot of attitude and he’s definitely coming in at have added advantage of looking at Wall Street as sort of the enemy and when I say Wall Street he’s really talking more about the big funds and people that are out there trying to hustle as opposed to somebody’s they’re trying to help you invest your money and it’s a great book I really enjoyed it it’s not very long it’s about 250 pages give or take and it’s very fascinating. I would highly recommend it it’s something that something new that I came across. I know Andrew would read it recently and he never you never sale yours that I didn’t read a little bit of it uh and uh he had recommended it to me based on his partial reading of it and I really enjoyed you didn’t really recommends that book for Jae Jun he does and I think he gets you can tell by some of his writing that he gets some of his ideas from that book so it was pretty cool so Andrew why don’t you start us off talk a little bit about owners earnings and we’ll have a little roundtable on that and we’ll talk about options. Andrew: yeah sounds good so  what’s the purpose of owners earnings Warren Buffett was the first one to really kind of popularize this idea and so I guess to kind of explain owners earnings we need to explain what earnings are and at the risk of getting too technical need to explain how earnings is kind of tabulated. Obviously earnings drives Wall Street right so when you see earnings growth that’s what the analysts are all focused on they’re looking at revenue growth earnings growth and that tends to make the stock either pop up or dive down and sometimes it can happen even though it’s not logical right so a company could do better than their expectations with earnings growth and still have the stock pop up or up or down. That’s kind of a discussion for another day however the basic idea of earnings growth makes a business grow once you have more earnings you have more profit you can reinvest in the business yo...
July 17, 2018
Welcome to Investing for Beginners podcast this is episode 65. Tonight Andrew and I are going to answer some readers’ questions, we’ve gotten some fantastic questions over the last few weeks and Andrew and I wanted to take a few minutes to go ahead and answer those. I’m going to go ahead and start off with the first one so bear with me reading this so I have. Hi Andrew, I stumbled across yours and Dave’s podcast of the search for the ultimate truth and knowledge of investing. I have dabbled in investing, more gambling with Forex and options with a couple of stocks not good ones just losers. The thing I’m finding is there is so much info out there or leading you this way in that so the question I have for you is now that you’ve been investing for a while I’m probably still learning along the way if you had to start again or start your daughter if she was of age for investing of her own like fill town and his daughter where would you start and what steps would you suggest? I understand the concepts of Valle investing I believe by a good company for less than what it’s worth for a margin of safety and look for good businesses that I can understand. I’ve just finished listening to the value investor from Graham but the issue I seem to run into is it valuation of businesses or should I start looking somewhere else. I know you’ve both put out good info for stocks but how do you go about finding those I forgot to say thank you for both of you from probably every new investor for trying to help people realize that there is a way to have money for retirement. Tom Well Tom you’re welcome this is why we do what we do we love helping people and that’s a lot of fun to talk about this and Andrew and I get to geek out on air. Let’s see let me take some of these questions for you. so if I had to start we’ve talked a little bit about this but I’ll go back and talk a little bit about this again if I had to start again or start my daughter when she was of age oh I feel town on his daughter if you guys have not checked out that’s Invested fill town and his daughter Danielle talked a lot about investing Daniella is a newbie and fill town is a value investor and of the like that we talked about and it’s kind of a great interplay between he and his daughter is their he’s trying to teach her all about Wall Street and everything. so it’s kind of a it’s a cool podcast if you want to check it out. If I wanted to start Sadie off with investing I would just basically sit her down and talk about buying companies and so many people look at investing as buying a stock as a piece of paper or a ticker symbol on their computer or their iPad or their phone. And I would talk more about what you’re actually buying you’re actually buying a piece of the business and go about talking about how the business makes money and teacher the ways of businessman. Warren Buffett always says that he’s a great investor because he’s a great businessman he talks a lot about and kind of vice versa he’s a great businessman because his investor and they really go lockstep hand-in-hand with each other the more you learn about business and how they operate and how they make money you become much a better investor because as I’ve said before our we’re buying businesses. I would start with that and learning more about how businesses make money and where their revenue comes from and just learning the ins and outs of the business. And I’m not necessarily talking about learning how to read a 10k that I think would be overwhelming and kind of boring and I think that would put people off. But if you really started off with looking at things that you go and buy on a regular basis like Starbucks and have a conversation about  how the store makes...
July 6, 2018
Welcome to Investing for Beginners podcast this is episode 64. Tonight we’re going to conclude our series on personal finance, this is episode 105 of our little series here. Andrew’s going to start us off we’re going to talk a little bit of passive income so Andrew go ahead and take it away. Andrew: so I really wanted to talk about this because I feel like a discussion on personal finance isn’t complete especially in my own situation if we don’t talk about creating passive income. By far creating a passive income stream has been the most if not influential is not the right word but it has had the greatest impact on my own trajectory my own path to financial freedom and that’s something that we definitely need to cover because I think it can be that way for a lot of people too if they’re willing to put in the work. I understand like I have a very entrepreneurial mindset kind of like a workaholic type a type person so I understand that maybe this episode isn’t going to apply for everyone and that’s fine and if that’s the case for you and you want to just focus on the investing side and that’s 100% okay and we’ll get back to it like we normally do. However we are talking about personal finance I am super passionate about creating passive income and when you’re doing investing, in general, you create a passive income that should be the goal with dividends and so obviously you need money to make money you can start small like we always talk about you grow that little income stream from dividends and your growth over time you reinvest it continues to get larger and larger and larger. If you couldn’t add this element of passive income whether that’s picking up a side hustle, getting a second job where at whatever that entails that can also compound for you over the long term. Because now obviously you’re getting free money that you can invest for example if you have all your bills set up you have your budget set up like we talked about in the previous personal finance episode. Then you could have a side hustle or a second job where all that money can go straight to your investments and it can really grow at a much-accelerated rate. And so the thing the things that I like about passive income and this is going to be something where I guess if you’re doing like a second job it doesn’t necessarily apply. And I don’t want to speak to like every single type of passive income you could create because if that’s something you’re interested in I highly recommend Pat Flynn Smart Passive Income podcast. But I think there are some things I’ve seen success with that I believe both Dave and I can shed some light on today experiences is often the best teacher and I still believe like the way I found success is something that’s very early in the game so to say and there’s a lot of opportunity for people to kind of pick up that torch and continue with on. And that might be kind of a stupid thing for me to say because I’m creating competitors as I say it but I’ve had like Porter Stanberry for example. He’s he has a podcast and I remember something he said that really stood out to me was the idea that the thing with investing I mean you can only create and I want to put words in his mouth. But the way the way I kind of took out of it was you can only create so much from whatever capital you have so even if we were to say we’re the best investor in the world right let’s say you’re Warren Buffett and you’re able to compound it like an insane twenty-two percent a year or something like that. If you’re broke is a joke and you’ve got five dollars to your name compounding of twenty-two percent a year isn’t going to make you a millionaire so I can make you a billionaire it won’...
June 26, 2018
Welcome to investing for beginners podcast. this is episode 63 tonight we’re going to continue our discussion on personal finance, this is personal finance 104 and tonight we’re going to talk about designing your investment lifestyle. We’re going to talk a little about picking an investment strategy and different areas of that and I know Andrew had some things you wanted to start off with so when I turn it over to him. Andrew: yes so last week we talked about budgeting the next natural step is figuring out what to do once you have that extra money. so like they have mentioned you’re going to want to have to pick an investment strategy you want to look around and really try to understand you not just pick a strategy just off the onset just because it sounds good. But try to understand what’s going to fit so that might that might entail looking at a couple different things before you really make a decision and I’ll kind of explain why. But there’s a lot of different ways you can invest money we covered this in our back to the basics part 3 or we talked about stocks versus other investments we’ve talked in the past about how we’re both adamant value investors and why we kind of why we tilt that way and why we recommend that investors try to model portfolio a base approach trying to buy low trying to buy businesses that are trading at a discount to their intrinsic value. I don’t have what episode that is off the top of my head but we did talk about what kind of options you have as versus any other sort of investment I also talked about like value machine versus growth investing versus whatever other kind of strategies are out there so those are two episodes to help a broader base and a broader sense of kind of what all your options are out there. I wanted to start off though with a couple of things that maybe if I talked about it will help give like a mindset shift on why it is important to pick a strategy in this way and to kind of understand and conceptualize what I’m about to say. Basically when you break down investing there’s two forms of it you have passive investing and active investing. So passive investing is the type of vesting that’s usually recommended by investment professionals if you go see a financial advisor they’ll usually recommend that as well and basically what that means is you’re just buying stocks and then not touching them that’s the best way to do passive strategy. And it usually entails buying like an index fund and just passively holding it and not touching it so if a passive strategy fits your personality if it’s something you’re able to stick to then it can be a very great option for you. The other side of that is active and what active means is you’re trying to pick stocks you might be selling in and out you might not be a buying hold forever and although at least personally I really try to talk about buying stocks and holding them as long as you can ideally forever. I also understand that stocks go bankrupt and so that’s why I always talk about the bankruptcy research the negative earnings discussions I went to sell. But in general you want to try that hold your positions as long as possible so that’s what active is you’re buying individual stocks you’re making stock selections that way then you’re also making decisions on the opposite side of how long you’re staying in these stocks when you’re getting now how long when you’re getting down when you’re staying in and all those sorts of things. And I do believe like for the majority of investors that having a passive strategy is the best way to go. However I see a huge problem and I’ve kind of talked about this before but a huge problem with the idea that you’re just going to tell people...
June 19, 2018
Welcome to Investing for Beginners podcast this is episode 62. Tonight Andrew and I are going to continue our series on personal finance. Tonight we’re going to talk about managing personal cash flow. Andrew why don’t you go ahead and start us off and we’ll chat a little bit between each other. Andrew: all right let me get some wild and crazy ideas out there cool. how am I put this nicely so there is a term in the fitness world that is called F around itis and it’s made popular by a guy who runs Lean Gains site his name’s Martin Berkman and basically the whole it’s like a great blog post went viral that all those sorts of things and basically his big thing with the reason why so many people aren’t finding progress in the gym is because they’re they have this condition called F around itis. And it’s basically because when you’re going through the gym you’re trying to do everything you can but if you don’t sit down and write things down and track it and measure and see where your progress is going. Then you don’t actually make any progress and you end up just kind of spinning your wheels. Another business management guy’s name is Peter Drucker he has a quote and he says if you can’t measure it you can’t improve it. And so I think when we talk about personal finances and you really try to get to the bottom of figuring out how to improve how your personal finances are working because it’s all like kind of a chaotic mess. Everybody solutions going to be kind of different and that’s why you have the personal part in personal finance. However, there is that key point that you need to be tracking something and measuring something and so I think Dave and I can throw out some ideas of how we feel about measuring the way that your money is flowing through your life. But if you really want to make progress and improve a just to be aware of how your money situations moving this time goes on and beat to hopefully see that progress and just by measuring it and tracking it has a bi-effect of making that situation better for yourself. I definitely have what works for me when it comes to tracking my personal finances I’m sure Dave has the system and I’m sure you take 10 people off the street and whether they’re financially whether or not I’m sure everybody else has their own situation to their own system sorry. It’s going to be different hopefully we can just throw out some ideas and if it’s something that speaks to you then you can make it stick. But the whole point of this episode I think is that when it comes to your money you don’t want to have a frown that’s you don’t want to be just enough flailing your hands blindly you want to have a plan and you want to have measurements and you want to be tracking your progress. I know this is not some sort of straight linear path trust me it’s not like they say success is never a straight line there’s always bumps in the road and when you look at finances I think that applies 110%. I’ve definitely seen in my own life and I’m sure other people can speak to and relate to that as well. Just when you think you have things sore that something major always pops up around the corner but there are ways that we can still take on those obstacles and those challenges and still make progress moving forward I think the most important part of that is like what Dave says is managing your cash flow and having in my mind it’s budgeting but I think having any sort of measurement system in place is really the first and probably the most important step. Dave: I totally agree with what Andrew was saying I think if you can’t measure what you’re trying to improve on you’re never really going to prove upon something and I really like what his...
June 12, 2018
Welcome to Investing for Beginners podcast this is episode 61. We’re going to go ahead and talk a little bit about personal finance today. Andrew has a disclaimer he wanted to discuss before we get started so Andrew why don’t you go ahead and chat a little bit. Andrew: sure so real quick I know there’s like varying degrees of experience level with people who listen to us so I would say we’re going like super into the basics for the next couple of weeks. I would say if it’s stuff that’s going to kind of bore you or if it’s stuff that you already know I go through our archives and we get in swarmed the nitty-gritty in into the stocks and individual stocks and accounting and stuff like that in those. But Dave and I had a lot of fun last week talking about some of the basics and personal finance and figured we’d turn it into a little bit of a series. So we’re going to do we’re going to call last week’s personal finance 101, and we’ll call this one 102 and make a couple of episodes that way. There was a lot of fanfare when we did the back to the basics part 1 through 5 series, so this is going to be kind of similar but for personal finance and we’ll try to throw in some more advanced things, but I would say go through the archives. I know when I check out podcasts and some of the other ones there was a big one that I remember I listened through every single episode in the archive, and that helped me out, and I’ve done that for investing entrepreneurship and whenever there’s like a skill I wanted to learn. I always thought the archives were like a valuable resource and we got stuff on their blogs and stuff like that too if you are dying for content. But for now that’s where we’re going to head and yeah let’s talk about last week we were talking about some things that we would do some things we would say there were five-year-olds and try to give them some concept of money and making money investing money all those sorts of things. We talked about the importance of building the business building assets. But we didn’t say how to do that specifically, so I was going to say, Dave, what would you say is the first step if we do now want to take our discussion from last week and yep start building assets and how do we do that in the adult world. Dave: Well I think the easiest thing is to start a savings account that’s probably rule number one is to start saving money. Learning how to save money, and we talked a little bit about that last week with what we’re going to do with our daughters, and I know that I’ve talked to my daughter Sadie about that numerous times and she’s starting to kind of take to it. Last week when I gave her earnings she took two dollars of it and went ahead and set it aside and I’d even have to tell her that it was kind of cool. I think the first thing is setting up a savings account starting to save money and putting money aside whether you’re 14 years old or 24 years old I think that’s so critical to have extra money. There was a tweet going around earlier this week where there was a study done that said I think it was seventy-five percent of Americans have less than four hundred dollars in a quote-unquote emergency fund. So if your car breaks tire blows out you have some medical emergency, you break a tooth or something like that that you that the average American doesn’t have any money saved. And I can tell you from firsthand experience working in the banking world for those years that is right on the money there is lots and lots of people that have nothing they have no money saved that would have paycheck-to-paycheck. Some of some of it’s their own doing they live above their means but some people they just aren’t earning enough money,
June 5, 2018
Welcome to Investing for Beginners podcast this is episode 60. Tonight we’re going to talk about money lessons for our five-year-olds. Andrew and I both have younger daughters and we’re going to talk a little bit about money and what we would teach our kids if we wanted to teach them more about money and I thought I would go ahead and start off and talk a little bit about some of my experiences with my little girlie and kind of go from there. Just to kind of give you a little bit of background my daughter’s going to be six here very shortly and we go to Walmart a lot to go shopping and stuff and she always wants toys and she wants Toys Toys Toys more toys. My wife and I have been discussing about whether we should give her an allowance, whether she should earn it and kind of going back and forth on what we should do. And so I thought that I should have her to help her learn the value of money that I should give her some air quote jobs to earn the money that we give her every week. And so what I thought of was kind of creating basically three buckets. The way I do it is that I have a little chart that we created and Sadie, my daughter and I sat down and we went through everything and we came up with jobs that she could do things like emptying the dishwasher, dusting, helping us vacuum, sweeping the floor, getting dressed every day because that’s something she likes to do at this stage. All those things we came up with dollar amounts and why not so at the end every Sunday we look at the chart together and then we tally up her money and then we hand it over. And so instead of just giving her the money and just letting her kind of run wild with it and going to Walmart or Toys R Us who was going out of business sadly. Whether we do any of those things and just let her go run rampant and basically blow all the money. I thought about my life in how I kind of learned money and I love my parents to death but they didn’t teach me much about money and I kind of had to learn it the hard way and I after working in the bank for all those years I noticed that very much so people are really not taught money. They’re not taught how to use it what its value is how to earn it  how to save any of those kinds of things we all have to learn it the really hard way I’ll give you an example just recently when I was in another restaurant I was working in I was away from the restaurant for a bit and a vendor came in and I needed somebody to write the vendor a check and the other manager that was on duty was a younger guy and I called him up as a hey can you write this check out for this vendor and he’s like no I can’t I’m like why he said I don’t know how to write a check and I thought wah wah ha ha. And he’s like I don’t know how to write a check and I’m like how is that even possible then I thought about it for a second he’s younger he’s worked in the electronic he’s lived in the electronic age and so with the internet and  the availability of online banking and debit cards and credit cards. Makes sense he’s probably never ever written a check before so I just thought to myself while I was talking to my daughter that this is something that I need to try to help her with. And so the avenue that I started with to kind of work on this and again this is always going to be a work in progress was I came up with a bucket of three buckets that she should put her money in and encouraged her to try to help her with these ideas. And so the first the first bucket is kind of your spending money so for five-year-old she doesn’t have to worry about rent or car payments she gets to worry about buying or Toys. What I did told her was is that you could put some of your money in there so that’s the money that we can go when we go to the store to go shopping that you can buy yo...
May 22, 2018
Welcome to Investing for Beginners podcast this is episode 59. Tonight Andrew and I are going to answer some reader questions, he’s gotten some emails and we wanted to go take a moment and read through those. We’re going to read some stories and we’re also going to answer some questions so I’m going to go ahead and start us off. The first one I’m going to read is from Anthony the letter starts with: Andrew, I just wanted to express my gratitude for what you and Dave are doing with your podcast. One of the things you both preach frequently it’s patience and resisting the fear of missing out. This recently saved me a decent amount of money. There was a stock that I really liked because they were selling in a bargain I mean this stock would look great. I invested once a month in research during the time in between about two weeks before I would normally make a purchase I noticed the price kept going up and going up. I felt like I needed to buy in NOW or else I would lose potential gains it took all of my willpower to just hold off and wait until the month was up before buying in. I’m sure you can guess what happened next they went back down to its original price the next week then I went down a little further by the time I bought it it was actually spent less than it would have been if I had bought it a month prior this just goes to show how little things like having a little patience can help you in your financial success. Thank you for your time and hard work you put in your effort is truly helping others towards achieving financial freedom. Thank You, Anthony Dave: well Anthony you’re welcome. Glad you are finding some value in what we’re doing that’s what we’re here for is to try to help you guys. Andrew: your thoughts that’s perfect that’s we’re going to start the show on the peak and it’s just going to all go downhill from here all right. Now that we pat ourselves on the back let’s actually help some people. Here’s two questions from Josh both good questions. so we’ll tackle them one at the time. Hi Andrew you talked about dollar cost averaging and its importance however how do you distribute across your portfolio all into a single position or spread out across multiple? How much is too much to put into an individual stock I have five thousand dollars putting a thousand dollars into 5 stocks makes sense. However is there awaiting to placing more dollars into one position versus another? Can you invest too heavily or not enough into a single position while neglecting other positions? Several questions sort of saying the same thing, love to hear your thoughts. Thanks Josh Dave: I guess my thought on what Josh’s question is equal waiting to start would probably a great thing to start with that’s kind of how I do it. But then as you find more information about the companies you can adjust that as you go along and get more comfortable with how you’re investing. There’s never really going to be a right or wrong answer this is really going to be more depending on what you’re comfortable with and how much volatility each of these particular stocks are going to have and how much you can stomach investing into a company that is air quotes losing money or is going down in price maybe not losing money is the best way but maybe the stock market is punishing the stock and you still think it’s a great position. Then that’s when your strength of conviction of what you’re doing is going to come into play. So that’s really kind of how I would look at it Andrew what are your thoughts? Andrew: yeah I agree and you’re kind of alluding to the idea where it’s going to change as time goes on so something that investors are going to have to think about.
May 2, 2018
Welcome to Investing for Beginners podcast, this is episode 58. Tonight Andrew and I are going to talk about financial ratios and we’re going to talk about some ones that we have not discussed before so this will be fun. We’re going to take a shot at talking about return on assets, return on equity, and return on invested capital as well as maybe a few other tidbits so Andrew why don’t you go ahead and take our first shot at return on assets. Andrew: okay yeah I could do that. Return on assets so basically the three of these ratios a good way to think about them is they’re kind of like efficiency ratios. They are ways to evaluate whether a business is good at creating cash with what they have. We’ve talked about some ratios in the past we talked about valuations episode 11 really good for that so we should I think we also talked about the cash flow statement I know we did that we might have done the income statement so we’re trying to piecemeal these lessons here and there. These efficiency ratios are good to keep in your back pocket for doing the kind of stuff that some of these value investors like to do I know Buffett likes to use efficiency ratios like I think he uses ROE, Joel Greenblatt uses ROIC so these are some good ones to know and to understand obviously some of these accounting metrics are a little bit hard to conceptualize if you aren’t familiar with financial statements. I would recommend maybe that’s a little bit over your head to try to learn some of the basics first try to tackle a financial statement and then maybe go back to an episode like this and then you can really comprehend return on assets. so that’s simple like it sounds so when you hear all of these return they’re basically talking about like what a company is able to create as far as profits go so the simplest way to use this equation as to say return is net income and then you divide it by assets which is total assets. Pretty self-explanatory I would say you think about the type of businesses that are going to be scoring better on both return on assets and return on equity one that comes to mind would be like a Facebook right where they don’t need as many assets pretty much any financial website or why did I say financial that at least my brains on somewhat of the right general topic. But any website any business that isn’t very capital intensive doesn’t need huge expensive factories in order to run they’re generally going to score really well on ROA or ROE and so I think ROE is also self-explanatory Dave do you want to talk about that one and talk about anything I missed about our way. Dave: yeah the ROA what I like about it is it’s obviously it’s very simple to calculate and as Andrew was saying it is an efficiency ratio and I think that the thing that I like about return on assets is it gives you it gives you an idea of how effectively the company is converting its money into income. And obviously the higher the number the better it is and so as Andrew and I like to talk about a lot assets are really was drive a business earning more money and when you think about return on assets the best way to think about it when you’re using it as a way to value a company is to look at the financial ratio as a comparison to like companies. So for example you wouldn’t take a railroad and look at the return on assets and compare that to a bank or you wouldn’t take the railroad and compare it to Facebook because there are two different types of businesses. Where it’s going to be most effective is when you’re going to use it in in a relationship to other like to like businesses. Let’s say  the fang stocks which was  all the rage so if you take Facebook and maybe Google or alphabet and compare those return on assets those it’s going to be more e...
April 28, 2018
Welcome to Investing for Beginners podcast episode 57, Andrew and I are going to take a stab at talking about some of our favorite books. Books are a fantastic way to learn and as Andrew and I are both self-taught investors we thought we would share some of the books that have helped shape our views and philosophies. So without any further ado, I’m going to turn it over to Andrew and he’s going to talk about his first book. Andrew: yeah love to talk about them and it’s so crucial right if you want any chance at jumping into the stock market I think it’s important to instead of immersing yourself immediately in the media and in the charts and everything that’s going on the business world. You can build a base and a foundation and get some wisdom from people who’ve done this for decades. Getting a huge head start on the rest of the investors who are going to they’ll go out and they’ll learn these expensive lessons where you can kind of shortcut all of that and you can really get your skill set get that at a much higher level in the beginning and the only compound from there. I mean there’s some books while Dave and I don’t have like the whole financial educational background we do have a huge passion when it comes to reading these books. I’ve personally been reading these books voraciously and I’m just constantly reading new investing books so you start to get to a point where a lot of the books start to say the same things and that becomes a good point because then you understand which parts of these books are really crucial which ones have worked for a ton of investors and not just maybe one or two who sound really opinionated. But has worked for the majority and then you start to get the collective wisdom of all these smart people and so I’ve always been just going through all these different books ever since I started out. So it gets hard for me to kind of pinpoint in and there’s so many different recommendations that I want to give out. I’ll say this like what we’ll talk about the Intelligent Investor and that’s an obvious must read for everybody. It’s a book Buffett that highly praises it’s the foundation of any value mister you talk to they’re going to talk about the Intelligent Investor but I really think that books a little tough from a readability standpoint I think you need like a quick win you need to you need to get confidence you need to get excitement and you need a book that like starts to kind of it’s like baby food right. It’s something that can start you out and until you get to some bigger more intense concepts that you can really chew on. so for me personally and I really lucked out like it’s kind of funny the way I got into it was I don’t know how I ended up at this bookstore I was out of Barnes and Noble. I don’t even know if those yeah they’re still around today right so I know there’s one down the street from where I work but I went into Barnes & Noble and I went over to the investing section and didn’t have really a clue right. Outside of a couple of conversations, I have with the guy who really pushed me in the direction of investing kind of listening to him talk about some of the general principles of investing like dollar cost averaging was a big one that you really espouse in my head from the outset. Outside of those like little discussions, I didn’t have much of a foundation when they came to educating myself in the stock market and investing as a whole. so I literally went to the investing section and I just had an open mind I had no idea which books I was going to pick out and just saw if anything really stuck out and I saw Beating the Street by Peter Lynch and literally like my thought process was what that named Lynch sounds really familiar like sounds like Merri...
April 19, 2018
Welcome to episode 56 of the Investing for Beginners podcast. In this week’s episode we’re going to talk about something that Warren Buffett dropped in his latest shareholders letter and he was also mentioned on a video on CNBC that was released recently and this is relating to new GAAP figures that are going to potentially inflate earnings figures and we’re going to dive into that. Andrew is going to start us off and talk a little bit about some of the background and then we’re just kind of go back and forth, so Andrew one should go ahead and start us off there big guy. * New GAAP accounting rule will affect financial institutions, like banks, insurance companies. * This new rule could inflate earnings for said companies. * Isn’t the first times accounting rules have changed * If you invest in these types of companies you need to be aware as the rule takes effect. Andrew: yeah sounds good and like my M.O. for this podcast has been kind of to hate on CNBC. I just have to say like they put up a new video series and it’s probably the best thing on YouTube other than my own stuff obviously. Okay great there they did like three hours with Warren Buffett on Squawk Box and edit it down and I think it’s about an hour to an hour half of the content on their YouTube channel right now and this was back in I think early February’s when they interview him mid-February is when it was released so he’s that’s straight from the Oracle himself talking about some of the stuff we saw with Bitcoin a lot of the market volatility we saw at the beginning the year and most importantly. Which kind of from my understanding from the way I’m kind of interpreting all of this he just mentioned something as an aside and they talked about it briefly but like the whole majority of the finance industry right now is completely ignoring this and it’s going to have a big impact for a certain group of companies. And it’s relating to what they’ve referred to with these GAAP which is generally accepted accounting principles or practices. And it’s the way that these companies are having to report the financial data that’s all audited and it’s how they come up with the earnings number. And so it’s going to be a big kind of thing and it’s all in a hand in hand with like the new tax reform stuff that we’re seeing and so it’s like this unprecedented thing and it’s definitely something we need to discuss. We’re going to try to keep everything basic explain everything from the very top down and keep it in simple terms but it’s something that’s important to understand so we can know how to approach these type of businesses moving forward. It’s not going to necessarily affect every single company that’s out there right now but it is something that we should definitely talk about. I guess the first thing Dave I will ask you how would you break down some of the major aspects of this are going to be net income and marketable securities and then how those are defined so can you for the beginner that’s out there who doesn’t have an accounting background can you break down what net income is and then marketable securities after that? Dave: okay so I’ll go ahead and take a stab at this so net income is really the easiest way to think of it is the money you make on the money, you make. In simple terms think about your own paycheck when you bring home your paycheck and you pay all of your expenses the money you have left over there’s your net income so after you pay your rent your utilities maybe your cell phone bill maybe you got to get your dog washed or groomed any of those kinds of things that money that’s left over ...
April 11, 2018
Welcome to episode 55 of the Investing for Beginners podcast.  Tonight Andrew and I are going to discuss some of the worst money advice you can get. * Invest 10% of your income * Investing in a quick fad to make money quickly * Try to get to cute and taking on more complexity just for the sake of it. * Buy a ETF index fund and be done with it. * Don’t get caught up in all the hype of the market. * Budget till it hurts Andrew: yeah so I kind of I kind of made a list here. It’s kind of long try that keep it I’ll try to be concise but you we always know how that goes right so. You see all the time and the more that time goes on the more and more people go to the internet looking for advice on how to handle their money a lot of times you’ll have people talk about hey I got $20,000 I got $40,000 maybe I have an inheritance what should I do what should I do what should I do? And then you get all these people come out of the woodwork with all their different biases and all their different ideas and beliefs and all their personal experiences and they all kind of throw it in there and some of it can be good but a lot of it’s bad. We want to talk about why that’s bad what things that you’ll tend to hear and how to kind of process that and make sure you don’t fall into these same traps and that’s really important because this is a huge part of learning how to handle your money and that’s not even just about investing or financial freedom or personal finance it really comes down to money itself and if you think about all the time when we spend 40 hours a week most of us working for money and then a lot of us don’t even spend a couple hours within our lifetime to really learn what to do after we make the money. It just kind of flows in the now and then it becomes just this pointless thing to put food on the table when there’s actually plenty of opportunity to make that do much more for yourself than there currently does and unfortunately like we a lot of people like to kind of bemoan the fact that’s not really discussed in school and it’s not taught in school. A lot of people don’t learn about it unless either you seek it out or you’re lucky to have somebody kind of bring that advice to you. And so obviously financial education is really important and part of that is learning whether a lot of the common misconceptions whether a lot of the kind of average pieces of advice that people give out to beginners and what how can we interpret it and kind of tackle this tackle it and really make it useful for us instead of hurtful. I’ll start with an easy quick one you hear this all the time you hear people say invest 10% 20% 50% of your income and if we’re really being honest it’s an unrealistic thing to expect of people because percentages when you’re talking about income that’s going to vary a lot depending on how much you bring in. Somebody who makes twenty thousand dollars a year cannot invest 10 percent of their income because if they do that they won’t be able to pay the light bill. Whereas somebody makes a hundred thousand could easily invest twenty percent of their income and have a very cushy life style outside of that. I think that’s something first and foremost this the percentages when you talk about investments and income and personal finance it’s one of those kind of rules of thumb that we really need to kind of put an asterisk on. I think a good general rule Dave we talked about in one of the episodes with the Richest Man in Babylon the whole 10% rule I think once you kind of reach over a certain point of poverty that becomes a good rule of thumb and there’s ways like 401ks and IRAs that we’ve discussed before in different ways that you can kind of best efficiently invest that 10%...
March 29, 2018
Welcome to Investing for Beginners podcast this is episode 54. Andrew and I are going to talk about the maturation of different industries. We’re going to discuss how when you’re looking at companies to invest one of the things you want to look at is how the industry that it’s in is maturing and what stage of growth they might be in along that path.  Without any further ado, I’m going to turn over to Andrew and he’s going to get us started. Andrew: thanks Dave, this is something that actually really haven’t read anything about when it comes to investing and everything it’s just one of those things I kind of noticed as I was looking through financial statements, kind of trying to observe like how different stocks kind of move throughout the years. I’ve done a ton of research and a post on my blog about companies that have failed also companies that have really succeeded and looking at the financials and trying to piece together what happened in the very beginning and then how did it play out as the years went on and I’m sure this is probably like common sense stuff for I don’t know business majors econ majors whatever. But we’re DIY investors and we’re just trying to soak in as much information as we can and  it’s good to keep our eyes open try to be observant in a similar fashion to one of the previous episodes where I talked about unconventional investing rule to have for your portfolio I figured this would be kind of another cool thing to discuss and talk about. I mean it’s obvious when you look at a single stock standpoint that stocks will mature and they will reach a point where I don’t want to say it’s like too big to fail but they do get to a point where they’re kind of too big to grow in a sense. I talked about this in one of the daily emails several weeks back where if you look at a company like Amazon as they trade today it’s somewhere around 700 almost 800 billion dollars in market cap you have the high valuations and I love the company I absolutely use them I think they’re revolutionizing the world they are changing the world they are making everything convenient I have an Amazon package at my front door probably once a week. I love the company however as an investment and looking at the valuation metrics it’s just not something that I want to take a bite out of and you’ll see  you’ll continue to see much rationalization when it comes to people who are following the stock and just the average Joe investor who wants to spout his opinion online, and and you can tell a lot of it’s just strictly uneducated they have no concept of valuation no concept of any sort of fundamentals and they’ll just kind of quote random facts that fits their narrative and has a confirmation bias where it it just looks bullish and  they are bullish on the stock. And I don’t want to say that the stock won’t continue the client from here I mean it could easily climb in our 10 20 percent and I don’t see that as not being out of the realm of possibility. However when I look at stocks I’m looking at the very long term we discussed last week about me selling strategies and I discussed how ideally I would like to hold a stock and hold it for forever that means collecting dividends all along the way that means the stock is growing its dividend I’m reinvesting that dividend. And that also means that the stock is at least growing close to obviously ideally better than the average but close to the average stock market appreciation point which historically has been 10%, and you can see just so many studies out there that have shown that and the US stock market 10 percents been the average for over a hundred years.
March 22, 2018
Welcome to Investing for Beginners podcast this is episode 53, Andrew and I are going to take a stab at talking about negative earnings. We had some interesting event happened this week in Andrew and I were having a conversation prior to coming on here today and we wanted to talk a little bit about negative earnings. Just to kind of give you a little of a bit of a backstory, so last week Andrew sent me a text message telling me that one of the companies that he and I both own had negative earnings on their 10k and this caught me completely by surprise. That was shocking and I had no idea that if that happened and I was a little bit like wow Oh crazy and I was it kind of caught me because it I felt like it came from out of out of the blue. And I had no idea that that this company had happened and you know I wasn’t paying that close of attention honestly and so something that really caught me off guard and as Andrew and I were talking about it it’s you know Andrew and I see eye to eye on almost everything but in this particular case we differed a little bit on our viewpoints of how we handled it and so it was kind of an interesting snapshot into how value investors think about things and it’s not always exactly the same. And so I had a different viewpoint and Andrew had a different viewpoint I thought it would be interesting for us to talk a little bit about that tonight so Andrew why don’t you go ahead and tell your side of the story if you will and then I can tell mine. Andrew: well what is this a divorce are we fighting hardly well let me get my lawyer and we’ll have somebody in between and they can relay this message and then you can calm down think it over maybe take a walk cool off. Yeah but no this will be fun like you said we kind of agree on everything and it’ll be fun to have a little bit of a debate I’m not really going to call it a debate. I’m just going to present how I do it you we kind of talked before coming on them and you talked about some of the reasons why you’re doing what you’re going to do and so I see that side a lot and I think a lot of it has to do with the way we’re structuring our portfolios and the different strategies that we try to take. For me it’s kind of simple and it’s not much to talk about I’ve talked about over and over again how the way I structure my strategy is I split my portfolio into two basic segments. I have the regular portfolio with a 25% trailing stop attached and those I tend to focus more on the margin when it comes to margin of safety rather than the safety. In those cases I look for things that are really undervalued they tend to have a lot of negative sentiment around them when they’re so steeply undervalued. So might have to you know buck the trend but also have chances for quick gains. Or you know a stock that has really high growth but because of that they don’t pay much of a dividend or don’t have any dividend growth. You know I still always buy stocks with dividends but that could be the case as well and that would be a regular position for me. And then obviously I have the dividend Fortresses which are companies that I look for that are growing their dividend looked to grow them for a very long time and obviously still trade the good price and a good safety when it comes to margin of safety with more emphasis on the safety. Though what one of the rules that I implement and so this is generally just for the dividend fortress sell but this particular position is it’s applying to this position as well and it’s one with a 25% trailing stop. So definitely it’s important to have strict rules for where you’re going to sell. I think that’s key number one and number two is when you set these rules do not make exceptions so in my case once I once Dave told me the justi...
March 15, 2018
Alright, folks well welcome to Investing for Beginners podcast. This is episode 52 Andrew and I are going to talk about balancing the art and science of intrinsic value. Today we’re going to talk a little bit about intrinsic value, one of my favorite subjects and Andrew’s as well and this should be a little bit of fun so Andrew why don’t you go ahead and start us off. Andrew: yeah sure so basically you know we’ve been doing that back to the basic series this one’s going to be admittedly pretty technical so if you’re not as far along maybe skip this one save it for later go back to the back to the basic series. But this is going to be for those of you who are following along starting to look at the intrinsic value of companies trying to figure that out for ourselves and figure out how can we determine when the stocks undervalued when it’s overvalued and really just try to take that process to the next step. Because on one side it sounds really easy to say just buy low sell high it’s really easy to say buy with a low p/e only to say it’s easy to say a lot of those things but when you really get down to it there’s a just a myriad of different ways you can evaluate intrinsic value. Same with evaluating the margin of safety and when you just talk about value investing, in general, there’s so many moving parts and so I think it’s important for us to kind of just discussing the whole beast so to say so. I remember when I first started out and when I was doing the blog and stuff I interviewed Jae Jun from Old-School Value and it was a great interview it’s up on YouTube still if people want to go check it out. But he basically talked about the fact that there’s a science and an art to value investing and so that’s really key and a lot of times when people talk about it they talk about the quantitative side versus the qualitative side. You know the quantitative of just looking strictly at the numbers whereas the qualitative or things like you know things you can’t really use numbers to evaluate. So things like how’s the integrity of management how is the business kind of going along what ‘s the corporate structure look like what’s the corporate culture look like how are the competitive advantages as they as you kind of speculate them outside of a numerical market share type thing. Yeah I mean you could go on and on and on but we’ve definitely had a couple episodes about focusing on the quant episode 10 was an example of one of those we did. Episode 12 we kind of talked qualitative stuff but I think about the art of valuation in terms of value however you want to say that to me it’s more I’m not talking about getting into the art and referring to it as a qualitative thing. I still kind of don’t lean that way if that makes sense what I want to do is take the numbers figure out what that whole picture is and then instead of trying to break it down to an exact science. We’re looking at a business and saying you know what this business earns this much has this much cash flow as it has these many assets therefore this business is worth blank like 75 dollars a share. I think that’s kind of going overboard on the quant stuff and on the science part of it I think where the art part comes in is where you kind of need to look at okay maybe this stocks more generally valued around sixty to ninety and you know whatever that range maybe I mean that’s a very loose range it’s obviously not going to be that maybe that loose of a rang...
March 6, 2018
You’re tuned in to the Investing for Beginners podcast, finally step-by-step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Welcome to Investing for Beginners for podcasts. Today we have another great interview for you today our guest is Alex from Wall Street Oasis. Andrew: Wall Street Oasis is a website that’s been around for a very long time it’s one of the top websites out there. Resources for people who are looking to get into the financial world particularly when it comes to investment banking, venture capital, kind of that whole space. That website has a ton of resources about you know whether you want to get in as for your career and like interview tips and all these sorts of things and they really cover just a ton of topics related to investing finance Wall Street and so I’m really happy to bring Alex on the show today. Alex thanks for coming on Alex: yeah thanks for having me Andrew happy to be here. Andrew: can you talk about your background for a bit and your role over at Wall Street Oasis to give our listeners some context for our interview today. Alex: yeah sure happy to I let’s see I recently graduated from Business School I got my MBA from UCLA Anderson last May so almost a year ago. In so now my life’s been pretty different after school but let me tell you what I did before school. So I’m 31 so for seven years I worked in investment banking at. First I worked for JP Morgan and then for Houlihan Lokey it’s kind of a smaller investment bank, but I focused on what’s called restructuring Investment Banking where you’re working with distressed companies and bondholders. And so did the investment banking stuff for a while and then I actually left to go work for a digital media company. essentially just doing internal investment banking you know buying and selling websites stuff like that setting the strategy for the for the business. And those were cool jobs but I always wanted to do something more entrepreneurial, and so I thought Business School would be a good way to kind of bridge my two worlds the finance hardcore finance stuff and then kind of my passion and work in startups and for myself. Not get told what they do all day long I mean I like working hundred hour days like you do in 100 hour weeks like you do in banking but I wanted to be doing those for myself. So I went to business school try to find that entrepreneurial spirit that was somewhere inside of me, and now I’m finding it. And let’s see I went from making lots of money and Investment Banking to now I literally make hundreds of dollars per week in the start-up world. That’s a change but in terms of fulfillment in terms of like career goals and objectives on checking off every single box right now. Besides the money one so I’m confident that the money will come soon and as far as the Wall Street Oasis in business school one of the entrepreneurial things I did was I started the podcast and the guys on Wall Street Oasis heard it, and they liked it and they said why don’t you just come make a podcast for us and so now my podcast where I speak with top business leaders, CEOs, investors bankers, all that kind of stuff founders. We have it it’s called The Wall Street Oasis podcast, and it lives there and we kind of talk about the ups and downs of someone’s career how they got to where they are the cool stuff then not cool stuff and kind of you know tip what tips they would have for trying to follow in their steps. Andrew: that’s awesome you know I love the idea of kind of pursuing your own path and obviously you kno...
February 27, 2018
Welcome to Investing for Beginners podcast, Andrew and I are going to do a little blast from the past today. We’re going to talk to our second guest actually when we started the podcast. We’re going to have Braden from Stratosphere Investing talk to us tonight, this is going to be a lot of fun Braden is going to catch us upon what he’s been up to and see all the crazy things that he’s doing so without any further ado. Andrew and Braden why don’t you guys started us off. Andrew: yeah Braden welcome to the show I think it’ll be very interesting for everybody because last time we talked to you were still beginner kind of. With a lot of different questions and seem like you’re forming an approach and a lot of intelligent questions. You could tell that a lot of the basics were digested and it was just about finding exactly where you were comfortable and then actually getting that experience in the market. Take us through how you got started and how you’re able to evolve your approach to now. We talked before the show about how you’ve had some fantastic returns with your stocks lately so kind of walk us through that. Braden: yeah that’s right well thanks for having me on guys. I’m Braden Dennis and wow what a journey it’s been I guess since even before even before this show to now and kind of I guess midpoint where I came on the show for the second episode I had already kind of digested like you said that we get the basics my questions won’t come and just you know where do I start? It’s I have this now formed a strategy and how do I how do I continue to grow it and some other questions that maybe others had as well and then fast forward to now I’ve started my blog and podcast. Shameless plug here at Stratosphereinvesting.com and now it’s you know I guess brings me back two years ago, and I had you know the foundations of investing. I’ve always thought what makes me a good investor is I have the very good temperament. I’m able to block out some of the noise and kind of the other manias that tend to happen in financial markets and really to gain that temperament and have that outlook when I started investing. I mean we started in the middle of a bull market, and now it’s continuing to roar on if you don’t learn from history and you don’t study the Great’s and see the kind of changes that happen in the markets over a long period. If you don’t study that how are you supposed to know how to protect you know minimize downside risk protect from vicious drawdowns if you don’t understand what’s happening in the past. So I’ve operated with a margin emerging of safety, picked fantastic businesses known my businesses incredibly well. I’m a Canadian, so you know where I got a look at a little differently my benchmark is the TSX, and it’s not the S&P; 500 I mean some could argue that the S&P; could be my benchmark is now I could just pick up an index fund but not only is that incredibly boring is you know at the end of the day though ETFs are actually carrying an extreme amount of risk in my eyes. their market capitalizing market capitalization weighted and what that really have what that really does is a large portion of that fund is now dumped in what we’ll call the FANG stocks and if you don’t know what the FANG stocks are it’s Facebook, Amazon, Netflix, and Google and depending on who you talk you might throw some other A’s and ends in that mix. But really at the end of the day, they’ve gone to irrational highs, and you’re carrying that way that that risk of potential massive drawdowns if you own that fund.
February 20, 2018
Welcome to episode 49 of the Investing for Beginners podcast. In today’s show, Andrew speaks to Nick McCallum from Sure Dividend. You might remember Ben Reynolds from episode 7; Ben’s the founder of suredividend.com.  Nick writes for him, and together they are starting a new podcast called the sure investing podcast. And so you know I’m kind of friends with Ben, and we’ve been going back and forth so I thought it’d be a good time to release this episode. This interview that I’m going to do here with Nick around the same time that Ben and Nick are releasing their podcasts out into the world. It would be a great opportunity for you guys to check them out and if you’re at all interested in dividends you can listen to Ben’s interview, we did in episode 7. Listen to today’s interview and get a lot of insights on the power of basically combining value stocks and dividend stocks and creating the best types of compounding interest and wealth that you can. Andrew: To start off first off thank you, Nick, for coming on. Nick: my pleasure I’m excited to be here. Andrew: and one of my favorite articles you wrote it is called the better investment dividend stocks or growth stocks. I love that idea because especially in today’s environment everybody, and it doesn’t matter what asset class we’re talking about. Everybody wants to gravitate towards capital appreciation everybody wants to talk about what has doubled what’s tripled what’s could triple. Obviously, we thought with all the tech stocks today we saw biotech in previous years, and we see it with the crypto, and it has fallen off a bit. But you see a lot of momentum build on itself, and a lot of that momentum when you’re talking about the stock market starts from these companies that might not necessarily be so profitable, but they’re growing at a fast rate in whatever metric Wall Street likes to use for the day. Basically these growth stocks create really big increases in share price, and it creates a sort of craze, and you can see a lot of these different bubbles and you kind of get like that contrasted with a dividend stock where people might think that that’s maybe a little bit more boring. Have you done any research on dividend stocks versus growth stocks and maybe what were some of the simple findings you got from that and we can kind of take that more in depth from there. Nick: well I guess the first thing that’s worth pointing out is that the whole stigma of dividend stocks versus growth stocks is a little bit misleading because there are growth stocks that pay dividends. And there are dividend stocks that are growing, and I would say there are quite a few stocks that meet those criteria. the research that we’ve done suggests that dividend stocks tend to be better than growth stocks and in fact, stocks with higher yields tend to perform better than stocks with your lower yields almost being equal. Now we’ve seen evidence that says the highest-yielding quintile of stocks that performs the lowest yielding quintile stocks by about 2% per year over long periods of time. We’ve also seen evidence that says stocks that grow their dividends beats those with unchanging dividends by two and a half percent per year. I think that that that description of stocks that grow their dividends over time is the sweet spot between dividend stocks and growth stocks and you could say you know classify them as dividend growth stocks. I think that they get the benefits of both dividend stocks and growth stocks and they also capture other unintended benefits that aren’t characterized in another one of those other two groups. Andrew: do you have any examples off the top of your head of some stocks that we’ve seen in the past that were able ...
February 13, 2018
Welcome to Investing for Beginners podcast this is episode 48. Andrew and I are going to talk about distressed businesses or negative earnings, negative shareholder equity we’ve never really delved into that aspect of investing and kind of what to look for in companies that having falling stock prices. We’re going to talk a little bit about maybe some cautionary tales as you’re looking for companies to invest in for your potential retirement, * The importance of the price to cash ratio * The impact of declining shareholder’s equity * The impact of declining earnings * What to look for in the financials of a falling company * Not every falling company is failing Without any further ado, I’m going to turn it over to Andrew as always and let him start us off. Andrew: yeah so I mean we did a bunch of episodes on beginning with the basics. I think let’s dive in we haven’t done anything pretty technical in a while, and I always love to talk about I know some at least some of our listeners like to hear about it. I thought maybe we could like stay relevant. Obviously there’s been a couple of things that have happened lately, and I realized in the podcast world by the time this comes out it’s going to be months old news. But we had Tesla lose taxpayers billions of dollars we’ve talked about Tesla before so I’m not going to talk about that story with the whole SpaceX thing. But there is another one, and it’s Sears Holdings it’s on CNBC, and the media and everybody talks about the fall of retail and talks about how Amazon’s taken over that space. And then made a lot of businesses fail and it is very true, and I thought this could be one that we’ll look at a little bit deeper and see. Because obviously if you look at the stock chart it’s been beaten down and with stocks that are being down sometimes that comes an opportunity. Because then you can buy a low price for Sears, in particular, I will look at like a basic price to cash. The price of cash is 1.8 which means if you’re buying this stock you’re almost getting the cash if the price the cash was 1. That means let’s say you’re paying a hundred million dollars to get a hundred million dollars in cash like that’s like almost getting like free cash. It sounds like a like a great value play, but I think you’ll find as we dig deeper into the numbers that there’s more to this story and that even though you see a couple of good metrics from a value standpoint. Because the complete picture isn’t all there than it is a cautionary tale and there are several different symptoms with Sears right now that signal a business in decline. I think those are some of the things that you should look at when you’re looking at evaluating various stocks particularly in ones where industries are being I don’t want to say under attack or siege. But going through a lot of change so obviously retail is one of those and with a lot of change comes a lot of opportunities. But also a lot of risks anytime you’re getting into what’s almost called like a devalue with really distressed companies it’s very important that you are differentiating between opportunity or risk. Dave: yeah exactly and I think the big thing was Sears is you look at the evolution of the company over the last eight, nine years, and they’ve been in a kind of a scramble mode to try to figure out how to stay relevant and stay alive. And as Andrew and I were talking about preparing for this episode tonight I was looking at just a price chart of the company in since 2009. They were at the height of 122 dollars a share and currently they’re at three dollars and 33 cents a share. That is quite a precipitous drop the city of the least a...
February 6, 2018
This is part 5 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time. Here are the links to each of the episodes: Back to the Basics Pt 1: The Anatomy of Stocks and Shares –Defining what a stock is –Talk about the big 3: the cash flow statement, balance sheet, and income statement –Earnings manipulation Back to the Basics Pt 2: Share Dilution on Wall Street –What is a stock –What are stock buybacks and how they affect us –What are share dilutions –What happens when we buy or sell a stock Back to the Basics Pt 3: Stocks vs Other Investments –Peer to peer lending –Real Estate –Gold and other precious metals –Bitcoin and other cryptocurrencies –Bonds Back to the Basics Pt 4: Investing 101 and Compound Interest –The importance of buy and hold –Compound interest and how it can make you wealthy –Using a compound interest calculator –The power of dollar cost averaging Back to the Basics Pt 5: Dividend Stocks and Value Investing –The advantages of buying low and selling high –Dividends and the power of compounding Welcome to Investing for Beginners podcast this is episode 46. Andrew and I are going to continue talking about back to the basics. Today we’re going to follow up on we’ve finished last week talking about compound interest, dollar cost averaging and we’re going to talk a little bit more about dividends today. Of course, that’s Andrews favorite thing to talk about, and we’ll also talk a little bit about buying low and sell high.  Without any further ado, I’m going to turn it over to Andrew to get our chat started, and we’ll just go from there. * The advantages of buying low and selling high * Dividends and the power of compounding Andrew: cool so dividends yes let me get started because we were looking at the backbones of it. We’re looking at you know we talked about the anatomy of stocks and what shares represent. Whether dividends and how do they relate and why are they powerful for us. Dividends are pieces of earnings that companies are going to pay out to shareholders. It’s in my opinion which is it’s debatable because of a lot of people kind of look past this. But I see investments as the whole point of having an investment is to receive an income. When you buy an investment you are taking on a certain amount of financial risk there’s a chance that you could lose all of your capital. There’s a chance you could be given your money the Bernie Madoff, and he’s running off with it there’s a chance that you’re putting money into a business that decides to light it on fire and goes bankrupt after a couple of years. It’s a lot of risks that are involved, but that’s where the reward comes in. Are you’re getting you’re going to get paid for those risks back to you, and in my opinion, the most reliable source of that would be interest and income. And so we see that with loans, and we talked about that a bit. We’re discussing all the different types of investments that are out there besides the stock market it gets lost on investors,
January 29, 2018
This is part 4 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time. Here are the links to each of the episodes: Back to the Basics Pt 1: The Anatomy of Stocks and Shares –Defining what a stock is –Talk about the big 3: the cash flow statement, balance sheet, and income statement –Earnings manipulation Back to the Basics Pt 2: Share Dilution on Wall Street –What is a stock –What are stock buybacks and how they affect us –What are share dilutions –What happens when we buy or sell a stock Back to the Basics Pt 3: Stocks vs Other Investments –Peer to peer lending –Real Estate –Gold and other precious metals –Bitcoin and other cryptocurrencies –Bonds Back to the Basics Pt 4: Investing 101 and Compound Interest –The importance of buy and hold –Compound interest and how it can make you wealthy –Using a compound interest calculator –The power of dollar cost averaging Back to the Basics Pt 5: Dividend Stocks and Value Investing –The advantages of buying low and selling high –Dividends and the power of compounding Welcome to Investing for Beginners podcast this is episode 46. Andrew and I are going to continue our series on back to the basics, and today we’re going to talk about buy and hold and why that’s important. As well as compound interest and some other interesting topics. So without any further ado, I’m going to turn it over to Andrew, and he’s going to start off our chat. * The importance of buy and hold * Compound interest and how it can make you wealthy * Using a compound interest calculator * The power of dollar cost averaging Andrew:  If you’ve read any investing books and gotten involved with the whole scene, these are a lot of the things that are similar themes. I’m hoping with these episodes that we’re going at such an in-depth level that you’re still picking up things that are valuable. The whole goal of this is to get things to stick. Because it’s one thing to hear something but if you can take these basics and master them– give yourself the reasons why and give yourself not just the how but the why. Give yourself a firm foundation and understanding on why these things are applicable and why, when things get tough, you’re going to have these values to stick to. It’s important to get this mastery rather than just floating through the wind, and when adversity comes, if you don’t have this foundation you might forget about all these lessons or you just might be stubborn and not listen to what’s been proven. And this kind of like conventional logic when it comes to the stock market and investing and so I think it really can have a big impact on your final results as you navigate through the stock market. I think that applies whether you’re an absolute beginner or even if you are more seasoned. Getting these lessons drilled and mastered can go a long way. I would recommend going through them I think there’s a lot of good value here and obviously, today even if you’ve heard that you should buy and hold or you should diversify or you should dollar co...
January 15, 2018
This is part 3 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time. Here are the links to each of the episodes: Back to the Basics Pt 1: The Anatomy of Stocks and Shares –Defining what a stock is –Talk about the big 3: the cash flow statement, balance sheet, and income statement –Earnings manipulation Back to the Basics Pt 2: Share Dilution on Wall Street –What is a stock –What are stock buybacks and how they affect us –What are share dilutions –What happens when we buy or sell a stock Back to the Basics Pt 3: Stocks vs Other Investments –Peer to peer lending –Real Estate –Gold and other precious metals –Bitcoin and other cryptocurrencies –Bonds Back to the Basics Pt 4: Investing 101 and Compound Interest –The importance of buy and hold –Compound interest and how it can make you wealthy –Using a compound interest calculator –The power of dollar cost averaging Back to the Basics Pt 5: Dividend Stocks and Value Investing –The advantages of buying low and selling high –Dividends and the power of compounding Welcome to Investing for Beginners podcasts this is episode 45. Andrew and I are going to continue our conversation about back to basics with stocks and tonight’s topic is going to stock versus other investment options. So Andrew and I are going to talk a little bit about some crypto maybe a little gold maybe a little real estate we’ll just kind of give a brief overlay of those ideas and then talk about how those could be good or bad investments for you versus stocks so Andrew why don’t you go ahead and take it away, and we’ll just chat away. * Peer to peer lending * Real Estate * Gold and other precious metals * Bitcoin and other cryptocurrencies * Bonds Andrew: Yeah, I feel like with every episode we do we keep saying we’re going back to the basics so now I want to take another step back and let’s go back to the basics again and let’s talk about even before we jump into stock let’s talk about investing in general. And so once you’ve made a decision that you want to invest money and put it to work making these dollars work for you to make more money and to be able to start this compounding that’s going to create hopefully massive wealth for you in the future. Create future income streams before we do all that you have to take a step back and understand that there’s a lot of different places that you can put your money. A lot of different ways you can make it work for you, some of them are going to be good and some of them will do better than others. Certain time periods will be better for a certain type of individual and so on. So it all depends, and it’s a subjective I think it’s a great place to start and you want to know what all the options are because if you’re going to jump into the finance world and it doesn’t matter if you’re going to become a complete DIY. You know live and breathe the markets type of investor or if you’re going to be somebody who’s just going to be completely passive either of those approaches will work well.
December 29, 2017
This is part 2 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time. Here are the links to each of the episodes: Back to the Basics Pt 1: The Anatomy of Stocks and Shares –Defining what a stock is –Talk about the big 3: the cash flow statement, balance sheet, and income statement –Earnings manipulation Back to the Basics Pt 2: Share Dilution on Wall Street –What is a stock –What are stock buybacks and how they affect us –What are share dilutions –What happens when we buy or sell a stock Back to the Basics Pt 3: Stocks vs Other Investments –Peer to peer lending –Real Estate –Gold and other precious metals –Bitcoin and other cryptocurrencies –Bonds Back to the Basics Pt 4: Investing 101 and Compound Interest –The importance of buy and hold –Compound interest and how it can make you wealthy –Using a compound interest calculator –The power of dollar cost averaging Back to the Basics Pt 5: Dividend Stocks and Value Investing –The advantages of buying low and selling high –Dividends and the power of compounding Welcome to the Investing for Beginners podcast this is episode 44. Andrew and I are going to continue our discussion on back to the basics with the stock market and last week we talked a little bit about stocks and today we’re going to talk some more about stocks.  Because you know that’s our favorite thing to talk about besides that baseball and so without any further ado Andrew ahead something you wanted to say as we got started. * What is a stock * What are stock buybacks and how they affect us * What are share dilutions * What happens when we buy or sell a stock Andrew: yeah so obviously last week I had a big thing about you know how shares kind of work and the whole premise behind the stock market. Behind why Wall Street’s there what the value is and how it provides value for really the whole world and how we can take part in that. I think the next thing that we should really cover is how that applies to Wall Street today so obviously Wall Street’s very intimidating and it can seem like if you don’t have a double-double MBA and in finance that there’s no way that you can really have a shot at understanding it and making it work for you, and that’s so far from the truth and everything we try to do with this podcast is really to try to alleviate that and especially with this series that we’ve come up with here with going back to the basics. We’re really hoping when you can go from just the average person who might not know anything and really start to put some of the pieces together and use that momentum and it can really take you in some far places and so it was really exciting to be kind of a part of that so with the whole discussion last week I talked about how company issues shares and how they can use those share you know they can essentially it’s called raise capital you hear this a lot in Silicon Valley and yeah you know on Shark Tank and with private equity it’s really a place for companies to incubate and get a jump start and go from either they’ll go from nothing to something with a great idea...
December 18, 2017
This is part 1 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time. Here are the links to each of the episodes: Back to the Basics Pt 1: The Anatomy of Stocks and Shares –Defining what a stock is –Talk about the big 3: the cash flow statement, balance sheet, and income statement –Earnings manipulation Back to the Basics Pt 2: Share Dilution on Wall Street –What is a stock –What are stock buybacks and how they affect us –What are share dilutions –What happens when we buy or sell a stock Back to the Basics Pt 3: Stocks vs Other Investments –Peer to peer lending –Real Estate –Gold and other precious metals –Bitcoin and other cryptocurrencies –Bonds Back to the Basics Pt 4: Investing 101 and Compound Interest –The importance of buy and hold –Compound interest and how it can make you wealthy –Using a compound interest calculator –The power of dollar cost averaging Back to the Basics Pt 5: Dividend Stocks and Value Investing –The advantages of buying low and selling high –Dividends and the power of compounding Dave: Welcome to Investing for Beginners podcast, this is episode 43. Andrew and I are going to be talking about some beginning stuff. As my baseball coach used to say it’s all about the basics and we used to drill it into our heads every single week, but it works it helped us a lot we were a good team, and we won a lot of games, and so it was awesome. * Defining what a stock is * Talk about the big 3: the cash flow statement, balance sheet, and income statement * Earnings manipulation So I think going back to the basics is always a great thing and you can never know enough, and it’s always good to just learn the foundation and kind of build from there. Andrew: yeah let’s talk about stocks. I mean if there is a way to change the archive so this would be the first one. And people would just kind of follow a progression that would be awesome and hopefully this is an episode that we can reference in the future and tell people hey if you’re completely beginner and you want to understand how the stock market works and why it works the way it does and what it all means from the most basic perspective. Hopefully, this episode will cover that so basically you know we talked about this a lot how a stock is part owner of a company. But you know what does that mean exactly what is the stock market at all and then you know why it even they exist is. So you have to think about the way the business world works for a minute, and I’m not going to use the lemonade example because I feel like everybody uses a lemonade stand. So let’s say you have a coffee shop it’s very successful you got the line up the door and demands high to grow the business. You have a couple of options as the business owner; you can use cash which might take a little while because you need to collect more cash save it up and use that to build a new store or in your shop or whatever or you know you could go the bank get a loan.
December 11, 2017
Welcome to Investing For Beginners podcast, this is episode 42. Andrew and I are going to do something fun tonight; we’re going to answer some reader questions. * Correction about how to treat capital gains when selling a stock. * What options are there to check the financials of a company before year’s end. * Different strategies to utilize when prices fall to help protect your investments. * Tips to find the right broker for you. We’ve gotten some emails in the last week, or so that had some interesting questions. Andrew and I thought we would chat a little bit about those so without any further ado Andrew I’m going to turn it over to you big guy and let you start us off. Andrew: yeah let’s catch up on some of these huh yeah okay first one person. Alan, he says “hey Andrew in the last episode 39 the question was asked when you buy stocks over time and then you sell which gets sold first, the ones you bought or later ones? Alan says you and Dave said it didn’t matter from a profit standpoint is correct, but for calculating capital gains tax, it can mean the difference between long-term and short-term capital gains. So if I buy ten shares of stock XYZ a year and a half ago assuming long-term capital gains kicks in after one year and I bought another ten shares three months ago and today I sell ten shares will I pay short-term or long-term capital gains on the sale? So, Alan, you’re right it does matter as far as capital gains taxes go. I mean like we mentioned in the episode there’s that cut off time of 12 months, and so if you’ve held the stock for less than 12 months, it’s short-term capital gains. Longer than that’s long-term so in essence, if you were to sell the shares that you can hold for as long then yes that would affect how much you get in at the end of the day because you’ll be getting short-term and long-term capital gains. The way I look at it, Dave you can correct me if I’m wrong, but either the brokers going to do that for you and then if they don’t because it’s a thing right where the broker is going to give you a form while your tax implications based on your buys and sell. And then you will either take that to an accountant or if you’re doing a Turbo Tax thing whatever that may be. But at least with my accountant, I’m usually telling him like my dollar amounts as far as how much stock I sold and then saying if it’s a long-term or short-term capital gains. I don’t know if that’s the case I’m assuming if you’re doing a Turbo Tax that’s value you will enter it manually. So I’ll be aware of it yourself and then interact so you know if you’re buying 20 shares ten of them would be long-term ten short terms and you’re selling just the long-term capital gains. Be aware that worth to the IRS that and then if there are any discrepancies if you get audited by the IRS the trade histories all going to be there with your broker. So if anything anybody wants to challenge what you’ve inputted it’s just the case of looking back, and it’s a simple math thing, and you’re just look looking at the difference between the dates and then looking at the activity I don’t see it being an issue, but it is good that you look. But because there is that difference, and we didn’t clarify that an episode 39, again I’m not a tax professional. This isn’t any professional advice but for my honor for my understanding the capital gains things are things that you are self-reporting to the IRS. And in the case of an audit, you should have the proper documentation from your broker that they sent in the mail. Dave: Yeah,
December 4, 2017
Welcome to Investing for Beginners podcast, I’m Dave Ahern, and Andrew Sather is here with us as well. Welcome to episode 41, tonight we’re going to talk to Brad Conway who’s coming all the way from merry old England. Brad is a newer investor, and he’s got some great questions for us tonight. So without any further ado, I’m going to hand it over to Andrew and Brad. A special note I had some audio difficulties with my speaking tonight, my computer was not working so I had to use my phone. So the audio quality for me will not be so great, so I apologize for that in advance, thank you for your patience, and I hope you guys enjoy the show. * How trailing stops and the best ways to utilize them * Lessons we learned from our stock losers * Margin of safety, emphasis on safety * Debt to equity, price to book and other important metrics   Brad: excellent yeah, thanks, Dave. So the first question and I want to ask is around stopgaps and there are you know listen to all the podcasts and you talk about I believe you said it’s 25% less of the value that you bought it out of stock and we’re on though is when that gets triggered and are you instantly just selling or do you do little bit of digging around what’s the reasons behind that? Andrew: so this is very personal depending on how people want to utilize trailing stops I’ve talked on the podcast in the past about how I split my portfolio into two. So I have the part of the portfolio that’s strict with trailing stops and then the part that is more of like what you’re talking about where if something goes wrong I’m going to dig into a deeper look to see if the stock price that’s fallen is really because of bad fundamentals, bad company financials, or if it’s just because the crowds kind of lost their mind. In a sense where they’ve had pessimism, but you know that from a fundamental standpoint it’s just temporary and that the company will be able to recover over the long-term health. If the company is not compromised when I saw when I do trailing stops I stick very strictly to those and that is because I’m making that portfolio I talk about how sometimes it’s a little bit more risky in the sense that I’ll maybe chase stocks with less of a track record of like growing the dividend for example. Maybe less stability, I’ll get more of more of the margin part of the margin of safety but always within the context of having a good balance sheet, having low debt. So because that’s the parameters of those stocks that I’m picking, then I’m super strict to the trailing stop. It’s once the end of day closes at 25% loss or greater then I’m selling that next business day. Other people can kind of look at trailing stops in a different way you can approach trailing stops differently if you’re let’s say like another way that I could see somebody doing it that would work out well. Would be to do trailing stops and be flexible on the upside and not the downside. So what I mean by that is let’s say a stock just went straight down 25 percent when you bought it don’t you know that you that trailing stop is there to protect your downside. So don’t let that like don’t debate it at all just follow the challenge stop at that point. But let’s say your stock went up 50% and then lost 25%, maybe at that point you want to say okay well I’m already up on the position I don’t have to be as strict necessarily. I’m protecting my downside because the stocks already made such a great profit and then kind of dig in from there and see okay do I see this as just a short obstacle that I will eventually overcome and that the company will eventually overcome, and so it turns out I was right with the pic,
November 27, 2017
Welcome to Investing for Beginners podcast, this is episode 40 in which Andrew and I are going to talk about “The Richest Man in Babylon” a book that was written by George S. Clasen.  This was written back at, but we even know the 30s is that correct? * Learn to save money * Put your money to work for you * Find a way to increase your income, either from a side job or a raise at work * Use compounding to your advantage Andrew: yeah man I don’t have a clue, hopefully, glean something out of it. Dave: okay fair enough, so we’re not exactly sure when the book was written without having it in front of us. Yeah but it’s one of the easiest books to read, and it is amazingly insightful, and it has a lot of great advice about personal finance. And it was one of the first books I read when I started digging into investing in kind of personal finance. And again the name of the book was The Richest Man in Babylon, and we’re going to talk about the seven cures for fattening the purse. So he has seven different cures that Andrew and I are going to go through and talk a little bit about so I’m going to have Andrew go ahead and start us off with number one. Andrew: Yeah, I mean I think everybody out there who wants to complain about finances. If sees himself in as a tough situation and wants to crawl out of it should read this book and listen to this episode over and over again. Because a lean purse I mean you can just see that imagery and when you hear those words and this very powerful love. The ancients you know these dislike very ancient mythological kind of theme that he put to this book. So and yes it was one that I also recommend it, I recommend it in my Seven Steps to Understanding the Stock Market. I have a post where I recommend various investing books, and this is definitely up there it was one of the first I also read and just picked it up. Probably didn’t put it down until I finished reading through, it’s an easy read, and that’s super insightful, and it can inspire you because then you feel like you know what to do next because that’s the thing about a lot of these concepts we like to talk about on the podcast. If you’ll notice Dave and I will focus more on timeless principles rather than you know what’s what was hot on CNBC yesterday I think there are certain principles and fundamental philosophies and foundations that really will work no matter if it’s 2017 or if it’s 3017. You know what I mean it’s just one of those things and we’ve seen it like you say I think is the 1930s. I’ll put them through the book looks like he has versions from late 1920, the 1930s and 1950s. Even so, I’m sure there’s plenty of versions of this book, so this is something that you know they say when you talk about books. The longer, the older the book is, the more valuable it probably is. Because if people are still talking about it today I mean just really stood the test of time and The Intelligent Investor is o...
November 17, 2017
Welcome to Investing for Beginners podcast, this is episode 39. Andrew and I are going to respond to an email that Andrew got asking us some questions. So today we’re going to talk a little bit about some of his questions, go in-depth and answer those for him. So without any further ado, I’m going to turn it over Andrew, and he’s going to take us through some of the questions. * How trading fees can affect your investments * How IRAs work * The differences between a Roth and a Traditional * The benefits of a 401k * Some pros and cons of Robinhood Andrew: thanks, Dave, okay this is from Kurt.  Kirk says “Hi Andrew, I recently less than two weeks ago came across your podcast and found it so useful and informative. Then I went back to the beginning and then in the process of binge listening to my way through the list of 30 some episodes.” Andrew: which by the way I say that I highly recommend doing that I remember when I first started listening to podcasts I went through archives of the ones I liked and that’s a great way to you know get knowledge and get acclimated with what’s going on with these topics of these podcasts. so continuing to read on with the email “before discovering the Investing for Beginners podcast I loaded RobinHood on my phone and began thinking about which stock or fund to purchase. I’m glad I found you when I did, I still don’t have a clue which will be my first purchase, but I now understand that my original selection would have been based on greed for something that is likely overpriced or has other indicators of a poor investment.” Andrew: sidebar again, that’s very insightful and good job there Kurt at recognizing that and potentially you know you probably saved yourself thousands of dollars in losses and pain by stumbling onto this resource and really taking it to heart and picking it up really quickly, so that’s great back to the email Kurt says so “I set up my account with Ally, and I’ll keep reading and doing company research. I hope to make my first of many regular monthly investments around Thanksgiving, possibly sooner if something happens to cause the market to dip. thanks again for educating beginners like me to save us from ourselves.” Andrew: you’re welcome, very well put. “I’m finding this to be fun and refreshing after 20-some years of dealing with mutual fund and annuity managers who offer little help and don’t have a clue on how to be an intelligent investor. Andrew: Now to the questions. Do they, so he’s talking about Ally’s  $4.95 trading fee. He asked: do they charge both buying and selling or one or the other? So some of these are just going to rapid fire. Dave, I know you know the answer. Dave: that would be yes. Andrew: yes so you got a fee on the buy fee on the sell. How much does the investment need to appreciate before one makes that back? Andrew: I mean that’s going to depend on how much you’re putting in. So I believe we’ve talked about it before but on 150 dollars a month that’s anywhere from one to three percent of a loss like right off the bat. If you’re going to invest more than that obviously making $4.95 back isn’t that big of a deal. That’s a big reason why I always talk about you know try to have at the bare minimum one hundred and fifty dollars to invest. So you’re not losing five, ten, fifteen percent straight off the bat just off of a transaction fee. When you when you talk about a thousand dollars or more it that $4.95 is unsubstantial and you know you don’t have to make you don’t have to worry about it you don’t have to wait a long time to make that up. and even in the grand scheme of things I mean you’re going to see stocks go up in you could see him go up a...
November 10, 2017
Welcome to Investing for Beginners podcast, this is episode 38. I’m Dave Ahern, and we have Andrew Sather here with us tonight. Tonight we’re going to have some, the fun we have a special guest with us tonight. So we’re going to be interviewing Maj and Maj is from Geo Investing.   * The differences between minor caps and small caps * Defining information arbitrage * The advantages of reading press releases * How to confirm management statements * The importance of footnotes in financial statements, especially subsequent events     that’s the name of his company, and he’s a very very interesting guy, and this is going to be a lot of fun so without any further ado, Maj would you take a moment and tell everybody about you and kind o fwhat you do and who you are where you from and all that kind of fun stuff. Maj: excellent yeah well thanks guys for having me here. This is an opportunity; I love talking to other investors and learning new things and every day and hopefully be a little bit today from each other. So you know Geo Investing was launched in 2007 when our tenth year anniversary geoinvesting.com and you know it’s you know it’s a site that we brought I co-founded with my partner Dan and you know we launched it with the intent to help educate investors about the advantages of investing and smaller capitalized companies. Small caps, minor caps you know and it to help understand how they can get an investing advantage doing that. And you know in the increasingly competitive environment and you know we’ve been doing that and we it’s been an awesome ride, and we bring our products to our members through morning emails, through model portfolios, through a lot of proprietary research. And you know and our we call our investing call to actions which are what we’re buying and selling. We do a lot of long stuff, mostly long stuff, but you know we pay attention to risk factors so once in a while you’ll be losing called portfolio protection and if we find some bad apples in the smaller capitalized space. We’ll talk about it because we think there are too many bad apples out there you know surprisingly since 2008 you can be less. But you know we’re out there to help protect our membership base and our subscribers from you know finding these value traps, unsavory management teams and you know we were a unique blend in that you know you resource is intense. You know you’re either going to love us like this is crazy, and we’re very we disclose everything we do, and we know what this unique blend offers our members to be able to hey you know one of these guys doing this. I’ve been doing this for almost thirty years now, so I want to experience, and I’ve made a lot of mistakes myself, and they get to learn from that, but it’s also for the investor who wants to do their research. you know we have a proprietary research of over 1,000 research pieces on needing honest on the space and I kind of make it akin, like I make acomparison with like the value line from like our caps you know value line is a great source that you I learned and did use when I knew first getting into investing. Studying Peter Lynch and the kind of you know started my whole routine and what part of my routine when I was younger wow I wish that existed for really really small companies. The few quality ones out there, so that’s kind of what you know where we’re at these days. And well I love our reasons we’re tracking a reason for tracking is like really quick. Again if you don’t have internet I’m you know quick five to ten reasons I like a stock we’re getting into it, and it takes the system I remember through our whol...
November 3, 2017
Welcome to Investing for Beginners podcast, this is episode 37. I’m Dave Ahern, and Andrew Sather is here as well. Tonight we’re going to talk about Peter Lynch quotes. This is one of Andrews’s absolute favorite investors. He read his book quite a while ago called Beating the Street and One Up on Wall Street, and he loved them, and so we thought maybe we would chat a little bit about quotes that Peter Lynch has. * Find businesses that sell to other businesses or B2B * Know what you’re buying and why you’re buying it * All the math you need to invest you learn in fourth grade * Investment ideas can come from anywhere And talked a little bit about his investing philosophy and his ideas and saw how they could help you with your investing. So without any further ado, I’m going to have Andrew go ahead and take us away. Andrew: just as a disclaimer, I haven’t read One Up on Wall Street yet, that’s on my to-do list. Oh, guess I’m missing out right but Beating the Street was the first investing book I ever read. It’s super easy to read like I just couldn’t put down the book and I mean I guess I could say the same thing about the Intelligent Investor.  But I’m aware that the Intelligent Investor is a lot harder to get through, it’s a lot drier but Beating the Street, he writes in very conversational tone. It’s almost like a story following his journey in his career and for people don’t know Peter Lynch. He ran the Magellan fund from Fidelity, so super successful in those times he had beaten the SP500 for 11 of the 13 years he ran the fund. He turned 18 million dollars in assets into more than 14 billion, so he did the whole Michael Jordan thing. if Michael Jordan would have stayed retired where he became the best and then just retired at that point. You know 13 years is such a small period as an investor, so he came out on top and just stopped there. I know I think he talks about just having more of a really easy life and how he didn’t want to be researching as much as he was to find this kind of deals. One of the things he talks about one of the terms he uses is called a ten bagger. so that was his idea of basically when a stock you buy gets 10x of its value, he calls that ten baggers and he has different strategies in Beating the Street of how he tries to pursue these ten-baggers. That was one of his unique takes that he contributed to the investing world, and obviously, the two books which you know Dave obviously recommends One Up on Wall Street, I highly recommend Beating the Street. These books have sold millions of copies, and he has had contributions there, and he’s also had some great quotes just talking about the stock market in general that we would like to share with you that you should keep in mind. We’ve had quotes from Warren Buffett Seth Klarman, we did a Benjamin Graham episode, so put these in your back pocket. And if you’re taking notes may be put these quotes down in your notes, and you know we talked about checklists the other day with one of the episodes. They had a great breakdown on different buy and sold checklists. I just actually got an email from a listener today who said that he’s working on his stock checklist and so he’s finding the resources we’re providing to be very helpful for that so hat tip to Dave and if that’s the kind of thing that you’re doing with your investing style. Have something that you can refer to over and over again and you know it’s it might not be easy to read a whole book like some of these legends has written and authored.
October 28, 2017
Welcome to Investing for Beginners podcast this is episode 36, I’m David Ahern, and Andrew Sather’s here as well. Tonight we’re going to talk about Tesla. Tesla’s going to be our whipping boy tonight, so I’m going to start off by chatting a little bit about an article that Andrew forwarded to me. He subscribes to the Stansberry digest, and Porter Stansberry is one of Andrews mentors and one of his favorites He sent me this email a few weeks ago that was kind of awesome, and it talks a lot about Tesla. So I thought that would be a great place for us to start and we’ll just kind of riff off of that. So I wanted to talk a little bit about just kind of quote here from the article real quick and then we’ll kind of get into it as Porter says. “As we explained many times. It’s not that we have a problem with the electric carmaker’s products rather it’s Musk’s questionable ethics and the fact that it’s simply a terrible business Tesla has missed virtually every manufacturing deadline and sales target it has ever set. It loses money on every car it sells, I’m going to say that again it. Loses money on every car it sells. despite forcing taxpayers to subsidize a huge portion of the cost and has burned through nearly 10 billion since 2012, 10 billion, holds another 10 billion in debt and has never ever turned a profit. And yet somehow we’re supposed to believe the company is worth more than 56 billion today. I believe it is the largest by market cap automaker in the United States as we speak today.” Which is just obscene, so I think those facts kind of speak for themselves. But I know Andrew has a few things you’d like to say about this, and we’ll get going Andrew: oh yeah, I mean that fires me up, so it was a very timely email to because one was it back in October 3rd, so that’s when I got this email from them. And then today it’s the 14th when we’re recording this, and it’s big in the news right now that Tesla just laid off 400 workers. So when you talk about like the whole ethics of Tesla, the company and you know obviously we’re going to get into the financials and the valuation and the stock price and how all of that relates to itself. And so you have to know just like we talked about with snapchat and one of our previous episodes just like we’re always pounding the table about how there are these bubbles. There’s been bubble mania, tulip mania all these sorts of things that we’ve seen historically and Teslas like a spitting image of that. Today with the way that its stock price has gone and what it’s continuing to do despite the fact that like you just said they are losing money. Not only from a complete earnings perspective as far as total annual earnings but their car sold. That’s kinda ridiculous, and that’s bad, and a reason that I have such a big problem with it is not only is it against what I how I try to invest. Obviously, I’m always we’re always talking about going for a margin of safety with the emphasis on the safety. So preservation of our capital is number one, we’re trying to get into these companies that are very strong financially, and Tesla unchecks all those boxes. It’s not in a great strong financial position, it’s not creating lots of earnings and profits and dividends for its shareholders. Not only that but there’s like the email said there’s like a moral, ethical side to this that that’s not discussed much. And you know I’ll be far from the first person to say that I’m some altruistic guy who has great intention. You know I’m not like the Pope okay, I’m very, very selfish and a lot of the things I do are very stuff selfishly motivated.
October 20, 2017
Welcome to Investing for Beginners podcast this is episode 35. Andrew and I are going to talk about the dividend discount model today. So we’re going to have a little conversation about a formula, this is something we haven’t done a whole lot of, and without any further ado I’m going to have Andrew go ahead and start us off What we will learn today: * What the dividend discount model is * How to find the info to plug into the model * Intrinsic value can be found using this formula * Works best for dividend-paying companies Andrew: Yeah, actually I was just going to give a little intro. So Dave and I are working on something on the side. Still too early to say what it is yet. But I’m excited because we’re working on something big, and it’s something that people have asked for. I think it’s one of the best things you know we’ve ever done even with all these podcast episodes. So today’s episode is going to be kind of derived from that. Some of the lessons that we’ll learn here really parallel. So I’m excited for this one. I also wrote an email earlier today about dividends, and obviously, I do that a lot. But in a way it was relating dividends with evaluations, so this is kind of like perfect timing to take what we’ve been working on. Take what Dave’s been working on behind the scenes and give you guys a sneak peek of what’s to come in the future. Dave wanted to start off with a dividend discount model or models that you have been worth looking at any kind of studying. Dave: okay, all right awesome so well thank you for that. So dividend discount model, so this is a formula, and we’re going to talk a little bit about that formula. The dividend discount model is one of the easiest ways to value a company that pays a dividend. And there are many ways to do valuations; there is the Benjamin Graham formula, there’s a discount of cash flows. Dividend discount model is one of the easiest ones to do. There are only three inputs to it, so it’s super simple. You don’t have to have higher math skills to be able to do this. It’s not extremely complicated; there’s not lots of different variables and formulas and things you have to figure out. It’s information you can gather pretty easily and put it together, and it can give you kind of a framework and a guideline to look at when you’re trying to value a company. Especially a company that pays dividends, so what this company, what this model will work great for are any company that’s going to pay a dividend. So whether it’s going to be something like a REIT, which we talked about last week, whether it’s going to be just a normal company like let’s say Microsoft. Or somebody of that ilk you know anybody that pays a dividend this will work for. What it won’t work for are companies that do not pay a dividend so, for example, Tesla, Facebook, and Netflix. So notice those are really big companies, Google none of these companies pay a dividend so this particular model will not work with them. So that being said let’s talk a little bit about the formula. So the formula is also known as the Gordon growth formula, there’s a professor back in the 1960s that popularized it. It was created in the 1930s, but in the 1960s it’s kind of really when it became more popular and was utilized much more. When we buy a stock when an investor when we buy a stock we expect cash flows to come from two areas. One is the current and the future dividend payments. The other one is to increase is an increase in the value of the company as its being held. So as we don’t hold a company over the course of its lifetime, as it goes up in value that’s going to be one of the other cash flows that we’re goi...
October 13, 2017
Welcome to Investing for Beginners podcast I’m Dave Ahern, and Andrew Sather is as well. Tonight we’re going to have a special guest with us. What we are going to learn in this episode: * The difference between fundamentals and technical analysis * Having a great mental state of mind helps your investing. * The motivation behind analysts recommendations * How to make education part of your everyday routine His name is Sasha, and we’re going to have a little conversation between all of us so without any further ado Sasha, wouldn’t you go ahead and tell the two or three people that are not familiar with you out there a little bit about you. Sasha: Hey thanks for having me. A little bit about me as far as I guess my background goes that’s related when it comes to stock trading. I mean I got into stock trading when I was a young teenager, and a lot of that comes from taking the funds that I had when I used to do a lot of web development. So my mom was into investing simply because she was a private healthcare nurse and all the older folks. What they did in Florida was watch their investors, watch what their investments and see how things were going. And slowly she got interested in that and slowly I got interested in that and all the money that I made from the web development, graphic design field and marketing as well. As time went forward, I went ahead and put those on investments, had a lot of losses at the beginning of course. One of the larger ones was around fifteen sixteen thousand dollars when I was still a teenager. And you know took me probably about seven-eight years to put the puzzle pieces together slowly after college there started to put things together and that’s when a lot of things fell into place and a lot more consistent at that point. So I was always big into education, teaching martial arts as well early on in my years and because I loved education. Was a study not read a lot of books, video courses anything I could get my hands on. I decided to sell a bunch of my old businesses like my web design business photography business, a lot of the graphic design entities that I owned and went into just teaching investing. Now doing full-time investing in teaching investing pretty much or business related things. So that’s the quick summary as far as my background in history. And now that’s kind of what I do is I just in my spare time I write books and create video courses and online videos. Most of it 99% is free, and I’m watching my investments pretty much every single day. And as I look at the screen left, and right I’ll also dabble in write a little book. So that’s kind of what I do on a day to day basis. Andrew: you’re very modest because you do have a large time on YouTube over at tradersfly.com. Can you talk just a little bit by the way you approach the markets? Is there I know there is a general strategy can you just maybe cover that on a like 101 basic level of how you look at the markets and where you see opportunity and how like what the action plan is to capitalize on that opportunity? Sasha: okay the way I look at the markets is going to be more different than I think many other people look at it. And I say this because I’ve had a lot of coaching students that I’ve worked with especially at the beginning of the way that I see initially people get attracted to the markets. The way that they see things in the way that I look at things a lot of people look we’re trained especially through a lot of the news media through a lot of articles. And even so many books to concentrate and focus a lot on fundamentals and focus a lot on the company’s focus. What the companies do and that’s great from a larger perspective when you’re looking at a 5-10 year investment or hold period.
October 6, 2017
Welcome to Investing for Beginners podcast, I’m David Ahern, and Andrew Sather’s here tonight. We’re going to talk about REITs. We have episode 33 tonight, and we’re going to talk a little bit about REITs. What we will learn today: * What a REIT is * How to value them, hint: the same way as any other stock * How a REIT can help your portfolio * REITs can give you exposure to the real estate asset class * How to treat dividends in REITs from a tax perspective * Whether or not they are a good investment for you. We had a listener comment on our podcast earlier a couple of episodes ago, and we wanted to go ahead and answer his question and speaking of answering this question. Andrew has his comment up, and he wanted to go ahead and get us started. Andrew: yeah so this is from Bart. He says this was a comment he left on the blog on one of the episodes. He says “guys love the show. The quick question whether your thoughts on REITs, they seem to pay high dividends but is there a catch?” So maybe we should start off and introduce what a is REIT. Its REIT stands for Real Estate Investment Trust; it is basically like it says in the title it’s a trust and it usually holds a portfolio of real estate different properties. And there are different categories that you can see when it comes to these. Some of them will hold commercial real estate so think the malls and office buildings and the real estate that’s attached to those. Some of them do residential real estate, there are other types which I don’t know the nitty-gritty on all of them. But there are quite a few different industries around REITs. And so basically they hold these basket of real estate properties, and they hold them and their income-producing properties. Then what the owners will do is they’ll reallocate those whatever income comes from the trust then gets distributed to shareholders. So it works like a stock as in you can buy it in the stock market on an exchange. You can see that price go up or down you get paid a dividend based on what the earnings are, and so it has a lot of similarities to stocks, but it also has some technicalities which I think we can get into as. Dave: well yeah they’re they’re interesting, they’re different beasts for sure. They’re you know the valuations of them are a little different than other regular stocks. Just because of the way that they’re set up. And you’re right on the money about the different types of REITs and you know I’ve read different things about REITs in some information about them and you know I’ve seen different blogs and listen to podcast people talking about them. Preston and Stig, two of our favorites had a great interview; I guess another interview I’m sorry they had a question-and-answer session not too long ago that Andrew was telling me about before we went on air. That they talked a little bit about REITs on there well, and they had some great comments on the REITs as well. And so there’s a lot of great information out there about REITs and you know the thing that I kind of like about the REITs is I remember when I was a young kid my dad told me once that land was one of the greatest investments you could ever have because it’s a tangible asset. And it’s something you can always own. Being somebody that’s not coming from a lot of wealth you know having the wherewithal to buy large plots of land to just kind of sit on and try to recoup that money at some point in the future is not something that’s really kind of in my nature. The whole buying the house thing and flipping thing that’s just not me but REITs gives you that. The cool thing about them is they can give you a kind of an entry level into having a bit of real estate in your portfoli...
September 29, 2017
Welcome to investing for beginners podcast I’m David Ahern, and Andrew Sather is here with us tonight. We’re going to talk about investing checklists; we’re going to talk a little bit about when to use checklists and how they can help you when you make buying stock decisions as well as selling stock decisions. * Checklists can help control your emotions * They are great at helping you avoid mistakes * They can be as short as four questions or as long as hundreds * Stock checklists are perfect for buying and selling decisions I’m going to start us off and talk a little bit about my friend Mohnish Pabrai. I’ve talked about him in the past, he’s an investor that’s originated from India, and he’s a value investor cut right out of the Charlie Munger, Warren Buffett ilk. He’s very conservative, and he’s been very very successful with his investments I believe he’s in the high40% range in returns over the last ten years or so so he is one of those gentlemen who has a very concentrated portfolio. I believe he only has six or seven stocks in his portfolio right now and the majority of them is in actually one or two companies. He’s written a book called the Dhando Investor, and if you have not read this book, it is fantastic. It’s effortless to read, and he lays out a lot of his investing principles in the book. He’s very very well-read, and he’s a great writer I’ve talked about this before, and I enjoy his writing, and he’s just he’s one of those people that’s so smart that he’s good at explaining things. It makes it sound easy and Andrew, and I have talked a lot about this. These are simple ideas that we talk about, but they’re not easy to do. So with some of the checklists that he speaks about in his book, I’m going to kind of outline those a little bit. These are some of the things that I use when I’ve created my checklist, and one of the things that I wanted to kind of say well as we talked about checklist tonight these are personal decisions that you make. Andrew and I are going to give you some ideas of some things that we use and our checklist. But I agree on withMohnish Pabrai. He has never revealed his complete checklist, as well as Charlie Munger, has not and Warren Buffett because these are personal ideas. These are things that you have to experiment with on your own. You can use some of the things that Andrew and I talked about today as guidelines, but you know as you get more experience with your investing. I would highly encourage you to create your checklist kind of go from there. some of the things that I kind of use is a guideline for me. * focus on buying an existing business * buying simple businesses and industry with a superslow rate of change * buy distressed businesses and distressed industries * buy businesses with a moat that is a big one * bet heavily with the odds are overwhelmingly in your favor * buy businesses at big discounts to their underlying intrinsic valuing-ding-ding that’s huge for us * we’re low-risk high uncertainty businesses, This is a great place to start as a framework for a checklist, and I’m going to cheat a little bit about each of these a little bit, review so you can throw your two cents worth as well. Focus on buying existing businesses for me this is all about looking for companies that are already out there. We’ve talked a lot about IPOs in the past and IPOs are can be a very dangerous thing to get into. So looking for a company that’s already in businesses already doing what they’re doing for several reasons. One you’re gonna know where the sales are coming from where the profits are coming from where the earnings are coming from whet...
September 22, 2017
Alright, folks well welcome to Investing for Beginners podcast I’m David Ahern, and we have Andrew Sather with us tonight we’re going to do a little something different off our normal beaten path. We’re going to interview someone tonight; we have a guest with us tonight who has found success with finding freedom from money, and his name is Justin. * You can retire early if you plan and stick to your plan * You don’t need to make seven figures to retire early * The 4% rule and how it is your friend * Patience is a virtue in the stock market * Being frugal and enjoying the simple things can lead to lifelong happiness We’re just going to go ahead and chat a little bit so without any further ado Justin could you give us a brief synopsis of your life up to this point tell us how you got where you are. Justin: Yeah, sure thing, so I’m Justin I retired at 33 four years ago almost to the day. I used to work as an engineer here in Raleigh North Carolina about ten years right out of college. Started working and you know to save my money invested it bought a pretty basic house here in Raleigh and just did not upgrade the house didn’t upgrade the cars until after I retired. I married my wife is also retired now she just she retired in her 30s, and she’s just crossed another big milestone birthday. So I’m not going to say how old she is but probably best yeah she might if she listens to this but she probably will she’ll probably do some, so she’s 29 again. We also have three children age in12 and five, and as a few days from now, they will get all three in school all day, so it’s a big transition period for us to have some free time during the school week and yeah that’s that’s pretty much you know me in a nutshell. Andrew: nice I love it. I’d like what your typical day sounds like because I a lot of us who are listening to the podcast. We see financial freedom as kind of the ultimate goal and that all mean different things, for different people. You know what’s there’s a lot of work a lot of discipline and a lot of saving and investing. And so you know why should we go through all that and what kind of things can we look forward to if we do finally achieve financial freedom. Justin: yeah sure I guess the at the big picture level there’s sort of a bipolar lifestyle I’m living during the school year when our kids are in school from roughly September through the end of May early June about nine months per year they’re in school. And, so we’re here in Raleigh NorthCarolina I’ve taken an easy kind of slow pace of life lots of relaxation. Simple stuff around town and then the another part of our lifestyle personality is a big summer trip. We’ll go somewhere big for the summer this year we went to Europe for nine weeks. in the past, we’ve gone to Mexico for seven weeks a road trip across the US and Canada for three weeks three and a half weeks. We did that kind of trip twice in the past few years, so you know summertime big trip. School year more laid-back local stuff around town on a daily basis it varies every single day between I might have some volunteer stuff at one of their school’s other stuff in the community. I have to go on you know going out for a walk going out for a hike around here somewhere in a nearby park walking down to the grocery store. You know getting coffee with a friend or somebody new that I’ve met hanging out people on the weekends having dinner parties over here having people over for you know pizza and beer kind of stuff. I enjoy video games, and Netflix is another pastime of mine. I also enjoy my hammock with a goodbook, it really depends today we spent several hours at a Children’s Museum in the mi...
September 16, 2017
Welcome to investing for Beginners podcast I’m David Ahern, and we have Andrew Sather here as well tonight. We’re going to do a review of an article that I came across from a blog that I read on a daily basis. It’s called the Acquirers Multiple, and it is owned by a gentleman named Tobias Carlisle. He’s a very very amazing writer, and he’s written some great books. And he has this blog that he’s a member of that one of his authors that work for him writes some great articles. The article that I came across I shared it with Andrew a couple of weeks ago, and we both liked it, and we thought this would be a great opportunity for us to talk a little bit about a gentleman named Seth Klarman. We’ve talked about him a little bit in the past before, but this article that was written kind of outlines 13 tips on how to find bargains. Seth Klarman if you’re not familiar with him has written an amazing book on the margin of safety, and it’s unavailable more or less. You can buy an Amazon I believe for a cool thirteen hundred dollars a book if you wish. Apparently, he did not release a lot of copies of the book and so it’s very very rare and hard to find I was fortunate enough to be able to find it. I read it through the professor of the local college had it, and the finance professor was kind enough to allow me to borrow it to read it. Andrew and I are going to kind of pick and choose through the tips that the gentleman shared in this article. It’s a commentary from the collected wisdom of Seth Klarman, and it’s a compilation of quotes from the by Baupost Group founder Seth Klarman. He writes an annual letter just as Warren Buffett does, but it’snot available to the public. It’s usually only available to his you know the people the insiders the people that invest in his fund. What we will learn in today’s episode: * How to find a Margin of Safety * You need to do your research to find great companies * Be patient and wait for your pitch * Buy low and sell high, look for fear and greed in the market * Don’t try to time the market, look for your value and buy with a margin of safety So I’m going to read a couple of the quotes and talk a few minutes about them and then Andrew is going to do the same. I also will link to the article in the show notes for this episode so that you will be able to find this article and read through them as you wish and find some things that you might like. The first one that I came across that I liked was “great investments don’t just knock on a door and say buy me.” That is so true, and they do not just stand up and say hey here by me I’m cheap I’m going to make you tons and tons of money. It takes work to find great investments; there’s a lot of due diligence that you have to put into to be able to find a great investment. You know Andrew, and I talked a lot about you know buying with a margin of safety, and this is a huge proponent of Seth Klarman’s investment philosophy, and there is a lot of effort that takes to go to find these bargains or these gems if you will. They’re not things that are readily available or that just kind of leap out at you. A lot of times you have to look under a lot of rocks to try to find you know the one that you like and I think that’s a great quote and that struck me when I read the article that was one of the first things that kind of jumped out at me.
Loading earlier episodes...
    15
    15
      0:00:00 / 0:00:00