The Last Straw

PayPal and Palantir co-founder Peter Thiel has some interesting takes, not all of which you may agree with. But he said something back in 2015 which was bang on: “I’m always sceptical of sectors and trends. People always ask me what some trends are that I see happening in the future, and I have never liked the question because I’m […]

There’s no area of the market where you’d say stock picking was ‘easy’, but some sectors tend to offer fewer challenges than others. For Luke Winchester (aka Wini), whom we spoke with last week (see below), the preferred hunting ground is in the B2B industrials space. One of the key reasons being that these types of companies tend to offer better […]

Here’s a controversial take: to score the really big wins on the share market, you should disregard much of the so-called fundamentals. Not that key financial metrics are unimportant. Things such as sales, cash flows and the structure of the balance sheet provide invaluable insights into the nature of a business — and if they reveal an entity that is viable, growing […]

An unpopular perspective is an almost unavoidable requirement if you’re hoping to find a multi-bagger. If everyone shared your insight, and saw the value you recognize, it’d already be reflected in the share price. The consensus view may be cozy, but it’ll give you little opportunity for outsized returns.  What you want is a variant perception; an important but underappreciated insight into the […]

I was fortunate enough to join Luke Winchester (aka Wini) from Merewether Capital on Ausbiz last week, and he made a rather good point. Well, he made many, but the following stood out to me. To paraphrase: “If you can’t easily figure out exactly what a business does, it’s usually best to move on.” It’s a good heuristic. Right up there […]

Tennis legend Roger Federer recently delivered the commencement address at Dartmouth university, and it’s well worth a watch. He is, as always, a class act. Roger isn’t exactly known for his investing prowess, although let it be noted he has had considerable success on that front. Over the years he earned around $130 million in prize money, but the majority […]

We all like to attribute our winners to our foresight and cunning. The losers? Well, they were the result of bad luck. The truth, of course, is that random chance — both good and bad — plays a scarily big part in shaping our investment outcomes. That’s not to say it’s all just a roll of the proverbial dice, but it pays […]

Many hard problems are best solved when they are addressed backwards. Munger called this inversion, and it’s a potent idea for both life and investing. It’s pretty obvious when you think about it: if you want to be happy avoid things that make you miserable. Similarly, if you want to improve your investment returns, don’t focus on finding the next […]

. Businesses that enjoy network effects tend to have a much greater capacity to deliver outsized returns. They aren’t especially common, but if you can find them you stand to do extremely well — even if it often feels like you are too late. At its core, a network effect describes a situation where the value of a product or service increases exponentially […]

Strawman member Edgescape kicked off a good conversion on Friday, suggesting Occam’s Razor — the idea that we should favour simplicity over unnecessary complexity — was very much relevant to the field of investing. And clearly, other members agreed. It reminded me of a book by Ben Carlson: A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment […]