“Charlie and I view the marketable common stocks that Berkshire owns as interests in businesses, not as ticker symbols to be bought or sold based on their ‘chart’ patterns, the ‘target’ prices of analysts, or the opinions of media pundits. Instead, we simply believe that if the businesses of the investees are successful (as we believe most will be) our investments will be successful as well.”
– Warren Buffet
In last month’s article, we made a major market call, which already appears to be coming true! This month, we point out some wisdom from the greatest investor of our time, Warren Buffet…Great Investors Listen to the Greatest Investors.
“News is a money making industry. One that doesn’t always make the goal to report the facts accurately… Fear-based news stories prey on the anxieties we all have and then hold us hostage… In previous decades, the journalistic mission was to report the news as it actually happened, with fairness, balance, and integrity. However, capitalistic motives associated with journalism have forced much of today’s television news to look to the spectacular, the stirring, and the controversial as news stories. It’s no longer a race to break the story first or get the facts right. Instead, it’s to acquire good ratings in order to get advertisers, so that profits soar.”
– Deborah Serani Psy.D. Psychology Today
“Don’t just DO SOMETHING; STAND THERE!”
– Clint Eastwood
In last month’s article, we focused on “Avoiding Surprise” as one of the qualities of a great investor. This month, we urge you to read carefully because our firm is making a major “market call” and a significant prediction for the future that you won’t want to miss!
“Life is really simple, but we insist on making it complicated.”
A Great Read
Our team here at Concentus recently discovered a great article from Farnam Street that we all really loved, and we hope you will enjoy: “Complexity Bias: Why We Prefer Complicated to Simple.”
The article is somewhat lengthy, but it’s worth a read. In essence, it explores the human cognitive bias known as “complexity bias,” a hardwired human tendency to “give undue credence to complex concepts.” The article discusses two primary implications of complexity bias that I found quite interesting and that are particularly useful to understand in relation to investing and wealth planning.
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”
– Peter Lynch, legendary investor
The “Inevitable” Correction
Last week I had a meeting with a new prospective client that got me thinking. This gentleman recently sold his company, and had the good fortune of receiving a multi-million dollar payday, so we were meeting to discuss his financial and investment planning. We discussed the merits of investing his capital in the equity market, and he agreed heartily that ownership of a portfolio of great companies would be the best way for him to sustain his income, and maintain his wealth, over the next 30 years of his retirement. However, he had only one condition for the implementation of his investment plan: He wanted to hold off on investing his cash into the equity market until stock prices pull back, because, after all, “a major crash is inevitable.”
“The time to do lifeboat drills is not after the ship has struck an iceberg.”
– Nick Murray
In last month’s article, we focused on “Working from a Plan” as one of the great qualities to adopt for anyone who wants to become a great investor. This month we focus on a similar, but slightly different quality…Great Investors don’t get Surprised.
“Failing to Plan is Planning to Fail.”
In last month’s article, we focused on “Keeping Things Simple” as one of the great qualities to adopt for anyone who wants to become a great investor. This month we focus on a similar, but slightly different quality…Great Investors Work from a Plan.
“A week has only 168 hours, regardless of your age, intelligence, accomplishments or how much money you make. Your quality of life is a direct function of how you choose to spend that time.”
– Bill Bachrach
Our time is such a valuable commodity, and it seems that during the holidays our time is stretched out of our control.
“Investments are like a bar of soap. The more you handle them, the smaller they get.”
– Warren Buffett
In last month’s article, we focused on “Understanding Value” as one of the great qualities to adopt for anyone who wants to become a great investor. This month we focus on a similar, but slightly different quality…Great Investors Keep it Simple.
A League in Crisis
Unless you are living under a rock, you must know that our beloved National Football League is going through some rocky times lately. First, Ravens running back Ray Rice was caught on video brutally beating his wife, exposing a pervasive culture of domestic violence among players. Next, Tom Brady’s “Deflate Gate” scandal dominated the headlines for over a year. And now, NFL owners and players are in a major dust-up over the players’ right to demonstrate in favor of social justice while the National Anthem is playing at NFL games, prompting even Donald Trump to join the debate.