Investing Mastermind Podcast

We are thankful to our listeners in celebrating a whole year of the Investing Mastermind Podcast. We hope you've enjoyed the journey with us! We shared this Maya Angelou quote: “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” We also made reference to the following episodes: Berkshire Annual meeting experience (23) When to sell stocks (17 and 45 exit strategies) Mathew Peterson (28) Retirement / tax optimization (43)

Signe and I are working hard on preparing an amazing set of future episodes for you so we just wanted to give you this quick update. Please feel free to share your questions and feedback via our social media channels such as at https://www.instagram.com/investingmastermindpodcast. Thanks and see you next Tuesday!

Ever wondered if you are saving enough for your financial nest egg? Michelle and Signe share tips in how you can save up for retirement and optimize your tax savings. While these tips are for education purposes and are not financial advice, we believe in getting the most of retirement planning as early in life as possible. Michelle really likes Roth IRAs, HSAs, and Roth 401ks. Be sure to take advantage of any tax-advantaged investing accounts in your country!

Would you believe that investing success has more to do with one's mindset rather than IQ or mathematical aptitude? One's investing temperament is key to how investing decisions get made. In this episode, Signe and Michelle discuss limiting beliefs, gratitude, and vision board. By practicing certain techniques, we can improve our investing approach and generate better results overall.

Is the American stock market overvalued or fairly priced? Signe and Michelle discuss two indicators to give investors a high level idea of where the market stands right now. One is the Buffett Indicator which is the Wilshire 5000 (total United States stock market) over US GDP ratio. Another is the Shiller PE which is the Price to Earnings ratio based on the average inflation-adjusted earnings of the previous 10 years, AKA Cyclically Adjusted PE Ratio (CAPE). Please note at the time we recorded this podcast episode, the stock of Zoom was trading at a 3000+ PE ratio and most recently posted a PE of around 156.

Signe and Michelle discussed the rise of ghost kitchens, their benefits and drawbacks, and whether investors should consider studying this evolving restaurant innovation as a prospective investment opportunity.

Diversification may be thought of as "Di-worse-fication" according to legendary investors like Charlie Munger or Peter Lynch. We explain misconceptions with the popular financial advice to "diversify" your assets, but what does this really mean? People are not necessarily diversified enough within a country or asset types, so there are many factors to consider. The best investors like Warren Buffett prefer to have high concentration in a few assets, which could still have some amount of diversification but not an overwhelming amount. Different strategies work for different mindsets as the "know-nothing" investor may be better off with a Buffett recommendation in a low-cost S&P 500 index fund.

In the prior episode we discussed our biggest beginner investing mistakes, and now we describe how to recover from these mistakes. Just because you may have "lost" money by investing in a certain security does not mean you have to make it back the same way. It's OK to make a mistake as long as we learn from them and try our best to not make them again! The important thing is to forgive yourself and move forward!

Both Michelle and Signe have made plenty of beginner investing mistakes, so we're sharing those lessons learned along with ones we've observed others also make. While it's less emotionally and financially painful to learn vicariously from others' investing mistakes, sometimes we also need to experience our own mistakes in order to truly grow.

We're sharing our life-changing epiphanies about investing, reflecting on our financial journeys so far where we had some "ah ha" moments and extraordinary experiences. This is how we ended up where we are today as Warren Buffett-style investors. Signe and Michelle share their stories, so we hope you enjoy this episode!

Michelle and Signe discuss the types of stocks and assets we avoid investing in. Warren Buffett-style investors usually avoid Initial Public Offering (IPO) stocks because they just don't have much of a public company track record yet, in spite of Berkshire Hathaway investing in Snowflake recently. Another area we steer clear of are industries that are going through disruption, such as the payments/financial industry. And more!

Threads made its worldwide debut and is taking on Twitter. Signe and Michelle discuss how its name sounds like "threats," which we're guessing Meta Instagram did on purpose. We discuss Threads' impact on the stock market so far and factors investors should consider. Will Zuckerberg defeat Musk in this quest for "town square" app greatness?

In today's episode we discuss the very first steps we take before we invest in a company or its stock. Signe and Michelle have slightly different first steps we take. For example, Michelle will check out the stock price in a quick Google search while Signe will check financial numbers first like Return on Invested Capital (ROIC), Return on Equity (ROE), and debt. In addition, Signe has a tool where she quickly calculates these figures. Michelle also likes to use a spreadsheet to conduct a preliminary or initial company valuation before doing even deeper research. As a little bonus, we talked about gaming stocks!

Signe and Michelle discuss how to find stocks to put on our wish list, whether it is intended for buying or simply watching. There can be both a wish or a watch list depending on how much research we have conducted and whether we have made a final valuation decision on a given stock. We explain how you might come across companies of interest. During this episode we referred to a few prior episodes that you can feel free to check out:

-Checklist starting at episode 8: https://podcasts.apple.com/us/podcast/finding-companies-in-your-circle-of-competence-part-1-008/id1654230975?i=1000596249934

-13F Filings episode 27: https://podcasts.apple.com/us/podcast/how-to-find-out-what-stocks-superinvestors-are-buying/id1654230975?i=1000615842563

-Matthew Peterson episode 28: https://podcasts.apple.com/us/podcast/matthew-peterson-of-peterson-capital-management/id1654230975?i=1000616807735

Michelle and Signe discuss our favorite investing books for beginners that we highly recommend:

-Invested, Danielle Town with Phil Town

-The Dhandho Investor, Mohnish Pabrai

-The Education of a Value Investor, Guy Spier

-Payback Time, Phil Town

In the show, we refer to the "Margin of Safety" Episode #11 you can check out: ⁠https://open.spotify.com/episode/2o3NR2CP233zIk8ahHo5X6?si=4qBb8PqlTYiOkV4pdmX5Jw⁠

Matthew Peterson is a value-based, long-term compounding investor and he was so kind to share his insights in this current investing environment with Signe and Michelle. He provided helpful suggestions for beginner investors, including if you would like to outperform as an investor. While the future is unknowable, we can still employ successful investing strategies as Matthew described. Matthew Peterson's fund is called Peterson Capital Management and you can learn more and contact him by visiting: https://www.petersonfunds.com. Check out Matthew on his YouTube Channel: https://www.youtube.com/@PetersonCapitalManagement. Reach out to him via Twitter: https://twitter.com/mattpetersoncfa.

We discuss the potential impact of the debt ceiling issue that will not only affect the US economy, but also worldwide economies and financial markets. At the time we were recording, the debt ceiling had not yet been raised.

Part 3 of our 2023 Berkshire Hathaway Annual Meeting Experiences where we discuss more of our takeaways from Warren Buffett and Charlie Munger, including the power of consumer behavior in consideration of potential investments. One sad day when Buffett and Munger are no longer on this earth, we discuss why Berkshire (BRK-B) will still be a good stock, and it might even go on sale during an uncertain CEO transition period. We reflected on Berkshire Hathaway's affinity toward bank stocks and concerns with the banking system.

Our 2023 Berkshire Hathaway Annual Meeting Experiences Part 2 where we discuss more of our takeaways from Warren Buffett and Charlie Munger. There was some awesome advice for beginner investors including avoid toxic people, defer gratification, and work on estate planning/wills earlier than later. We discussed Buffett's take on the US reserve currency status and the important implications of cultural power and influence.

Michelle and Signe get together for an in-person talk about their experiences at The 2023 Berkshire Hathaway Annual Meeting for Shareholders in Omaha, Nebraska and we answer some of the questions about the meeting from our audience. It was epic seeing Warren Buffett (92 going on 93 on August 30) and Charlie Munger (99 going on 100 on January 1, 2024) for the second time for both of us!

This weekend is the Berkshire Hathaway Shareholder Festival, so Signe and Michelle are off to Omaha, Nebraska during the week of May 6, 2023! Say hi if you see us there!

Signe and Michelle recount their experiences of attending their first Berkshire Hathaway Shareholders Meeting in 2022. Seeing Warren Buffett and Charlie Munger live was one of the best experiences and it was on both of our bucket lists! We are so grateful to have met so many amazing, like-minded investors. We share several examples and tips of what people can do when they might be visiting Omaha, Nebraska.

Today Signe and I discuss investing-related news with two separate topics of Credit Suisse and an AI Tool named after Warren Buffett, legendary investor. We discuss the implications of the deal between UBS and Credit Suisse and how UBS shareholders may not have been given the opportunity to voice their thoughts on the government-brokered deal between these major Swiss banks. We also discuss the technological advancements and limitations of an AI Tool that endeavors to retrieve information that suits Warren Buffett-style investing.

In today's episode Signe and Michelle discuss our selling strategies for investments. If you follow the Warren Buffett and Charlie Munger style of investing, ideally as a long term investor you never would have to sell your investments. However, sometimes the story changes with a company, or an industry, or other changes occur that may change our original investment case. We share our experiences of when we sold stocks and how we think about our equity exit strategies, if need be.

Signe and Michelle analyzed the remainder of Warren Buffett's 2022 Letter that came out with Berkshire Hathaway's 2022 Annual Report at the end of February 2023. We resumed the discussion on share repurchases AKA share buybacks, which can be both good and bad capital allocation strategies. We explained why Buffett emphasizes operational earnings over GAAP earnings. Buffett seems to be really proud of how much Berkshire contributes in taxes to the US government. Finally, Buffett dedicated a tribute to his best friend and partner, Charlie Munger, by including some of Charlie's best quotes of wisdom. There is so much to learn from Buffett, who has successfully run Berkshire for 58 years and counting. We hope you enjoy the second part of our discussion on this subject. If you'd like to read Berkshire's annual report and Buffett's letter, visit: https://www.berkshirehathaway.com/reports.html.

Signe and Michelle analyzed Warren Buffett's 2022 Letter that came out with Berkshire Hathaway's 2022 Annual Report at the end of February 2023. We especially found noteworthy how Buffett referred to Berkshire shareholders as individuals with their savings in the form of Berkshire shares. Buffett must have had death on his mind in mentioning it across many business and personal scenarios. Buffett paid tribute to his best friend and business partner, Charlie Munger, who is still going strong at 99 years young. In running Berkshire for 58 years, Buffett has reached a milestone unmatched by most CEOs. He seemed to reiterate the moral duties and company culture that he expects Berkshire's future CEOs to uphold, especially in continuing to be the Chief Risk Officer and capital allocator as Buffett has been faithfully. When Signe quoted Buffett, "Nothing Beats Having a Great Partner," we shared our mutual gratitude to be business partners in this podcast adventure of trying to follow Buffett and Munger in their footsteps. There is much wisdom to be gained from Buffett in this year's letter, and we hope you enjoy the first part of our discussion on this subject. 

If you'd like to read Berkshire's annual report and Buffett's letter, visit: https://www.berkshirehathaway.com/reports.html.

Today Michelle and Signe from Investing Mastermind Podcast have invited a special guest onto the show. Wesley Chambers is an investor from London, England, and he's also an amazing content creator who inspires us so we wanted to learn more about him and his investing style. 

Wes shares signature content on Instagram and his blog on company valuations. From time to time, he also shares background information about the Warren Buffett style investing methodology. 

We are so grateful to have spoken with Wes and we hope you enjoy his investing insights!  If you want to know more about Wes and follow his content you can find him here:  

Blog and Newsletter: https://substack.com/profile/74821602-wesley  

Instragram: https://instagram.com/investingwithwes 

Twitter: https://twitter.com/investwithwes1

Part five of an ongoing series on Warren Buffett and Charlie Munger's 4 principles of investing. We walk through these investing principles in the form of a checklist that you can download here: https://investionista.com/checklist/

We go through these steps in a company before we invest in its stock. The 4 investing principles/steps we discuss in this series are: 1) Understanding the business (circle of competence), 2) Management (honest & competent), 3) Moat (favorable long term prospects), and 4) Margin of Safety (available at an attractive price). A bonus, or 5) Inversion to make sure you fully understand the potential drawbacks of an investment idea.  

Charlie Munger is famous for saying "invert, always invert" to destroy your best loved investment idea and understand all of the reasons why one should not invest in a particular asset. We discuss a few examples among Costco, Peloton, and more.

Part four of an ongoing series on Warren Buffett and Charlie Munger's 4 principles of investing. We walk through these investing principles in the form of a checklist that you can download here: https://investionista.com/checklist/

We go through these 4 steps in a company before we invest in its stock. The 4 investing principles/steps we discuss in this series are: 1) Understanding the business (circle of competence), 2) Management (honest & competent), 3) Moat (favorable long term prospects), and 4) Margin of Safety (available at an attractive price).

Today's topic is especially exciting on the subject of Margin of Safety, or buying something of high quality at a discount to its value. In the context of investing, you want to figure out the "intrinsic value" of a company during your research or homework phase of studying businesses. It's important to note that the stock market's price on a company is not always equal to the company's value.

Once we figure out the company's intrinsic value per share, we then would want to buy its stock at a discount (margin of safety) by calculating a final stock buy price using various valuation methods that we discussed in this episode.

Learn more about Signe's investing workshop at: https://investionista.com/workshop/

Part three of an ongoing series on Warren Buffett and Charlie Munger's 4 principles of investing. We walk through these investing principles in the form of a checklist that you can download here: https://investionista.com/checklist/

We go through these 4 steps in a company before we invest in its stock. There are 2 rules of investing according to Warren Buffett: Rule #1: don't lose money, and Rule #2: never forget Rule #1. We don't want to lose our hard-earned money so that's why it's important to do this "homework" before we buy any stocks.

The 4 investing principles/steps we discuss in this series are: 1) Understanding the business (circle of competence), 2) Management (honest & competent), 3) Moat (favorable long term prospects), and 4) Margin of Safety (available at an attractive price).

When we invest in a wonderful company, it's because it has a durable, competitive advantage that is known as its moat. Many companies might not have a moat at all, so it's key to identify the business's strengths and weaknesses. Much like the medieval castle moat, a business moat helps prevent its competitors from taking away market share.

You want to look for business advantages that sustain the business for a long period of time, such as these moats: brand, switching, network effects, secrets, toll bridge, price/cost. We discussed examples of moats.

Note: We apologize for some audio issues we had in this episode, and have made adjustments for improved future episodes. Thank you for understanding.

Part two of an ongoing series on Warren Buffett and Charlie Munger's 4 principles of investing. We walk through these investing principles in the form of a checklist that you can download here: hhttps://investionista.com/checklist/

In this style of investing, we learn a lot about companies before we invest in their stocks. The 4 investing principles/steps we discuss in this series are: 1) Understanding the business (circle of competence), 2) Management (honest & competent), 3) Moat (favorable long term prospects), and 4) Margin of Safety (available at an attractive price).

Today we're focusing on the role and expectations of a company's management, especially the Chief Executive Officer (CEO). The Board of Directors also makes up management, and their job is to choose and oversee the CEO. We discuss both quantitative and qualitative ways of evaluating the CEO's performance in running a company. Can we trust and believe the CEO? How do we know they have integrity and talent?

While the CEO is often known as the company's top salesperson, arguably the CEO's most important role is that of a capital allocator. How they decide to allocate capital in the form of human resources or money is important to analyze as to whether they are making the appropriate decisions to grow the company. The more you study a company's management, the more you can envision whether a company is aligned with your values and expectations as an investor.

This podcast episode is the first in a discussion series about Warren Buffett and Charlie Munger's 4 principles of investing. We walk through these investing principles in the form of a checklist that you can download here: https://investionista.com/checklist/

In this style of investing, we learn a lot about companies before we invest in their stocks. The 4 investing principles/steps we discuss in this series are: 1) Understanding the business (circle of competence), 2) Management (honest & competent), 3) Moat (favorable long term prospects), and 4) Margin of Safety (available at an attractive price).

Today's deep dive is focused on the circle of competence or working toward the point where we truly believe we understand the business. We provide new investors with ways they can brainstorm in getting to know a company they might wish to invest in. We also discuss how guru investors (the best investors) can give us ideas about potential investments we may wish to study.

One way that we learned how to figure out what businesses could be within our circle of competence is called the "Three Circles Exercise." Learn more about how this exercise works by watching Michelle's video: https://youtu.be/7HP5Ky__zso

Before we invest, we want to make sure the business matches our personal values and ethics. We also consider how the company impacts the world. It's also important to define the boundaries of our knowledge so that we don't invest in companies or industries that we don't fully understand.

Today we want to give you glimpse into our lives behind the scenes of this podcast and share more of who we are and why we wanted to share our knowledge and passion about investing with the world. Both Signe and Michelle come from non-financial professional backgrounds and they discuss their investing learning journeys. We had been searching for an investing strategy that made sense to us. When we read and listened to the "Invested" book and podcast by Danielle and Phil Town, we finally found the Warren Buffett investing style that resonated with us. We discussed how many financial advisors are paid fees regardless of how their clients' portfolios perform, but sometimes professional financial help can be really helpful depending on the situation. 

We explained our investing practices and how we live and breathe the investing lifestyle. We reminisced about our incredible experiences at the Berkshire Hathaway annual meeting in Omaha, Nebraska and seeing Buffett and Munger live at least once. We met amazing investors like Mohnish Pabrai and Guy Spier. It wasn't a "Wolf of Wall Street" kind of party but a "Woodstock for Capitalists," where a community of like-minded investors came together in the spirit of kindness and sharing. Michelle discussed how she uses practice shares (a concept from Danielle Town) to start having "skin in the game" when researching potential stock investments.

Signe's 12 month investing practice resource: https://www.aahus.com/2021/09/investing-practice.html

Signe's investing checklist: https://investionista.com/checklist/

In today's episode we discuss why now is the perfect time to learn about investing in companies, especially in the way that Warren Buffett invests. You might be wondering if it's a good time to invest since the stock market has been down for the last year. Even though many people could be selling stocks, there could be significant buying opportunities if you find undervalued equities. Just as one would be excited to buy one's favorite food items for 50% off at the grocery store, the same framework applies to investing. We explain how high prices for stocks are not necessarily reflecting the quality of the underlying businesses. Buffett has said "price is what you pay, value is what you get," and it's important to know that a market price is not always equal to a company's intrinsic value. We started introducing Signe's investing checklist as a helpful resource, which you can check out here: https://investionista.com/checklist/

Another resource is how we might come across potential investment ideas, and Michelle mentioned how helpful the "We Study Markets" newsletter is and it's totally free. Anyone can sign up to the Investor’s Podcast Network’s full daily commentary and expert insights in the We Study Markets newsletter: https://sparklp.co/p/9f8a748fff

Michelle Marki and Signe Lonholdt explain Warren Buffett and Charlie Munger's four principles of investing. Instead of blindly buying a stock, then waiting and hoping that the stock will go up in price, we carefully take the first step before we even buy the security. The difference is that instead of just hoping for an increase in the stock price, this first step will help you understand if the stock is trash or treasure since there are many aspects of a stock besides its price.

These investing principles are critical to understand if you would like to invest in stocks like the best investors of all time. The great news is these principles are not complicated to learn.

The first principle or the first step is what Buffett calls the "circle of competence," which is just a way of saying that you can understand the business. The second principle is "moat," which comes from the protective body of water surrounding a medieval castle. In the investing context, moat means a business's durable, competitive advantage(s). The third principle is "management," as in does the CEO have integrity and talent in running the company? The fourth principle is "margin of safety," which means to buy a wonderful company at a discount to its intrinsic value.

By buying the company at a lower price to its "real value," you would allow for some margin of error in judging what a company is really worth. While it's not easy, investing can really be this simple if you follow these steps diligently!

Since it's the holidays, Signe and Michelle at the Investing Mastermind Podcast just wanted to wish you and your families a wonderful holiday season!

We're so happy you're tuning in and listening to the show, and we're so grateful for your feedback! If you have a question that you would like us to answer, please send us an email at InvestingMastermindPodcast@gmail.com. 

Please remember to subscribe to our podcast so you get the next episode right when it's hot off the press. We'll be back with new episodes in 2023! See you in the new year!

We consider Warren Buffett and Charlie Munger to be the masterminds of  investing. We tell the backstory of how Buffett and Munger became  legendary investors at Berkshire Hathaway. 

While Buffett's investing  style was heavily influenced by his mentor, Benjamin Graham, his style  evolved after he became best friends and partners with Charlie Munger.  Many people associate Buffett with this notion of "value investing," but  it might be best to think of this style in the way Munger put it: "all  good investing is value investing." 

Buffett's investing genius lies in  his ability to adapt to changing business environments and re-allocate  capital into better investments. Much of Berkshire's success stems from  their ability to recognize undervalued, quality businesses and buy them  at a discount to their intrinsic value. 

When there is an economic  downturn that causes the stock market to decline, then wonderful  companies may be available for us to buy at fair prices. We explain how  Buffett saw volatility not as a risk, but as an opportunity to buy  wonderful businesses.