According to Phil and other value investors, investing should always essentially involve the same principles ? even for non-stock investments like bonds. Putting your money where your values are, buying investments at a discount, and being able to move through different types of assets fluidly.    For example, bonds and securities are other types of low-risk investments that investors purchase. However, their potential for returns is much lower as well. A bond might only make you a 3% return on your money over multiple years. This means that when you take your money out of the bond, you?ll have less buying power than when you put it in, because the rate of growth didn?t keep up with the price of inflation.    Bonds can be purchased from the US government, state and city governments, or from individual companies. Mortgage-backed securities are a type of bond typically issued by an agency of the U.S. government, but can also be issued by private firms.    When you purchase a bond, you are essentially loaning money to either a company or the government. For U.S. investors, this is typically the U.S. government, though you can buy foreign bonds as well. The government or company selling you the bond will then pay you interest on the ?loan? over the duration of the bond?s life cycle.   Corporate bonds are slightly riskier than government bonds because there?s more risk of a corporation defaulting on the loan. Unlike when you invest in a corporation by purchasing its stock, purchasing a corporate bond doesn?t give you any ownership of that company.   In today?s podcast, Phil and Danielle discuss bonds, and why the best investments to make for yourself depend on your risk tolerance, level of understanding of certain markets, timeline, and reason for investing.    Learn more about your different investment options with this Complete Guide to Investing for Beginners in 2021: https://bit.ly/3dYlBVI Learn more about your ad choices. Visit megaphone.fm/adchoices

Warren Buffett is currently sitting on about $150 billion in cash. Could this mean that doomsday ? or a major market correction ? is coming? Most of the time, successful investing is a waiting game. Just as there are poor times to sell your stocks, there are poor times to buy them as well. And sitting on cash while you wait for a better opportunity is often one of the best investing decisions that you can make. As Rule #1 investors, we try to invest in companies that have at least a 50% margin of safety, meaning that there is at least a 50% upside between the company?s stock price and its true value. When valuations are as high as they currently are, though, it becomes difficult to find any quality companies that exhibit this margin of safety. Looking at the Shiller PE ratio, prices have only been this high twice in the past 140 years. The first time they got this high was in 1929. The second time was in 1999. But we might not be here for much longer.  Following the smart money ? defined as money from big-time investors who know the market better than anyone ? is rarely a bad idea, and right now, these investing gurus aren?t putting a lot of money into the market. Instead, the majority of the money flowing into the market right now is coming from retail investors. While these retail investors are buying stocks faster than ever before, the big investing gurus are sitting on their cash. This alone is a pretty good indication that right now might not be the best time to buy into the market. As Rule #1 investors, we like to find companies that are solid enough to survive and thrive no matter what the market does. When a major market correction, as the one that is very likely on the horizon drives the price of these companies down, the opportunity for great returns is higher than ever. Will the stock market crash? What are you going to do if it does? Today, Phil and Danielle discuss what investors should look out for in the stock market, and how to prepare for a potential doomsday. This Stock Market Crash Survival Guide will help you prepare for the next market crash and help you cash in when the market drops: https://bit.ly/3dDUfnF Learn more about your ad choices. Visit megaphone.fm/adchoices

In thinking about the process of finding wonderful companies at attractive prices, it helps to think of what I call the Four Ms: meaning, management, margin of safety, and moat.  This podcast is focusing on moat.   Most people know a moat to be the water around a castle but in investing terms, a moat is the durable competitive advantage that a company has that protects it from being attacked by competitors.   A moat is what makes a company predictable and allows us to put a value on the business. Charlie Munger said that ?Coca-Cola is the perfect business because it has this gigantic durable competitive advantage, or moat, which gives it predictable cash flow.?    This allows us to figure out what the future cash flow will be and value the company today, so we know whether we can buy it on sale or not.   Finding a business with a wide moat is key to finding a successful business to own, because a business with a wide moat is much more predictable for the next 20 years than a business with no moat.   The idea of the moat is really simple. If an industry looks as if it might be very easy to get into, there probably isn?t a moat. On the other hand, if an industry looks as though it might be really hard to get into and be successful, you?ll probably find some wide-moat businesses.   In today?s podcast, Phil and Danielle discuss moat and value, and the processes in which they pick stocks with confidence.    Learn more about moat and the other three Ms of investing with this free guide that I?ve created for you: https://bit.ly/31xiBto Learn more about your ad choices. Visit megaphone.fm/adchoices

Stock splits happen from time to time, so it's important for us as investors to understand what they mean and how they might impact our investing decisions. A stock split is when a company decides to exchange more shares of its stock at a lower price for stockholders' existing shares. So, what happens to a stock?s price when it splits?   Nothing actually, although, it?s going to look like something big happened. Stock splits don?t change the market cap, which is the market price of the stock on a given day multiplied by all of the shares, or the sticker price of a stock one single cent. Not a penny. All a stock split does is change the number of shares and the price per share. I repeat: this does not change the total value of all those shares by even one cent. A lower stock price makes it easier to trade because the stock becomes more attainable for interested investors who may have been priced out of buying it in the past. Lower prices make it easier to find buyers than higher prices. When a stock price goes over $100 a share, people start to think of it as ?expensive? even though the price of the stock has nothing to do whatsoever with the actual market cap of the business. A business worth $1 million is worth $1 million whether there is one share worth $1 million or 1000 shares worth $1000 each or 1 million shares worth $1 each. But how many buyers are out there for a single share of stock worth $1 million? Not very many. Let?s say there was one buyer. The owner of that single share might have to take a much lower offer simply because there is only one buyer. But if there were a million shares at $1, there can be lots of buyers. Lower stock prices make trading easier, which makes investors trade more often. Trading more often makes for higher stock prices. The bottom line is that stock splits have no effect on the true value of a company. As Rule #1 Investors, we care about the value of a company, not its stock price. We don?t base our investments in a company on the price per share but instead look at the entire company as a real owner does. Learn how to find high-performance stocks with my Four Ms for Successful Investing guide. Click here to download: http://bit.ly/3f4Q32o Learn more about your ad choices. Visit megaphone.fm/adchoices

It?s never a great idea to sit on too much cash. Why? One word: inflation.   Inflation is the devaluing of a currency?s buying power. It occurs over time as the government pumps money into the economy and there?s a larger money supply buying a relatively fixed amount of items.   As the money supply grows, people feel like they have more money, so they?re willing to pay more for things. When there?s a lot of inflation, wages tend to increase and people then feel like they?ve got even more money, so they?re willing to pay a little bit more for a Coca-Cola.   Inflation is something that many people completely forget to factor in when calculating how much money they?re going to need for retirement.   Most people tend to assume that if you want to live on, say, $50,000 a year for the rest of your life you need to multiply that number by 30 years and that?s how much you need.    What they don?t take into account is inflation. This means that to retire, you may need much more than you think. The small percentage may not seem like a lot, but over time, it adds up.   This is why investing is one of the most important things you can do to set yourself up for a financially secure future. Not just investing in anything, but investing in companies that align with your values. By making the decision to invest based on our personal values, we can change the world radically.   In today?s episode of the InvestED podcast, Phil and Danielle discuss why cash is trash, and why it?s important to set yourself up for a financially secure future by investing with your values. Learn how to invest with your values with my Four Ms for Successful Investing Guide. Click here to download: http://bit.ly/3eFrdWP Learn more about your ad choices. Visit megaphone.fm/adchoices

After you have found a worthy company you would like to invest in and it?s on sale, the final step is to actually purchase the stock through a brokerage account so you can start reaping the rewards. This is an important step in the investing process, but it can seem confusing because there are several brokerage options out there. Buying shares in any company will require you to go through a broker. Brokers enable you to easily buy and sell shares in any public company, but they do charge a fee for their services. Once you are working with a broker, though, buying shares of a company is as simple as ordering something out of a catalog or making a purchase on Amazon. Simply choose the stock you want to buy, the number of shares you want to buy, and complete your purchase. A great option that has come available in recent years is the use of online brokers. Online brokers are a little more ?self-serve? than traditional brokers, however, their fees are also much lower. For beginner investors with small amounts of money, online brokers are the best choice because the high brokerage fees of traditional brokers have the potential to eat up any profits. A few options include Charles Schwab, TD Ameritrade, Vanguard, Fidelity, and Robinhood. In today?s episode of the InvestED podcast, Phil and Danielle discuss stock brokerages, and explain why it?s so important to do your research before you commit to any broker. Learn more about getting started and making your first investment with my Complete Guide to Investing for Beginners in 2021. Click here to download: http://bit.ly/3qo3JI1 Learn more about your ad choices. Visit megaphone.fm/adchoices

Warren Buffett?s highly anticipated shareholder letter was released this past weekend.   In this annual letter, Berkshire Hathaway's quarterly reports have offered investors a glimpse into the company's inner workings.   Buffett also highlighted the fact that among the biggest winners in Berkshire?s investment portfolio was its 5.4% stake in Apple. Buffett noted that the iPhone maker was now one of his company?s three biggest assets, with its stake worth $120 billion as of December 31, 2020.   Berkshire ended last year with $138 billion in cash. This is likely due to the market still being extremely overvalued.    Being one of the best value investors in the world ? if not the best in the world ? Buffett understands the importance of only purchasing wonderful companies at discount prices.    In the annual letter to shareholders, Buffett reminded investors that miracles do occur in middle America despite much of the attention on the east and west coast.    ?Success stories abound throughout America,? the investor said. ?Since our country?s birth, individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their dreams by creating something new or by improving the customer?s experience with something old.?   In today?s podcast, Phil and Danielle discuss a few key takeaways from Warren Buffett?s annual letter to shareholders, and why Warren Buffett and Charlie Munger are two of the most important value investors in history.   Learn about purchasing wonderful companies at discount prices with this FREE guide I've created for you: http://bit.ly/3bPTyqb Learn more about your ad choices. Visit megaphone.fm/adchoices

?There?s nothing evil, per se, about selling things short. Short sellers?the situations in which there have been huge short interests very often?very often have been later revealed to be frauds or semi-frauds.? ? Warren Buffett Short selling, or shorting, plays an important role in public markets as it improves prices, rational capital allocation, prevents bubbles, and shines a light on fraud.   If investors think a stock's price is dropping, they can short the stock. They borrow shares and sell them with hopes of buying them back at lower prices. However, stocks can theoretically keep rising, which could cause losses. So the investors that short the stock will either have to put more money up to secure their position or close their positions.   Essentially, short selling exposes which companies' stock prices are too high. In their search for overvalued firms, short-sellers can discover inconsistencies or other questionable practices before the entire market does. Short sellers can almost be regarded as the ?watchdogs? of the market.   A recent example of this is the Gamestop event which caused many investors to either gain or lose money, as shorting isn?t ideal for all investors. This is why it?s important to invest with your values?so you can invest with confidence and reduce your risk of making bad investing decisions.    When looking for companies to purchase, always consider the Four Ms: meaning, moat, management, and margin of safety. This is the first step you need to take when building your watchlist of companies you are interested in.   In today?s podcast, Phil and Danielle discuss the important role short sellers play in our market and why it?s important to invest with your values.   Learn about the Four Ms and how they can help you invest in the right businesses at the right time with this FREE guide I've created for you: http://bit.ly/3btAqhM Learn more about your ad choices. Visit megaphone.fm/adchoices

Every type of investment has its upside and downside, and some are riskier than others. Cryptocurrencies, for example, are the newest type of investment. They are unregulated digital currencies bought and sold on cryptocurrency websites.  Cryptocurrencies such as Bitcoin have gained a lot of interest in recent years as an investment vehicle?some people even think it may replace gold in the future. However, cryptocurrencies remain an incredibly risky investment due to the fact that there are many unknown factors. For example, there is the possibility of government regulation and the possibility that the cryptocurrency will never see widespread acceptance as a form of payment. At this point, no one knows for sure what the future holds for cryptocurrencies, so investing in cryptocurrencies is little more than speculation. Rule #1 investors don?t invest in things they don?t know. That?s not investing, that?s gambling. On the other hand, cash and commodities are typically considered low-risk investments. So if you?re new to investing or risk-averse, one of these options could be a good place to start. However, these low-risk investments also tend to have low returns.  Gold is an example of a commodity, so its price is based on scarcity and fear which can be impacted by political actions or environmental changes. If you are investing in gold, be aware that your protection against a price drop, your moat, is based on external factors so the price can fluctuate a lot, and quickly.  The price tends to go up when scarcity and fear are abundant and down when gold is widely available and fear is abated. If you think the world is going to be a more fearful place in the future, then gold could be a good investment for you.  Everyone?s reasons for investing and personal risk tolerance are different, so you have to decide which investment types suit your lifestyle, timeline, goals, and risk tolerance best. What a good investment is for one person isn?t necessarily a good investment for you. Listen to this podcast today for more information on your different investment options and the risk related to each. Learn more about your investable asset options with my Beginners Guide to Investing in 2021. Click here to download: http://bit.ly/37ldvE2 Learn more about your ad choices. Visit megaphone.fm/adchoices

Square is a financial service, merchant services aggregator, and mobile payment company based in San Francisco, California. Danielle has openly expressed her excitement for this company?but what makes it so special? In 2009, Square initially started as a solution to mobile businesses without mobile payments. It took Founders Jim McKelvey and Jack Dorsey about 3 years to understand the market at the time, and how they could make an impact in this space.  They entered the market and were able to provide a small device that could be easily inserted into the audio jack of smartphones. With this convenient hardware and only a 2.75% transaction fee, they quickly divorced the merchant from the shackles of digital wires.  The successes of these innovations were multi-faceted. The infrastructure for payment processing was no longer costly for a specialized machine, but a small add-on to devices we already own. This also meant that as long as someone had the Square app, they could be a transaction node as well. Square continues to show viral growth, with revenue up year over year. This week on InvestED, Phil and Danielle welcome podcast guest Jim McKelvey, the co-founder of Square. Jim talks about his book, ?The Innovation Stack,? and how innovation ultimately is what impacts a company?s success. What does it take for a start-up to turn into a successful business? Listen to the podcast today to find out.  Interested in getting your own copy of "The Innovation Stack?" Order it at https://www.jimmckelvey.com. Learn how to find high-performing, innovative companies with my Four Ms checklist! Click here to download: http://bit.ly/2LzEBQ2 Learn more about your ad choices. Visit megaphone.fm/adchoices

This is an exciting time to be an investor in the stock market. As you know by now, Reddit investors just launched an "attack on Wall Street" by purchasing shares in GameStop. This pushed the stock price up over 480% in a week.  The investor who helped direct the world?s attention to GameStop is 34-year-old Keith Gill. Gill used Reddit?s WallStreetBets message board to promote GameStop, and used the identity of Roaring Kitty on his YouTube channel and Twitter page to help engineer a short squeeze against the hedge funds that were betting the price of GameStop would drop. But what is a short squeeze? If investors think a stock's price is dropping, they can short the stock. They borrow shares and sell them with hopes of buying them back at lower prices. However, stocks can theoretically keep rising, which could cause losses. So the investors that short the stock will either have to put more money up to secure their position or close their positions. If they choose to close their position, they are buying the stock to exit their position. This can drive the price higher and force other short sellers to do the same.  This creates a continuous cycle of buying and pushing the price up even higher. This is the short squeeze, as those short the market essentially get "squeezed out.? And it's exactly what happened with GameStop. Hedge funds and other short-sellers have lost an astounding amount betting against GameStop, and there has been a regulatory response to this event. Robinhood limited the number of shares each user can purchase, stating that the trading restrictions were risk management decisions to protect Robinhood and its clearinghouses.   In today?s podcast, Phil and Danielle discuss the GameStop situation and explain why the market should be free?where regulators stay out of the ?little? guy?s way. Learn more about the basics of investing in the stock market with my Beginners Guide to Investing in 2021. Click here to download: http://bit.ly/39EOFR0  Learn more about your ad choices. Visit megaphone.fm/adchoices

Are you one of the winners of the InvestED 300th podcast episode giveaway? Listen to this podcast to find out!  Investing in stocks is one of the best things you can do to set yourself up financially, but you have to first understand the company valuation process in order to actually make money. When a company decides to go public, an investment bank helps determine what the price of the company?s stock should be at their Initial Public Offering (IPO), when they become available to purchase on the stock exchange. They determine the initial price based on the value of the company and early interest from investors before the stock is available to the public.  After the company goes public, the stock price is based on supply and demand. When the demand for a stock goes up, its price goes up. The demand can increase if the company is doing extremely well and its value is increasing, or it can increase simply because of excitement from other investors.  It?s important to remember to not get the ?value of the company? confused with the ?price of the stock.? The market can be incredibly emotional and price a great company way under their true value and vice versa. Ultimately, the stock price is determined by greed when the stock price is going up and fear when the stock price is going down. This is why it?s important to invest with certainty within your circle of competence. Love what you own, and put your money where your values are. Most of us have the intention to make the world a better place, but seem to forget that the businesses that they invest in have a direct impact on what is going to exist in the world in 10-20 years. In today?s podcast, Phil and Danielle announce the winners of the InvestED 300th podcast episode giveaway and discuss rational investing in 2021. Learn more about using your Circle of Competence to pick stocks with my 3 Circles Exercise Guide. Click here to get started: http://bit.ly/3pn4Bgj Learn more about your ad choices. Visit megaphone.fm/adchoices

This week, we are celebrating the 300th episode of InvestED by doing a prize giveaway! Here?s how to enter: Go to investedpodcast.com Click the button ?Click here for details!? Follow the steps for a chance to win: A FREE ticket to a 3-day Virtual Investing Workshop (a $300 value!) A signed copy of Invested* A $100 Amazon e-gift card Your question featured on the 301st episode of InvestED Danielle?s Bundle: A yearly subscription to the Invested Practice Newsletter and access to the Mostly Invested Online Course In this episode, Phil and Danielle bring great insights to their analyses of Li Lu?s speech from 2015, ?The Prospect of Value Investing in China?.  Li Lu opens this speech by describing the ethics he believes all investors should follow: Make it your ethical obligation to seek truth and wisdom Be a really good fiduciary for your investors as if it?s your own money or your parent?s money He further implies that as a value investor in China, you will reap the benefits of finding wonderful companies because even then you can take comfort in the huge margin of safety or choose to exit. What was their biggest takeaway from his speech? Listen to the podcast today to find out. Learn more about your ad choices. Visit megaphone.fm/adchoices

One of the best things about investing is that it is possible for everyone to succeed?no matter your age, income, gender or IQ.  As a beginner investor, it?s easier to avoid mistakes and decrease risk by investing in companies you are already familiar with, and that have meaning to you.  For example, if you work in the tech industry, it?s going to be much easier for you to understand the goals of a tech company as well as their potential to reach those goals than it is going to be for you to evaluate a company in the pharmaceutical industry. Consider your personal passions, talents, and spending habits. Better yet, map them out using a venn diagram, placing passions in one circle, talents in another, and spending habits in another. Where these three areas overlap is your ?Circle of Competence?, reflecting the industries and sectors you have the most knowledge of and where you should start your search for companies to invest in. Over time, you can begin to research companies across various sectors and expand your knowledge-base and comfort zone, but investing within your Circle of Competence is the best place to start. As you embark on your investing journey, remember to stay rational, mindful, and disciplined. It is the only way you will be successful in value investing.  In today?s podcast, Phil and Danielle discuss value investing in 2021, and best practices for investors of all levels to be successful in the stock market. Ensure you always make smart investment decisions with my 3 Circles Exercise Guide. Click here to get started: http://bit.ly/3ozYpkJ Learn more about your ad choices. Visit megaphone.fm/adchoices

It?s so important not to invest or sell stocks too soon. While the desire to get in on the ground floor of a brand new company or industry is certainly understandable, it is most often better to let the dust settle a little so that more information is available and you can do proper research before making an investment. Although, even with proper research and due diligence, even the most successful investors? journeys are still fraught with errors and investing mistakes. Nevertheless, as painful as these investing mistakes are at the time, you can learn a lot from them and can use them to become a better investor. After all, no one wants to lose money on their hard-earned investments down the road.  The best way to avoid losing money on investments is to follow a proven investing strategy and never stray from it. Making irrational decisions based on emotions can be costly.  By avoiding greed or fear-based decisions, you can pursue a successful investing career and hopefully avoid the business and investment problems that investors like Warren Buffett and Benjamin Graham have experienced in their early years. In today?s podcast, Jeremy Deal?founder of JDP Capital?sits down with Danielle to discuss his biggest investing mistakes so that you can learn from them! Ensure you always make smart investment decisions with the Rule #1 Cheat Sheet for Smarter Investing. Click here to download: http://bit.ly/3pHRNRg Learn more about your ad choices. Visit megaphone.fm/adchoices

When a company makes the decision to go public, shares of that company become available for purchase, allowing anyone to buy a stake in the company. Each share is a stock, and investors are able to buy and sell shares in any public company at any time. Of course, as with any form of business, the goal is to buy a company?s stock when it?s ?on sale? or undervalued relative to its actual value, and to sell that stock when it?s fully valued in order to make a profit. A simplified look at a successful investment is one where an investor buys a company for a certain amount of dollars, holds on to the company for an extended period of time until its value has grown to the point that they feel comfortable selling it, and then sells it above what they purchased it for.  Buying great companies when they are on sale is what Rule #1 investing is all about, but it?s fine to wait to buy until you are sure you are getting both a wonderful business and a great price. Think of it this way: you would never buy 100% of a company without thorough due diligence, and, likewise, you shouldn?t buy a small percentage of a company without the same. When the experts?such as Warren Buffett or Charlie Munger?are publicly stating that they are sitting in cash, this is an indicator that they are waiting for a dip in the market, or an event to trigger their next large purchase.  On this vault episode of InvestED, Phil and Danielle answer a listener?s question regarding sitting on cash and managing your investments. Learn how to invest and make decisions with confidence with the Rule #1 Cheat Sheet for Smarter Investing. Click here to download: http://bit.ly/2KthciL Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's podcast episode discusses how innovation in companies do not always lead to the best investments, and we decided to feature none other than the prestigious Annalisa Gigante. Annalisa Gigante has been an award winning innovator for 30 years, with a track record of commercial success, launching and building multi-billion dollar new businesses across different industries from life sciences and chemicals to services and digital technologies. She served as CTO of LafargeHolcim, and was an Executive Committee member at Adecco Group as Chief Business Development and Marketing Officer, both as global leaders in their respective industries. Her career includes international roles in innovation, business management, strategy, and marketing. Her key focus areas are sustainability, digital technologies including AI and IoT, new business models, and building high performing teams. She has been the subject of two Masters? theses on women top executives, and a recent monograph on Innomniacs. Innovation in companies can come in many different forms, including organizational, technological, or process innovation. But do innovative companies always make great investments? Before you buy shares in a company, it is essential to thoroughly analyze that company?s mission, management, goals, outlook, fundamentals, and so on. Great investors would never buy 100% of a company without thorough research for due diligence, and, likewise, you shouldn?t buy a small percentage of a company without the same. If you want to learn more about analyzing companies on your watchlist, download Phil?s Four Ms for Successful Investing Checklist: http://bit.ly/3mwFx4k Learn more about your ad choices. Visit megaphone.fm/adchoices

Investing in the stock market does not involve luck or gambling. It requires a strategy and a solid foundation of knowledge. Investing in anything, especially the stock market, when you don?t have a concrete strategy can be scary. It?s a serious journey that shapes your life and can determine whether or not you live a life free from financial burden.  For example, if you don?t have a solid amount of money to retire on in 20 or 30 years from now, the government may not have the funds available to support your lifestyle, which is scary. That is why it is becoming increasingly important to learn how to invest for yourself. In reality, the only fear of investing you should have is the fear of what you will miss out on if you don?t invest. You wouldn?t jump in the ring without knowing the basics of boxing, so you shouldn?t jump into the stock market without knowing the basics of investing. Before you begin building wealth, it?s important to understand your long-term goals of investing as well as the basic process that you will use to reach those goals. But once you learn the basics, you must constantly stay up-to-date with trends and market updates. The most successful investors in the world are reading and educating themselves on a daily basis.  In today?s podcast, Jake Taylor?Chief Executive Officer of Farnam Street Investments?sits down with Danielle to discuss luck vs. skill in investing, and why it?s important to stay in a growth mindset.  Learn how to invest and make decisions with confidence with the Rule #1 Cheat Sheet for Smarter Investing. Click here to download: https://bit.ly/3gNe0ub Learn more about your ad choices. Visit megaphone.fm/adchoices

What's going to happen to the market in the following months? No one knows for sure. All you can do for now is stick to your process, and stay in the right mindset for rational investing.  When you get overwhelmed by stress, lack of sleep, or other factors, your rational mind loses power and your emotions take over. This is a terrible mindset for making investment decisions. You can't avoid those stressful situations as an investor, but the way you handle them can drastically change your outcome. When you notice you are feeling tense or nervous about an important investing decision, take a few slow, deep breaths to calm your nerves. Consider stepping back, and resuming when you have a clear head. In the long term, improving your problem-solving skills and looking at things from a larger perspective will help you deal with stress without feeling overwhelmed. Having a set of processes and boundaries when looking for companies to invest in is critical. Benjamin Graham, who was Warren Buffett's mentor, said that the first thing all investors should think about when they buy a stock is that they have bought part of a business. This is an excellent mindset to have as an investor for several reasons. When you own a business, you care about how well the business is performing its core functions. When you focus on that, instead of on how the stock price changes from one day to the next, you adopt a long-term perspective that is crucial for investing success. Thinking like an owner also helps you avoid panic selling. You maintain a rational perspective and avoid being driven by emotions. In today?s podcast, Jake Taylor?Chief Executive Officer of Farnam Street Investments?sits down with Danielle to discuss his investing process and how he keeps a rational mindset before making any important decisions. Reduce stress by only investing in high-performance stocks using my Four Ms for Successful Investing Guide. Click here to download: https://bit.ly/3lRnvt6 Learn more about your ad choices. Visit megaphone.fm/adchoices

Investing has changed drastically over the years. Many of the tools that were hardly accessible or cost money to use are now available at the click of a button. For instance, one of the best tools that investors can access online is the Securities and Exchange Commission, or SEC. The SEC is an independent federal regulatory agency tasked with protecting investors and capital, overseeing the stock market and proposing and enforcing federal securities laws. By using the SEC, you can view information about brokerage firms, investment advisor representatives, and their professional background and conduct. This could include current registrations, employment history, and disclosures about certain disciplinary events involving the individuals. However, these tools that are accessible online can only effectively be used if you have a solid understanding of basic investing principles. One in which includes only purchasing businesses that have excellent management. When you are looking to trust your money inside the walls of a business, you need to have confidence in the people leading the company. Management capable of taking the company to new heights. People who live and breathe the business. Responsible individuals who make decisions that lead the company in the right direction. Tony Hsieh, former CEO of Zappos, a great example of an effective and honest leader, who cultivated a strong sense of culture in his company. He once stated, ?In addition to trying to WOW our customers, we also try to WOW our employees and the vendors and business partners that we work with. We believe that it creates a virtuous cycle, and in our own way, we're making the world a better place and improving people's lives. It's all part of our long term vision to deliver happiness to the world." This week, Danielle discusses why company analysis is so important in the investing process, and why a strong leader such as Tony Hsieh is one of the key factors to a high-performance business. Learn more about finding quality stocks to invest in with the Rule #1 Four Ms for Successful Investing Guide. Click here to download: https://bit.ly/2JzMXpC Learn more about your ad choices. Visit megaphone.fm/adchoices

Have you ever cloned another investor? As the name implies, cloning refers to the strategy of following or copying the ideas of famous investors or fund managers. Most investors believe this is an ethical strategy, and Rule #1 investors actually take advantage of the fact that we can clone or follow expert investors.  This idea of cloning goes all the way back to when Warren Buffett first started watching Ben Graham?s investing strategies, and other investing gurus openly stating that they cloned other great investors that came before them. Mohnish Pabrai, for instance, is one of the more successful investors out there. He is a shameless cloner and follower of Warren Buffett and Charlie Munger. In fact, Pabrai once famously stated that ?Thou shall be a shameless cloner.?  Although, the best investors in the world know that cloning is only an efficient strategy when you do your own research on top of that. But what tools will help you successfully clone experts? One of the most popular tools which I discuss today is Dataroma, to track stock picks and portfolios of legendary value investors such as Warren Buffett. The data is consolidated, categorized and presented in an easily accessible format. What you should look out for while analyzing investors in these tools is how many stocks they own. If an investor owns less than 20 companies, for example, they?re almost certainly a Rule #1-style investor. Only clone investors with this characteristic?investors who stick to a few stocks and are passionate about those companies. Because this means they?re putting in 5% of their portfolio on average into one business, which is a scary thought for the vast majority of people who manage money. They don?t want to get committed to anything because they don?t have that level of certainty, and they?re not doing that kind of research.  This week, I discuss these tools and the process of cloning in-depth, and discuss why this could be an effective strategy if done correctly.  Learn more about finding quality stocks to invest in with my Four Ms for Successful Investing Guide. Click here to download: https://bit.ly/39fTzUK Learn more about your ad choices. Visit megaphone.fm/adchoices

This has been an emotionally exhausting year for everyone, and you?ve probably been affected in one way or another. Gratitude can be a powerful tool for resilience in the face of adversity, so this week we?re practicing being thankful before the upcoming Thanksgiving holiday. We are incredibly grateful for all of our listeners and hope you enjoy thinking about investing from a different perspective this week. Years ago, I spent some time in Japan with a good friend of mine named Wahei Takeda. He?s known as the Warren Buffett of Japan, who made his entire fortune from scratch in post WWII Japan.  Wahei told me that the most important thing that you can do every day, the thing that was responsible for him making billions of dollars, is ?Be thankful 1,000 times a day.? This hit home, as I felt like I?ve been doing it my whole life, but I?ve never heard anyone put it into a formula for making money and using it as a guide to investing. Wahei calls it, ?Maro Up.? ?Maro? means being thankful. When Wahei buys a company, he goes to the CEO and tells them that he wants them to learn the technique of being thankful. This idea of being thankful must be really basic and fundamental to some kind of law of nature. So this week, I challenge you to be aware and thankful as much as you can. Put yourself in that psychological position of gratitude. Be thankful for your investing knowledge, and all it has given you in your life. Be thankful for your computer that allowed you to learn, and your ability to read so you could consume life-changing information. There?s something about it that?s so powerful! It turned Wahei, who was poor, struggling in a country that had been devastated, into a billionaire. If it worked for him, we should try it too. Get inspired to invest like the world's greatest investors with this free guide. Click here to download: https://bit.ly/3f82b0x Learn more about your ad choices. Visit megaphone.fm/adchoices

Phil predicts a devaluation of the buying power of the US dollar. Therefore, there may be problems on the horizon for investors. Inflation is a natural result of currency fluctuations, because it will cost more to purchase goods and services. In some markets, inflation destroyed the stock market for 20 years! For instance, when there was a high rate of inflation in the United States from 1965-1983, the rate of return was nearly 0%. If Phil?s predictions are true, there will be a major problem for investors with diversified portfolios, because your buying power will be dwindled down nearly in half. Diversification is the idea of creating a portfolio that includes multiple investments in order to reduce risk. Someone who is an entrepreneur might think it is best to lower his or her risk and have 100 businesses, rather than focus on one or two. Most people over-diversify. They split their money into hundreds of stocks in hopes of making a great return. This is not the best strategy, because your rate of return is going to be widely dependent on whatever fluctuations the market is experiencing. If you know how to invest, you don?t have to diversify.  But on the other hand, investors who own fewer companies will be in better shape. Warren Buffett is a perfect example of this! He made billions of dollars in the 1970s?in fact, it was his best era for investing. The reason for this is because as the market started to realize that there were serious structural problems with currency, it became extremely volatile. The market went from 1000 on the Dow Jones peak in 1965, down 30-50% about 10-15 times in the next 15 years. Rule #1 investors thrive in this kind of market environment. This is why it?s so important to understand when and why businesses go on sale, per the Rule #1 investing principles. Focus your portfolio on businesses you understand, that you know you are buying cheap, and let the diversification happen naturally. It?s worse to be in things you don?t understand than to be un-diversified in industries you do understand. If you?re doing your work well, you shouldn?t have an industry-wide permanent bad surprise. The number of stocks I own, and thus my diversification, such as it is, will ebb and flow as I find great businesses to buy. Phil also believes that as a result of this election, there will be dramatic changes in fiscal policies and in tariffs with China. All of these side effects will create a lot of short-term volatility. Even just a few days after the election, the market immediately jumped up, and has just recently leveled out. It?s hard to tell what will come next. On today?s podcast, Phil predicts what may happen next in the market and why all you can do as a rational Rule #1 investor is rely on the knowledge you?re equipped with.  Prepare yourself for whatever may happen in the stock market. Download my Stock Market Crash Survival Guide today: https://bit.ly/3eNtFZ6 Learn more about your ad choices. Visit megaphone.fm/adchoices

What's going to happen in the next few months following the election? Nobody knows for sure, but there will likely be some turbulence ahead.  If you?ve been following along with my channels for some time, you know the best method to make long term gains in the market. You have to do the research and buy companies that fit the Rule #1 criteria and are ?on sale.?  So how come everyone doesn't just do it? It could be because they?re busy adjusting to the pandemic, stressed out, or dealing with other external factors.  Now more than ever, you need to take care of your mind and body so you can avoid making costly investing decisions and, more importantly, stay healthy.  When you get overwhelmed by stress or fear, your rational mind loses power, and your emotions take over. Being able to control your emotions is an essential part of being a successful investor. And being able to control your emotions depends on how well you take care of yourself day-to-day. If you let anxiety, stress, or fear drive your decisions, you will end up making completely irrational choices that could hurt you in the long run.  Instead, you want to train yourself to observe those negative feelings and learn how to deal with them. Constantly falling victim to them will only send you into a downward emotional spiral that might lead you to make bad investment decisions. Always fall back on the investing knowledge you have and let your rational mind take over.  Rational investors have the ability to recognize when they?re feeling a bit unbalanced - and then walking away. They come back to it when they have a clear head so they don?t make a rash decision based on emotions.  Whether it?s practicing staying mindful, reading, working out, or meditating, try to incorporate some form of practice into your life that will enable you to keep a clear head during stressful times. It will be a big help in developing your ability to control your emotions.  Prepare yourself for whatever may happen in the stock market! Download my Stock Market Crash Survival Guide today: https://bit.ly/2TPpbYt Learn more about your ad choices. Visit megaphone.fm/adchoices

Danielle is back for this week?s episode of InvestED. After almost seven weeks into recovery since first experiencing symptoms from COVID-19, she starts to reintroduce routine activity into her daily life and discusses both the physical and economic consequences of COVID-19 with Phil. Numbers have spiked in Europe in the past week and a half and there are theories as to why. Why have rates in some countries spiked, while others have been able to keep their number of cases down - and what does this have to do with investing? Phil and Danielle agree that the virus is very political in the United States, especially with the presidential election on the horizon. There is no doubt that if the pandemic continues the way it has, we will see some very serious currency related issues and possibly dramatic inflation. Businesses such as theatres, sporting events, and restaurants are already on life-support, and the long term effects of people continuing to stay home from work and businesses will lead to many businesses going under. Phil and Danielle agree that another stimulus package will be pushed through very soon, but the question remains as to what will happen with the currency; how much can you print and put into the economy, and how will this affect the US dollar (USD) itself? On top of this, the USD is the world?s reserve currency. If the USD goes down in value, it will injure any other country who has the dollar sitting in its vaults. So what should we as investors invest in, and how should we diversify our investments to protect ourselves from economic crash or inflation? If you want to prepare for the next market crash, download Phil?s Stock Market Crash Survival Guide today: https://bit.ly/3m3J7mt Learn more about your ad choices. Visit megaphone.fm/adchoices

A stock split is when a company decides to exchange more shares at a lower price for stockholders' existing shares. They happen from time to time, so it's important for us as investors to understand what that means. Stock splits make stocks more accessible to individual shareholders, make selling put options cheaper, and typically tends to increase share prices in the short run. So does a stock split impact your investment if you already own the stock? It shouldn?t, because your investment should be the value of the entire business no matter how many pieces it is split into.    There's another kind of stock split which is called a reverse stock split, where you end up with less shares than you previously started with. For instance, let's say you had 100 shares and they reverse split it 10 to 1, you suddenly have 10 shares. Does it increase the value or decrease the value? Not at all.    Rule #1 investors look at the company not per share. They look at it as a whole company the way an owner does. This is why the company evaluation process is a critical step in investing?if not the most important.    The company evaluation process includes confirming that the business has a margin of safety. Margin of Safety is the discount rate you can buy a wonderful business, which is generally 50% off the Sticker Price. Because the Margin of Safety is just 50% of the Sticker Price, it allows you the ability to purchase into the business with lower risk. Setting this limitation on the price of a business before you buy it helps protect you by providing an extra 50% cushion off the value of the company. Since you must do a lot of research before buying a business, it should always be something you?re confident in purchasing. However, anything can happen in the stock market, and it makes sense to allot yourself an extra measure of protection. Buying at 50% off does just that. Another way to evaluate a company is by evaluating the business?s moat. Moat is the durable competitive advantage that a company has that protects it from being attacked by competitors. Moat is what makes a company predictable and allows us to put a value on the business. Charlie Munger said that ?Coca-Cola is the perfect business because it has this gigantic durable competitive advantage, or moat, which gives it predictable cash flow.? This allows us to figure out what the future cash flow will be and value the company today, so we know whether we can buy it on sale or not. Today, Phil answers fan questions regarding stock splits, company valuation, and explains why it?s important to do your research and due diligence before committing to any companies on your watchlist.  If you want to learn more about how to find excellent companies at attractive prices, download Phil?s Four Ms for Successful Investing Checklist: https://bit.ly/3jV5QAn Learn more about your ad choices. Visit megaphone.fm/adchoices

If you think that because real estate lets you leverage your investment, the rate of return is much higher than a business/stock investment, and is, therefore a better place for beginner investors to put their money, think again. This is a commonly held idea that is completely mistaken.  Phil and other expert investors including Warren Buffett have owned real estate, everything from subdivisions to large farms, apartments, commercial property, and single-family homes. If you were to do a real estate versus business/stock ownership returns comparison, we could pit the hottest real estate markets against the hottest Rule #1 investors. But it seems better to use the average real estate market and the average Rule #1 investor. As Rule #1 investors, we incur almost no management responsibility?a significant advantage. We have to spend about 15 minutes a week reading and researching, and that?s it. We?re required to know the basics of Rule #1 investing, but it?s easier to learn than real estate investing once you know the advantages.  Let?s say a Rule #1 investor had $50,000 to invest. They could buy a wonderful business at an attractive price, and when it gets unattractive, sell and buy another. We do that for 30 years, averaging 15%. After 30 years, the investment would be worth $3.3 million. Now compare that to a real estate investment. Say the average person buys a $250,000 house for $50,000 down with a 6%, 30-year fixed mortgage. Their payments are $1,200 a month, but they rent it for $1,200 and cover the mortgage payments. They?re in the hole for insurance, maintenance, advertising, and taxes. Their only choice would be to re-leverage their investment and buy more real estate?which is a whole lot different than being retired, isn?t it? Now that you're starting to think about what assets you want to invest in, make sure you understand the distinguishing characteristics to look for when buying a piece of a company. Does the business have honest management, a large moat, margin of safety, and meaning to you? Research those companies more deeply to determine which abide by Rule #1 principles. If their numbers look good, these are companies you want to add to your watchlist. Today, Danielle and Phil discuss whether or not it?s possible to make real estate a beneficial component of a high-performing financial portfolio. Learn more about buying stocks within your circle of competence with this 3 Circles Exercise Guide! Click here to download: https://bit.ly/2F9rn9C Learn more about your ad choices. Visit megaphone.fm/adchoices

Allan Mecham is a well-known investor who runs a hedge fund called Arlington Value Capital. Allan has had a phenomenal track record, and implements the values and philosophies of Rule #1 investing. In 2012, Allan sent out a letter to his investors that covered some of his core investing philosophies. One of those philosophies included that in order to be successful in the stock market, you must look for the rare combination of business safety, an attractive price, and a clear understanding of the business that leads to a low-risk and market-meeting return. His principles also focus on the idea that you?re not trying to make money in investing, but the objective is to not lose money. This doesn?t mean the stock price never goes down from where you bought it, but rather, the value of the business never decreases from where you bought it. Determining whether or not a business?s value will decrease comes down to finding a safe company at a great price, and making sure you understand it fully. This is one of the core Rule #1 investing principles.  In Allan?s letter, he also stated that he has one goal in mind when structuring his policies. That is, to make rational decisions in investing which will lead to wonderful returns. This includes staying within your circle of competence and thinking objectively. The most important thing I can tell you about becoming a great investor is to focus on your circle of competence. Try to buy businesses that really mean something to you. What are you passionate about? What do you actually know something about? Those are the questions that will make you connect to your investments, and the more you connect with your investments, the more you will own it as if you own the whole business. The more you understand the meaning of the business, the better investor you are going to be. What Allan means by staying objective in investing is not being influenced by your emotions, and sticking to the data and facts in your researching process. Only buy into a company with the mindset that you are owning the business as if it were your own?and that you plan to own that company for the long-term. This is also aligned with Rule #1 investing philosophies. In today?s podcast, Phil dives deeper into Allan Mecham?s investing philosophies, and discusses what investors can learn from them.  Learn more about buying stocks within your circle of competence with my 3 Circles Exercise Guide! Click here to download: https://bit.ly/3ieOJbp Learn more about your ad choices. Visit megaphone.fm/adchoices

Warren Buffett says that the ideal investment is one that you can hold onto forever, growing your money for as long as you own it. However, Buffett and every other successful investor also knows that there are times when selling a stock is the best route. For example, Phil Town was a big fan of IBM and bought into the company in his earlier investing years. He researched IBM thoroughly, and felt that he understood the business as if it were his own. A few years later, IBM got a new CEO named Ginni Rometty. Phil believed that she was trying to change the direction of the company, and she did not have a proven track record of success in the technology field. This was a big red flag to Phil. It was clear that IBM wasn?t making the transition to a new CEO smoothly, so Phil tried to offset IBM?s drops in the market by buying in on put options and selling on call options. This did not generate returns like he hoped it would.  Interestingly enough, while all of this was happening, IBM sustained a big Moat?which they still have today. This is a great indicator of how hard it is to break a big Moat, even when the company is seemingly doing everything wrong. But it takes much more than Moat to make a great company. Ultimately, Phil ended up exiting his position with IBM, but was still able to profit off of it. This is the importance of buying companies with a Margin of Safety.   So, the question is: when IS it the right time to sell a stock? If you?ve done your homework and you?ve bought a great company at an attractive price...why sell it? You don?t want to regret the feeling that you sold something too late or too soon. You should sell a stock when the fundamentals of the company have changed. All companies change over time?sometimes for the better and sometimes for the worse. New management sometimes takes over, new competition comes onto the market, and, sometimes, the entire story of the company itself may change. If the company you now own is no longer the same company that you first invested in and you no longer have faith in its new direction, it's a good time to sell your stock. Second, you should sell a stock when the price of the company has reached its intrinsic value. As Rule #1 investors, we try to purchase companies at a discount to their true value. Thankfully, various events in the market can often drive the price of a company down below its true value, creating a great buying opportunity. Last, it?s a good idea to exit your position in a company when you simply have a better opportunity. While it's always ideal to have cash set aside for use in case a great investment opportunity comes up, there may be times when you want to invest more than you have available in cash. In these situations, it's perfectly okay to sell a stock in order to free up capital. In today?s podcast, Phil and Danielle talk about the changes in IBM that drove Phil?s decision to exit his position, and what investors can learn from them.  Don?t buy a risky stock. Download this ultimate to-do list for investors looking to buy wonderful businesses with low risk and high returns: https://bit.ly/2RwNp8S Learn more about your ad choices. Visit megaphone.fm/adchoices

Investing is one of the most morally charged and important things we can do. If we?re privileged enough to be among the few who have more money than is necessary to survive, we must be careful about how we allocate that excess capital. Ultimately, it could determine how the world works for our family for generations to come. So as you?re building your watchlist, keep in mind that you are buying businesses, NOT stocks. For instance, although the marijuana industry is starting to grow, you would still have to ask yourself if it fits within your values if you were considering investing in a marijuana production company. Are you proud to own the business as if it were your own? These are all things you have to ask yourself while analyzing companies in any industry. You also must consider the predictability of a company in the marijuana industry, since they are typically younger and therefore carry more risk. In these cases, there is typically less public information about those companies, making it harder to perform a proper analysis in your initial researching phase of investing.  The essence of Rule #1 is ?don?t lose money,? but what that means in practical terms is to invest with certainty. Certainty comes from this: buying wonderful businesses at attractive prices. In Rule #1 investing, the word ?wonderful? actually encompasses four simple elements, which we call the Four Ms.  First, the company must have Meaning to you. This refers to understanding the industry, and if the industry has meaning to you, then you understand the environment in which the business competes. The next M is Moat, which refers to the durability of the business?or the competitive advantage a company has over other companies in the same industry. Just as Moat protects a castle from attack, a durable competitive advantage protects a company.  The third M is Management. Rule #1 investors only support businesses that have a CEO who is service-oriented, passionate about their business, honest, and experienced. While you can make money from a business with just Meaning and Moat, when you add in good Management, you?re less likely to suffer through a period when a traitor is running the show poorly and costing you money. Finally, the last of the Four Ms is Margin of Safety (MOS). MOS is essentially a large discount on the sticker price or intrinsic value?typically around 50% off. Understanding how to determine a company?s true value is so critical to stockpiling. Investors have gotten very rich buying companies, but unless they were very lucky, they only got rich because they knew the value of those businesses first. That?s why today, Phil and Danielle answer fan questions regarding business analysis, and discuss why it?s important to invest in companies that reflect your personal values.  If you want to learn more about analyzing companies on your watchlist, download Phil?s Four Ms for Successful Investing Checklist: https://bit.ly/2FJNAuw Learn more about your ad choices. Visit megaphone.fm/adchoices

One of the core Rule #1 investing principles is to buy wonderful companies at attractive prices. This helps take the risk out of investing and makes it easier to get fantastic returns. However, there are other factors that you must consider before you commit to any companies on your watchlist. A great company encompasses four simple elements, and we call these elements the ?Four Ms of Investing.? First, the company must have Meaning to you. This means you understand the business as if it were your own, you?re proud to own the business, and the business reflects your values. Meaning is often the factor that differentiates between truly investing in a company with confidence and simply gambling on whether or not they will grow in value. Next, the business must meet certain criteria in terms of financial strength and predictability. This is considered Moat. The business needs to have something that prevents their competition from coming in and stealing away the control they have over their market. By investing in a company with a Moat, you can ensure that you don?t lose your investment due to that company being watered down by competition. The third factor is Management, because every company is only as good as the people who are leading it! Far too often, companies are sunk due to dishonest or poor management. This is why it?s important to take your time to research the people who are leading a company, and make sure they have a track record of integrity, as well as success. Last, the business must have a large Margin of Safety (MOS). MOS essentially means you can buy a dollar of value for fifty cents. If you know what a business is worth, you must be able to buy it at a cheaper price. This will lead to high returns, and can eventually make you very rich. There are also red flags to consider when analyzing companies. For example, you should always be wary of CEOs that are selling off their shares of the company. This is tied to insider trading, or the trading of a public company's stock based on nonpublic information about the company.  When people hear ?insider trading,? they probably think of situations like Martha Stewart going to jail for this practice. But, what a lot of people don?t realize is that insider trading is essentially legal if the CEO in question notifies the SEC that they?re doing it within 48 hours of the sale. Do you understand the company and why their mission is important? Does it have a genuine, tangible competitive advantage? Is it run by good people? Is it on sale? By getting the answers to these critical questions, you?ll know whether or not you should invest in this company. Today, Phil and Danielle answer fan questions regarding company valuation, and explain why it?s important to do your research and due diligence before committing to any companies on your watchlist.  If you want to learn more about analyzing companies, download Phil?s Four Ms for Successful Investing Checklist: https://bit.ly/32aNNQz Learn more about your ad choices. Visit megaphone.fm/adchoices

Invest in what you understand. Sounds simple, right? Shouldn?t everyone be investing in what they understand? Warren Buffett once stated that defining your circle of competence is the most important aspect of investing.  Circle of competence is tricky to define, but is essentially built by the things you are passionate about, what you?re talented or good at, and things you spend money on. It could even be related to the industry you currently work in and are knowledgeable about. The goal is to be proud of the companies you own, and how your money is being used to support those businesses. In many ways, defining your circle of competence comes naturally. However, as you live your life, your interests will change and expand, and you can apply these new interests to your investing strategy. Take Warren Buffett for example. Much of the reason why he invested in Coca Cola is simply because he appreciates the company and enjoys the product. It aligns with his values, thus making it a great fit within his circle of competence.  Let me give you another example. I?m a fan of motorcycles, so researching and investing in Harley Davidson was a natural choice for me. Since Harley Davidson is a company that is within my circle of competence, I enjoyed learning about them, I understand their business more easily, and am happy to have owned the company. Investing in your circle of confidence will help you reduce risk and makes your initial stages of research much more enjoyable. Although, it?s an often overlooked factor since many investors feel that they can make money with any company?regardless of whether they understand it or whether it aligns with their values.  Today, Phil and Danielle dive deeper into the concept of circle of competence, and why it is a critical part of successful investing. If you want to learn more about your own circle of competence, download my FREE 3 Circles Exercise Guide. It will help point you in the right direction so you can invest in businesses you understand!: https://bit.ly/3luGI4V Learn more about your ad choices. Visit megaphone.fm/adchoices

In Rule #1 investing, we call ?buying on sale? purchasing stocks with a Margin of Safety. All you have to do to get a big MOS is know the value of the business you are buying?as a business?and then wait to buy it until the market drops much lower than the value. Today, Phil and Danielle dive deeper into Margin of Safety valuations, and explain why understanding how to value a company is critical to stockpiling.  For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

A powerful way to arrive at the margin of safety price is the ?How long before I get my money back? method?aka Payback Time. If you buy the whole business and pocket all the earnings, Payback Time is the time it would take you to get your investment back. Once you get all of your money out of the business, you have no risk. Today, Phil and Danielle discuss this concept in depth, and explain why knowing Payback Time eliminates many fears of investing. For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

You?ve done the initial Four Ms analysis of companies on your watchlist, but your work is not complete. The next step in the researching process is critical, and tells you whether or not the business is worth purchasing. Being at this point in your analysis means that you?re highly confident that the company is going to be larger and more productive in ten years. Today, Phil and Danielle discuss this next step in the research process, and cover how to calculate margin of safety using the ten cap valuation process.  For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

In the researching phase of investing, it?s important to understand who the major players are and who else owns shares of the companies on your watchlist. However, insider disclosure rules are changing and will change the way this information is presented to the public. In today?s episode of InvestED, Phil and Danielle discuss factors that indicate large investors stepping in to purchase stocks, and the reasons why small investors have an advantage. For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Management is one of the key factors to consider when looking for companies to purchase, and that involves analyzing the CEO?s compensation. You must understand how management gets compensated, and know that they are getting paid for building a better company?not for having a better stock price. This week on InvestED, Phil and Danielle discuss why it?s important for CEOs to get compensated for having low debt, high free cash flow, high owner earnings, and expanding the moat to protect against competition.  For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Bill Ackman?s checklist is straightforward and reflects the basic principles of Rule #1 investing. But sometimes a company?s story has changed, so you must research further to determine if you need to hedge, or even exit a position. This week on InvestED, Phil and Danielle discuss Ackman?s checklist more in-depth, and explain why keeping things simple is ultimately the best route to go in an investing situation. ?For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Bill Ackman is a successful investor who we can learn from. Although his checklist slightly differs from the traditional value investing checklist, it still aligns with the principles of Rule #1 investing. He believes that an excellent company is simple and predictable, has a dominant market position, and a limited exposure to intrinsic risk. This week on InvestED, Phil discusses Ackman?s list in-depth, and explains why he has adopted this style of investing himself. For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Analyzing management of a company can be mostly subjective, so you must strongly consider the objective numbers?numbers that clue us in to the ability of management to allocate capital properly. This week on InvestED, Phil and Danielle discuss key elements of a quality business, including low debt, high return on invested capital, high free cash flow, and how you can use them to predict a company?s future. Learn more about your ad choices. Visit megaphone.fm/adchoices

For most investors, options are very risky and cause them to lose money. If you do trade options, remember to think long-term. Don?t panic when your options settle during weekends when the market is closed. This week on InvestED, Phil and Danielle discuss a tragic event that happened to an investor recently, and explain why if you don?t understand options, you should not trade them. For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Management is one of the key factors to consider when looking for companies to purchase, but you must analyze more than just the CEO. Excellent management also includes high owner earnings, a growth mindset, and a business that requires less maintenance. This week on InvestED, Phil and Danielle discuss ways Rulers can use these concepts and principles to determine great CEOs of companies so you never have to lose money on your investments. For show notes and more information, visit www.investedpodcast.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

When researching stocks to purchase, it's critical to consider the management of the companies on your watchlist. Not only are you looking for a great leader and someone who lives and breathes their company, but you?re looking for someone who is careful with allocating capital. This week on InvestED, Phil and Danielle dive deeper into ways Rulers can determine an excellent stock to purchase by examining CEOs and the way they navigate their finances.   Learn more about your ad choices. Visit megaphone.fm/adchoices

In times of uncertainty in the stock market, many people lead with their emotions and make irrational investment decisions. But this doesn?t have to be the case. Bring it back to the basics, and always consider the Four Ms before purchasing any company on your watchlist: Moat, Meaning, Management, and Margin of Safety. This week on InvestED, Phil and Danielle discuss this checklist, and dive deeper into ways that Rule #1 investors can find a level of certainty and confidence in their decisions?even in an unpredictable stock market. Learn more about your ad choices. Visit megaphone.fm/adchoices

Investing doesn?t involve gambling or speculation, but it?s how most people approach it. When you're ready to start investing, you must invest with certainty?and you can do so by considering the four Ms. This week on InvestED, Phil and Danielle continue to analyze Peloton, and whether its margin of safety aligns with the basic principles of value investing. Learn more about your ad choices. Visit megaphone.fm/adchoices

We can?t deny that Peloton is a hot new company that stands out against its competitors, but does that mean it is a good company to invest in? Remember?a great business does not always equal a great investment, and you must consider the 4 M?s when determining the value of a company. This week on InvestED, Phil and Danielle analyze Peloton from an investing standpoint, and whether or not the company aligns with the Rule #1 strategy. Learn more about your ad choices. Visit megaphone.fm/adchoices

There?s a lot of discussion these days concerning this unpredictable stock market during the COVID-19 pandemic. Should investors be buying? Should we be sitting patiently? What we do know for sure is that we must preserve our emotions, think logically, and let the bear market unfold. This week on InvestED, Phil and Danielle discuss their take on the different positions some of the best investors in the world are taking, and how we can learn from their decisions. Learn more about your ad choices. Visit megaphone.fm/adchoices

So often, we get stuck in a cycle of reaction rather than finding the source of problems that we are faced with. This week on InvestED, Danielle speaks to New York Times bestselling author Dan Heath about his new book ?Upstream: How to Solve Problems Before They Happen.? Heath discusses this concept of ?upstream problem solving?, and how it relates to investors and companies during this COVID-19 induced recession.  Learn more about your ad choices. Visit megaphone.fm/adchoices

The Berkshire Hathaway Annual Shareholders Meeting took place on Saturday, May 2, and investors around the world tuned in virtually. The way Warren Buffett was speaking in this meeting was vastly different compared to previous years. What is this implying for investors and the economy? Listen to the podcast today to find out what Warren Buffett thinks about the current stock market climate and how investors should prepare themselves for what?s to come next. Learn more about your ad choices. Visit megaphone.fm/adchoices

The impact COVID-19 has had on service companies around the world is enormous. With consumerism being approximately 70% of the US GDP, nothing is being sold at the level it was except groceries and Amazon products. If you don?t know what to do right now, you might want to seriously consider going into cash and learning to become an investor. Learn more about your ad choices. Visit megaphone.fm/adchoices