Today, I’m going to share stories about my best and worst investment decisions. Don’t worry, this isn’t just a brag-and-cringe session about making or losing money. These stories are about the valuable lessons learned, and how these adventures in investing helped shape my current approach.
You don’t have to worry about the market and its crazy valuations. That’s your neighbor’s problem, not yours. In building your portfolio, we are aiming for resilience.
While I was watching Apple’s presentation, Meta’s Quest Pro (which I own for research purposes) suddenly started to remind me of Microsoft PCs – made by engineers for engineers, where the Vision Pro is created by humans for humans.
A few weeks ago, I was asked to speak to the CFA Association of Russia about my most recent book. Here is my reply.
Many investors, including my clients, have been worried about their Schwab account safety. Are they right to be worried?
Bailouts of the banking system create social tension. Eventually, bailouts introduce so much risk into the system that failures and bailouts become too costly for society to bear. The government creates draconian rules to prevent them, which kills innovation and new business, and the result is a stagnating economy.
The Silicon Valley Bank collapse may be an extreme event, but it gives us a preview at a 100x magnification of what other banks are facing.
Investors who own index funds have strapped themselves into a giant stock market roller coaster which, to this point, has only gone up.
The following is a loose collection of random thoughts and observations on the Russian invasion of Ukraine. Rather than a coherent article, I offer some insights that have emerged as the war has dragged on.
Recessions are like forest fires – small ones are healthy for the forest. However, the longer you suppress fire, the more dead material the forest accumulates. Eventually, when it does pay a visit, it is more devastating and its effects are more long-lasting. The recession that is coming could be a big fire.
In this letter I’d like to explore the impact interest rates will have on the economy and especially the housing market.
Individual impact aside, Biden’s student loan forgiveness will harm the U.S. currency and economy. Here’s how I see it as a value investor.
Uber has a history of not making any money.
Our goal is to narrow the gap between theory and practice and take advantage of volatility. We do this through thoughtful arrogance.
Vitaliy Katsenelson will share his outlook for the economy and his approach to active stock management.
The purpose of this article is to teach you how I think, not what I think.
When Putin started the war, he tried to shift the blame to NATO, calling it the instigator. He argued that Russia had no choice but to defensively launch the war to prevent NATO from surrounding Russia from all sides. A few days ago, Putin finally lifted his veil of pretense: this is a war of conquest.
The better ARK performed, the more money flowed into its main ETF, ARKK. It used this money to buy more sci-fi ARKK stocks, pushing up the prices of its holdings. This created a vicious cycle that has now reversed.
I have been doing this long enough to know that the economy is a complex, self-adjusting mechanism, and thus the grim picture I have painted in this and previous articles may not play out.
The war in Ukraine will pour more gasoline on the already raging inflationary fire, threatening to send the global economy into stagflation. Stagflation is a slowdown of economic activity caused by inflation.
I hope the discomfort and pain you experience reading this piece are but a small fraction of what I experienced writing it. I keep reminding myself that most of our problems today are first-world problems that are generally trivial and insignificant compared to what people in Ukraine are going through.
The world has never seen sanctions like this. But ironically, those sanctions may give Putin even more power.
Just as 9/11 dramatically changed the flow of history, resulting in two wars and hundreds of thousands of deaths and millions of lives ruined, so too will Putin’s invasion of Ukraine. We are seeing only the first effects and getting glimpses of second-order effects. The broad third-order effects will not be visible for a long time, though they’ll be obvious in hindsight.
Eight days before Russia invaded Ukraine, I wrote an article saying there would be no war. I was certain of it. I was wrong. How could I get it so wrong? The more you knew about the situation, the more likely you were to get it wrong.
I’ve been asked for my thoughts on the Russia-Ukraine conflict.
When assets get overvalued and get into crazy territory, explaining their overvaluation feels like playing this “infinity times infinity” game. But at least, if we line up different crazy valuations next to each other, it is going to be easier to distinguish levels of craziness.
There happens to be a cryptocurrency named Omicron that was up 900% on the day the South African variant was christened. That is how the drunken Mr. Market is pricing our stocks.
It’s not easy to de-numb. I, like everyone else, am addicted to my numbing device. So I removed all applications from my iPhone other than phone, texting, maps, Spotify, and a few others that are very functional, like Uber. I am learning how to be one on one with my mind.
The next time you apply for a job, how would you feel if the person doing the interview asked to see your Uber rating?
Investors are ignoring the stock market’s bubble and are infatuated with the ride. They are playing Fool’s Gambit – waiting for a greater fool to buy their overvalued stock from them. And why not, greater fools have been showing up in droves for years.
Culture matters. I share how I evolved from an analyst purely focused on numbers to an investor and CEO focused on people. I recount how running the business made me a better investor.
Here is why we may be entering a sideways market (I wrote two books on this subject), as well as how to invest in it.
Here is how I am positioning my firm’s portfolio for the risk – the possibility, not the certainty – of long-term inflation.
Don’t ask for my advice on which number to put your chips on when you play roulette in Vegas; cryptocurrencies fall into the same category.
In the long term a true inflationary risk comes from growing government borrowing and budget deficits, which will bring higher interest rates and a weaker dollar with them, which will only make inflation worse and will deflate away assets.
I had a deep, existential, meaning-of-life type of conversation with a friend of mine, another value investor. I asked him, do you want Warren Buffett’s success?
I have a problem with both growth and value demagogues.
Over the last six months, my firm has skewed its portfolio towards defense companies. We have done this intentionally. The world is less safe today than at any time since the Berlin Wall came down.
The coronavirus has compressed years of changes into months. It may be the straw that broke an aging, overconfident camel’s back.
Value stocks are going down today because they are sold to buy stocks that go up because they go up.
Tesla’s market capitalization just crossed $300 billion. It’s the largest car maker in the world. Tesla’s market cap implies that its production will go up from the 400,000 cars a year it produces today...
Buffett changed his mind and bought a 10% stake in all four of the largest U.S. airlines. For a few years it seemed that he was finally right about the airlines.
Just as any propaganda needs a certain germ of truth to grow from, so do bubbles. The FANGAM are incredible companies (germ of truth), and they function better in the virus-infested world (another germ of truth). But at the core, their existence is grounded in the world that is built of atoms, not bytes.
There is a parallel between today’s stock market and Fischer random chess.
Though I loved working from home, I now realize that it came at a cost – in March and April I destroyed most of the good habits I had worked very hard to build over the last few years.
Below is a letter we recently sent to clients about how we are responding to the recent market selloff.
This article will tackle the big news. Saudi Arabia announced that it will increase oil production from 9.7 million barrels a day to 10 million and then to 12 million if needed. This news alone sent the oil price down 20% – and the whole stock market with it.
We are given the rare opportunity to prioritize what is most important to us without guilt. The material world is on pause, at least for a few weeks.
In terms of excitement, investing usually rivals watching paint dry. That has not been the case lately.
I am going to divide this letter into three sections: health and human impact (sometimes a tragic one), economic impact and investment strategy.
