Warren Buffett's Value Investing Formula (For Dummies)
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- Опубліковано 18 чер 2024
- Warren Buffett is widely regarded as the most successful value investor of all time, alongside investors like Benjamin Graham and Charlie Munger. Today we examine the value investing strategy by listening to Buffett/Munger disciple Mohnish Pabrai, to learn how to implement this strategy for beginners.
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DISCLAIMER:
Neither New Money or Brandon van der Kolk are financial advisers. The information provided in this video is for general information only and should not be taken as professional advice. There are risks involved with stock market investing and consumers should not act upon the content or information found here without first seeking advice from an accountant, financial planner, lawyer or other professional. Consumers should always research companies individually and define a strategy before making decisions. Brandon van der Kolk and New Money are not liable for any loss incurred, arising from the use of, or reliance on, the information provided by this video.
There was nothing to comment but i wrote a comment coz it helps the youtube algorithm so i did it
That may be the most useful comment i have read all year.
Out here doing the lord’s work
u commented the shit outa that comment too
This is also a comment on your comment. (•‿•)
Comment of the year
Mohnish said something like “If you see a cow, you don’t have to weight it to tell that it is big and fat”. That made sense regarding valuations.
Love the analogy!
The same sentence was said by Warren buffet in 1995 annual meeting
Man carry on like this, your videos are incredibly helpful
Very useful and well explained, both by Mohnish and you. Thank you for your valuable work!
Monish explains Buffet’s philosophy so well. It is great to know that his legacy will continue on.
Great video! At first I didn't really know how to look at the management part but now I understand where I can start.
I love your intro motion graphics! Great video as always
Thank you for this interesting and helpful video. I like how you broke down value investing into four basic parts. One note about Tesla -- they have yet to make an affordable car. So I think they haven't achieved their master plan goals yet.
Love this channel! The temperament is so key.
True!
Absolutely fantastic breakdown of Warren Buffett's value investing principles! This video does an exceptional job of distilling Buffett's approach into four key steps: understanding the business, recognizing a durable competitive advantage, evaluating management integrity and skill, and buying at a discount. It's enlightening how the narrative ties these elements with real-life examples and interviews, particularly highlighting Monish Pabrai's adoption and success with these strategies.
The lesson here is crystal clear: investing isn't just about throwing money at stocks; it's about thorough understanding and patience. This method teaches us to focus on businesses we understand deeply, recognize their competitive moats, scrutinize their management, and ensure the price is right. It emphasizes that great investments aren't made daily; they come from waiting for the right opportunities where the value is undeniable. This is not just investing; it's a disciplined approach to building wealth over time.
Very good. Your videos are great very honest and sensible. Keep it coming
For the last 8 months I have been navigating the world of investing, and at 26 years old I have determined most of my $ will be a s&p index. Finding a great company at a discount seems to be very difficult.
I do the same and only buy individual stocks when I find a no brainer. Rest of my cash goes to sap 500 or asx 300
Well in theory a company that will grow 20% next year is at discount this year. Of course you want to buy at the lowest point in the year but essentially you want to invest in companies that will grow 10-20 years.
Personally, I'd skip the insistence on a discount and consider growth potential as part of "value." When I bought 200 shares of NVDA at $100, that wasn't considered a discount; it's $300 now. If I had waited for a dip below $100/share, I'd STILL be waiting.
@@epbrown01 It is 3 times now,... capital gain? or still waiting,... for 1100%? Hohohohoho,...
Thank you very useful information. God Bless!
Great content! Learning a lot !
Thank You for your valuable videos!
Thank you for the careful, rational information so needed right now!
Outstanding channel! Thank you.
As a newbie (2 years in doing research every day), the hardest for me is number 3. Due to my lack of experience with business, trying to find the organic motives of management is incredibly hard for me. Stock dropping 30% is easy for me to stomach. When there’s something to do with the management, I become wary.
same here. Been in the investing world since like thee age of 14
@@ibnbhai are you doing well in your investing ? Or no
your channel and this video are awesome
amazing and extremely clear video
Great video, but one thing that I'm really not sure about, is how many stocks should we aspire to hold in our portfolio? Do we settle for 5 stocks, or do we invest a little in 20 different ones instead?
Very good content, thanks! Have a great day!
I’m new in the market of stocks and etfs. I’ve watched a lot of different videos and yours by far are the most educational and easiest to understand! Thank you
I have been investing for a while and this kid is good. I like him.
I've been watching videos about investing every single day for a month, and this is one of the few where I feel like I'm not getting ripped off by someone with an agenda.
Well done, well video, well content, well educating, well everything
Thank you so much!
Thanks for this.
Bro you're doing a great job in no cost charges. Really appreciate your Hard Work ❤❤🤞🤞
Fantastic video!
Great video in short and clear
Overall your best video.
Amazing value provided 👍🏾
Thanks for making this clip. It was perfectly times for where I’m at in my investing journey.
Great and its a learning video indeed❤
Great video as always. But please remove that token background music going forward - its on EVER video 😂
Great advice
thx mate
WARIO took Mario's advice and became an investor lol
Hi Brandon, I have a video content suggestion... Where to invest some savings I won't need in the near future (let's say, in 5 years)? Thank you
Thanks bro
Man. That was a really great video!
There are few men who are expert in trading i count Richard Mark as one because of his unique trading strategy
Where is the link to your course?
Perfect video of investing
This video is great!
I was just thinking about this the other day. I thought, "I should invest in things that everyone uses without even thinking about it." So I thought about the most popular brand of toothpaste, the most popular laundry detergent, the most popular brand of razor blades, etc. Turns out they were all products of one company!
Procter and Gamble
Exactly, this is how you should invest. I've had McDonald's in my portfolio for years now. I know that the golden arches are a significant part of children's lives nowadays. Cost leadership is one of their main advantages, but many also don't know that McDonald's owns the land and every building outright, and most of their revenues come from the franchisee's building lease payments rather than selling food.
Also as one of the largest real estate holders in the world, they can operate at a significantly higher margin than their competition because in many cases KFC, A&W, Baskin and others have their stores setup on McDonald's land, making other large chains a McDonald's client through leasing. A fantastic strategy. Oh, and also when was the last time you passed by a McDonald's and saw it empty? Yeah😂
I would say in investing, your petience is directly proportional to your returns.
My challenge with the circle of competence is I'm a minimalist. I'm not really brand loyal to anything.
However it has led me to look at generic brands and services that are unavoidable for any lifestyle. Everyone needs to eat and have a place to live, and everyone will eventually need some form of standard non-emergency, non-life-threatening healthcare or general care.
I don't know anything about highly technical specific disease research or innovations, but I do know that people need to have affordable generic medications and proceedures for common health concerns.
Kinda how I am too.
good vid.
My new year's resolution is going to be to look after my health by not looking at my disastrous portfolio every few hours
anyone have the link to this Mohnish interview?
TIY
Good contents
Monish is the bridge between Warren Buffet and Peter Lynch. Three wise men
As a non professional, is anything within my circle of competence? Seems like this video convinced me I’m better off in funds and etfs.
Don’t bother stock picking just DCA into S&P 500 and be done with it.
Buffett is 20% return annually tho
@@Charles50Kal Great point. Taking the whole of S&P's existence it does only 9.8%.
I-Series bonds will do nearly that, no state taxes and low risk to boot. If 9.8% is all I wan't I'm going I-Series!
S&P's is a bit like Vegas---if camping on it blindly.
From 1928 to 1955 it made nothing! Same with '55 to '74. '74 to '83 is similar. So many long periods of awful returns makes it gambling that the market will keep streaking upward in whatever time-frame you will need your money.
super!
Copying another person is one thing but to understand why that person did it is another.
Well can you and should you increase your circle of competence?
You wouldn't have one unless you grew it at some point, right?
Making strategic pivots or simply learning new things is highly recommended.
Just like you go to Atlantic for gamble the promoter marketing show signs along the road way you could earn big if you gamble
Also from businesses deal that connected to recession
Why do each of us has to become a value investing expert ? Is the company value an absolute reference or is it subjective to each investor's opinion ? So why don't we just see a "value" index or etf that every one could buy ? Otherwise is it just luck ? one person in a billion can have 20 consecutive lucky bets ? Or does value investing gets dilliuted as soon as it is an index shared with everyone or broadcasted by an influence ? provocative questions, but excellent video, thanks a lot for it !
9:47 key tip for management.
The over price in earning and the under price for buying it is not the friendly as you think in the exchange that the millionaires did know along with politicians and Business CEO and businesses owners
I would like you to do a real analysis on a company so we can learn as well step by step
The investing the companies performance no one show you how. But it is need to check in every day. Rather than hold investment and forget
Great video! For those looking to learn how to invest A Teenager’s Guide on how to Invest Like Warren Buffett and Charlie Munger is a good place to start.
Trust me do yourself a favor and take Brandons learning course. Very valuable. I loved it.
Take the projections of management with a grain of salt, especially with penny and upstart no profit companies.
The Oracle 💯
Hi, I have got a question about the 10 year time span. Why do we always you 10 Years to calculate Intrinsic value? if you hold the company for lets say 15 years, it's intrinsic value will go up. I've spent quite some thinking on this subject and don't really get where the magic number 10 is coming from.
The only thing special about 10 years it marks a decade. The more information (time/track record) the security it has the better if you're a long-term, buy-and-hold investor. Knowledge is power.
Great video. It's sort of ironic that your example for Number 3 was Elon Musk, as he's the number one reason I don't see staying invested in Tesla. He has accomplished his objectives, but there's an aura of shadiness to everything he says, and often he's just plain lying.
How do you look at Tesla inside this model of investing
Any stocks you are looking into?
Is a good idea to invest money every week 20 or 10 pounds or once a month is more good than weekly
@@capiche2759 Okay thank you
But with the circle concept... Everyone would look into social media, Netflix and phones stocks! No wonder these stocks are so heavily bought. I really think someone can learn relatively quickly about markets they don't know much about. And so create for themselves a new "competency".
I've always invested using technical analysis. I used value investing approaches after reading a few of Graham's books and dove into Alibaba and I've lost too much money on my first value investment 😂
To be fair, Graham did say don't invest in any companies that don't pay dividends so I broke that rule.
Did you cash out? You only lose money if you cash out or if the company goes belly up. I don;t personally hold any Alibaba since it is a Chinese company, but I don't think Alibaba will go belly up.
I also invested in BABA but am worried it may have be a "value trap" :P
Before Amazon there were plenty of popular retailers (e.g. ebay) that went flat/down for YEARS (until the recent covid market rally). BABA is in the right sector and in the right country and has right price/value gap, but still seems to have ebay type of potential...
I mean, theory about may happen aside, every time I try to use their products (albeit as a foreigner) I am disappointed with the product.
@@mmocny Did you ever read any Ayn Rand? I don't agree with her entire philosophy (Objectivism) but she was on point that 1. Don't invest in companies with a communist dictatorship in place. 2 Don't invest in companies that have unions. :)
@@konradvonmarburg7733 yes I've read multiple of her books. I also was born in a communist country and my whole family knows intimately will how communism really works.
So: I don't consider her opinions to be valuable here at all.
@@mmocny My father managed to escape communist Hungary in the 60s and made it to Canada. Not investing in a publicly traded company in a communist dictatorship is probably not a good idea. Investing in a company with a strong union is also probably not a good idea. She was more of a philosopher, not a financial advisor, but these points, in her books, make absolute sense.
I’m a big value investor although I don’t have a huge account. I always prepare a three statement DCF for a business I’m modeling. It worked for me and is the only logical way to make investment decisions.
It is not the only logical way to make investment decisions and it only shows that you have no knowledge about finance whatsoever
Wow
Where is information about the 8hr course for investing please?
i'm both a value and growth investor and there are Great stocks out there! the trick is to diversify enough to where you actually minimize risk I made my first million from repositioning my stocks using a full service broker so i invested and re-invested my profits.
do you by any chance do referrals on your broker ?...i could really use one
@@harrisahmed3066 sure! she goes by Rita Wildrin Mora, you can search her up to connect with her
Yeah, I’m really gonna give my money to someone who makes 13 google accounts and spams various videos to make it look like they are all different people propping up some fake thieving investor. NOT
Warren buffet doesn’t diversify to minimize risk.
👍🏼
1:08 I would switch 1 and 2
Long term to help millionaires do better all time
The investment as you run the retail you must have profits to spend in daily the crook keep our monies and promises in return with recession frequently
I love your videos but using Elon musk as an example of a CEO who delivers on things he says is strange. I think he's the king of over promise under deliver. A lot of people have mentioned how hes way too overly optimistic. He made the cars but all of the other false promises he has sort of sit strangely in this conversation
I agree. Tesla has yet to make an affordable car.
This shows simply the whole problem in valuation… how does he determine coke is worth 15 times earnings? He’s says that like one should know or assume that.
I'm intrigued by the visionary nature of this content. A book with akin themes I read brought clarity to my life. "Dominating Your Clock: Strategies for Professional and Personal Success" by Anthony Rivers
In order to earn big
Hi
Very good for dumbies like me !
Thank you ❤ for your videos
It is not the friendly stuff that the few investors from 100% investors get involve only 2% per wealthy the 98% lost principle from investment that you believe legal matter protect you
I don’t know my dog invests in me very well too ,it is the biggest dog investor I don’t know
Indians as usual All time Smart. 😎❤. Proud to be Indian.
11:30 Don't tell anyone.
Why should you or I spend time researching value investing companies, when we can just do an internet search on recent Warren Buffett purchases?
All hail the UA-cam algorithm
My p0rtfolio is plummeting significantly, I’ve lost about $320k within a few months and I'm not confident about picking st0cks anymore. Are there really no other options for me to gain from the stock market?
How do I Find this Lady?
Thanks, I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get.
Honest feedback PLEASE READ:
You are making the same video rendering mistake as tons of other youtubers and it needs fixing: Never ever render a video with black bars encoded in the video itself. Your video has black bars at the top and bottom which actually makes it look normal when you view it on YOUR screen. HOWEVER for any viewer who's screen is wider than yours this will result in black bars on all four sides which is jarring and looks unprofessional. Way too many make this mistake when rendering video and fail to notice it because they only view the video on their own monitor.
The fix is simple: if you want a wider aspect ratio don't add black bars but actually cut that part off and render in a wider aspect ratio with no black bars anywhere. This will then work properly on any screen.
Ok this is interesting.
I’m assuming that this is targeted for hedge funds and other large billionaires since this isn’t the cigar butt approach