The Last Straw

Sentiment Vs Earnings

Over the long run, the main driver of share price is earnings per share (EPS). If, for example, EPS has grown at 10% annually over a decade, you can be reasonably confident that the share price will show a similar appreciation. Consider REA Group (ASX:REA), whose per share earnings compounded at an average annual rate of 27% between 2004 and 2023 (yes, it’s […]

Simplicity Through Complexity

“Life is really simple, but we insist on making it complicated” Confucius  The same could be said of investing, where the complexity bias — a logical fallacy which equates complexity with accuracy — results in a proliferation of highly detailed models and valuations.  But, to paraphrase Joel Greenblatt; if you can easily and simply explain why something’s a great business, and how […]

Reporting Season: What To Look For

Things have been fairly quiet on the corporate news front recently, but that’s about to change in a major way as companies begin to release their quarterly and half-yearly numbers.  It’s always a challenging time for investors, who not only need to digest and synthesise a fire hose of information, but also contend with heightened volatility. Anand Sridharan, an investor at Nalanda […]

Reflecting on 2023

Happy New Year Investor! We hope you managed some well-deserved time off in recent weeks, both from your usual vocation as well as with your investing. Not that we’re advocating for complacency, but it’s often useful to take a step back every now and then. Partly because it’s important to have some time for a broader reflection on your investment goals, […]

It’s Not Always Management’s Fault

When a share price underperforms the market, how much of that can be blamed on management? Conversely, when prices surge higher, how much credit do the senior execs deserve? Of course, in the short run, the answer is probably ‘not much’. But even over a period of a year or two it can be hard to connect executive decisions to […]

The End Of An Era: A Farewell to Charlie Munger

This week we lost one of the greats. Only one month shy of his 100th birthday, legendary investor and polymath Charles Thomas Munger departed this mortal coil. He had a rich and varied life with pursuits spanning law, mathematics, architecture — and much more besides. He witnessed first hand incredible societal and technological change and, of course, amassed a giant […]

AI and Exponential Progress

If you could fold a piece of paper just 42 times, it’d be thick enough to touch the moon. Fold it 52 times further and it’d reach across the entire observable universe.  Exponentials break your brain, and thinking in those terms doesn’t come naturally. Still, most investors tend to get it, at least as it applies to compound returns. But there are […]

The Language Of Business

Accounting may not be the most enthralling of topics, but some basic literacy here is vital if you fancy yourself a stock picker. As Buffett put it: “You have to understand accounting and you have to understand the nuances of accounting. It’s the language of business and it’s an imperfect language, but unless you are willing to put in the […]

The Best Investment Approach

There is no one ‘right’ way to invest. Even if there were, somehow, a way to prove the superiority of a particular approach, it’s not worth much if you lack the wherewithal to execute it. And it’s not necessarily a question of ability; temperament, time, experience, resources, personal interest, and many other things besides, are also important. The best investing […]