Investing Questions

Question 1

Who is your favourite investor

Answer 1

definitely not original, but i think if you asked any investor who they learned the most from it would have to be buffet,

as a money manager and investor

Investor

1. long term thinker
2. opportunistic
3. value oriented

money manager
1. transparent communicator
2. clear, defined strategy
3. aligned 
little things like releasing the annual on friday evening so people can read it

Question 2

Walk me through your process for valuing an investment

Answer 2

first, try to identify red flags first, highly aggressive accounting, cyclical end markets and then move onto business model risk. Very hard to identify if a company is undervalued on one metric alone.

use bloomberg to look at ownership profile, significant events,
Skim proxy
read through 10k/annual, going over business description then finanical statements before doing Md&A and total read through.

detailed DCF, comps for operating differences, not necessarily valuation

shuttle butt if possible

lastly, sell side research

Question 3

how to think about risk

Answer 3

depends on goal

for me: goal is long term capital appreciation, because of age and stomach for vol, buy more as dips

vol doesn’t mean risk, permanent loss of capital

diversifation belief: less than 15 securities, high conviction, highly concentrated portfolio. 2 reasons. at 15 securities, start to see a decreasing marginal benefit to diversifaciotn and secondly, information overload.

lastly: dilution risk