Hello reader! Welcome to Ignore the Street.
In 2016 I read a book that changed my thinking about markets and investing forever. Granted, I didn’t know much about the topics at the time, but I knew I had found the “Bible” on the topic. The book was “The Intelligent Investor” By Benjamin Graham. Originally published in 1949, Graham was known as the “Dean of Wall Street” and “Father of Value Investing”. The man lost a fortune in the crash of ’29 and it changed his investing behavior completely. What Graham came to realize, is that if stocks represents ownership of a business, the key to successful investing is to buy businesses for less than what they are worth: “Buying a dollar for 50 cents”.
How we define value investing today may differ from person to person, but the core principles still guide the enlightened investor’s thinking. As famed modern value investor Joel Greenblatt says: “If you do good valuation, the market will agree with you. You just don’t know when.”
I’ve been a fanatic on the subject since 2016, and want to help you, the reader, become a more rational investor. The name “Ignore The Street” is a reference to the market in general; The investing herd putting emotion over reason, while ignoring the price they pay at their own peril. In order to get different results from the market, you have to do things differently than the market.
The purpose of this blog is to demystify investing and markets into terms and concepts that are easy to understand. My goal is to help you become a more intelligent investor. Below I’ve listed essential reading to set you on the path of intelligent investing.
Getting Started
- Investment Defined – There may be differing definitions on what is an investment, but here’s the definition that will put you in the right mindset.
- What Is Value Investing? – Is it buying cheap stocks? Or is there more to it?
- Simple, But Not Easy – Investing intelligently is simple, but not easy. Here’s why.
- Circle of Competence – It doesn’t matter how large your circle is. But knowing its edges is crucial.
- Mr. Market – Know his mood. He can become quite irrational at times. This is what creates the opportunities.
- Margin of Safety – Never invest without a margin of safety. The larger, the better.
- The Punch Card – Stick to this mental model, and you will make better investing decisions.
- Time Arbitrage – In a world of short attention spans, this is perhaps the best weapon in your investing arsenal.
- Owner Mindset – 100 shares or 100000. The mindset needs to be the same.
- Volatility is Opportunity – Fluctuations does not equate to risk. Volatility is your friend that creates the greatest opportunities.
- Absolute Returns – What is the correct way to measure your performance? Focus on the downside before even thinking of potential gain.
The Nitty Gritty
- Financial Statements – The language of business. Don’t be afraid of numbers, it’s easier than you think.
- The Income Statement – The first of the three. Also known as profit & loss account.
- The Balance Sheet 1/2 – The second financial statement. Part 1 of 2.
- The Balance Sheet Continued 2/2 – Here’s what to look for in a healthy balance sheet.
- The Cash Flow Statement – In many cases overlooked, but essential to know.
- How To Value a Business – Here’s the simple way to value a business. Different methods exist, but this is the quintessential method.
Getting the odds in our favor is what intelligent is all about. In markets, if there’s nothing smart to do, it’s best to do nothing.
-IGTSKasimir
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