Investing in Trusts: Why Andrew and I Don’t Own Them, Why You Probably Won’t Want to Too – And How to Get Started if You’re Sure This is Really an Area You Want to Explore Someone asked me a question about trusts: “I was watching one of your past podcasts and you mentioned you would not buy dividend stocks for an income portfolio you would buy trusts. How would I go about or is it possible to research and possibly purchase these? I found that

Someone asked me a question about using risk-adjusted discount rates when valuing stocks. Here’s my answer. The discount rate for a stock should be the opportunity cost of putting money in it instead of something else. For your average investor, the next best alternative to where they’d put money instead of this stock would seem to be an index. If they don’t buy this stock, they wouldn’t buy a government bond – they’d buy an index. So, the discount rate shouldn’t be a government bond.

Someone asked me a question about relative valuations: “There are a couple of instances when we can value the stock based on comparables. However, for me, I feel that there is something in the middle that I can’t figure out. There is a big assumption that the stock with the cheaper valuation will go up to get close to the market. Is there an embedded assumption such as, if the stock being compared are similar in growth/roe, or basically we just are hoping for mean

Someone asked me this question: “Warren Buffett had commented that Coca-Cola has a durable competitive advantage. It is one of his ‘inevitables’. I am curious what is your thought on the investment merit of a business that may not grow much in an absolute sense, but has a durable competitive advantage like Coca-Cola? Coca-Cola may not have be able to grow their sales at 10% a year like in the 1990s, but would it make sense to focus on sales per share going forward? Assuming

From a “100-bagger” type perspective, the criteria are pretty simple: 1) Is it a small stock (probably a micro-cap, definitely a small-cap)? – We’re talking <$300 million market cap probably, but certainly like $1 billion or so – not multi-billions 2) Does it have a market multiple or lower (so, say most P/Es today are 18 or whatever – is it 18 or less, not above) 3) Does it grow faster than most businesses, the economy, etc. 4) Is it self-funding? There are other things

Someone sent in this question: When deciding to look for a bank, where do you start? What is your initial approach when finding a bank? So, I don’t really have one specific thing I look for in a bank stock. The way it usually works is that I read about a bank somewhere. I’ve gotten a couple good bank stock ideas off the Corner of Berkshire and Fairfax “investment ideas” thread (I read every post in that thread). Now, the truth is that it’s never