stock market

Buffett-style investing as a three-legged stool

This is a good quote about Warren Buffett-style investing:

They like to liken their process to a three-legged stool in terms of the kinds of companies they look for:

  • The first leg of that stool is the business model that produces high free cash flow
  • The second leg is shareholder-oriented management
  • And the third leg is the ability to invest that high free cash flow in areas that will produce attractive rates of return

The quote comes from this Morningstar page. That description is consistent with what you’ll find in books like The Warren Buffett Way and The New Buffettology.

The great personal fortunes in this country ...

“The great personal fortunes in this country weren’t built on a portfolio of fifty companies. They were built by someone who identified one wonderful business.”

~ Warren Buffett

How to invest in artificial intelligence and robotics

If you’re interested in investing and would like to somehow invest in “artificial intelligence” and robotics but don’t know how to get started, take a look at the ROBO and BOTZ ETFs (exchange-traded funds). You can either invest in those ETFs, or do your research on them to see what underlying securities they invest in.

A good article on Verizon stock

Here’s a good article on Verizon’s stock. A few keys: quarterly adjusted earnings were the same as the previous year (no growth); full year adjusted earnings declined; VZ is “poised to benefit greatly under the plan,” with a positive impact to cash flow of $3.5-4B; VZ is overspending their operations (expenses > revenue); tax reform is expected to yield a 55 to 65 cent increase in EPS. (January 30, 2018)

Bull markets don’t die of old age

“The old adage is, ‘Bull markets don’t die of old age, they’re killed by higher interest rates.’”

~ Mike Baele, managing director at U.S. Bank Wealth Management

The meaning of “intrinsic value” in investing

Here are a few definitions of the term “intrinsic value” in investing.

investopedia describes it as:

The intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Additionally, intrinsic value is primarily used in options pricing to indicate the amount an option is in the money.

Good investing quotes from Warren Buffett and Charlie Munger

“A business that can grow its intrinsic value at 12 to 15% over an extended period of time will create tremendous wealth for its shareholders over time.”

“Long-term competitive advantage in a stable industry is what we seek in a business. If that comes with rapid organic growth, great. But even without organic growth, such a business is rewarding.”

That’s just two of the many good quotes about investing on this valuewalk.com web page. (Features quotes from Warren Buffett and Charlie Munger.)