Posts In: Premium Articles-02

Geoff Gannon June 17, 2018 Premium Articles-02

There’s Always a Simpler Problem to Solve

Wednesday, June 13th – Monro by DAVE ROTTMAN   To Focused Compounding members: As a stock picker, when you’re first faced with the decision to buy or not buy a stock – it seems like a complicated question. Consider the mental math problem of 54 times 7. There are a couple ways of tackling this problem. The simplest though is to multiply 50 by 7, getting 350 and then multiply 4 by 7 getting 28. You add 350 to 28 and get 378. There are...

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Geoff Gannon June 3, 2018 Premium Articles-02

Anything Times Zero

To Focused Compounding members: Since I read “Fortune’s Formula” and “A Man for All Markets” this past week, let’s talk blackjack. In blackjack, the player has an advantage over the casino if he’s counting cards. A card counter can bet nearly the minimum when he suspects the rest of the deck has cards unfavorable to him in higher proportion than a fresh deck and he can bet nearly the maximum when he suspects the rest of the deck has favorable cards in a higher proportion...

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Geoff Gannon May 27, 2018 Premium Articles-02

Efficiency vs Reliability

Friday, May 25th – Pandora A/S (PNDORA) by LUKE ELLIOTT Friday, May 25th – GameStop (GME) by VETLE FORSLAND Sunday, May 27th – “Value Trading – Does It Ever Make Sense?” by DAVE ROTTMAN To Focused Compounding members: Two different Focused Compounding members are to blame for this week’s memo. One is Dave Rottman who wrote an article entitled “Value Trading – Does it Ever Make Sense?”. The other is someone I was talking to this week on Skype. The discussion on Skype centered on...

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Geoff Gannon May 20, 2018 Premium Articles-02

Human Nature is the Ultimate Hidden Fee

Tuesday, May 15th – Box (BOX) by Jayden Preston To Focused Compounding members: In an interview this week with Barron’s, Vanguard founder Jack Bogle cited stats that showed the average investor’s annual return from index funds was 8.4% from 2005 to 2017, from actively managed funds it was 7.2%, and from ETFs it was just 5.5%. ETFs and index funds are invested in much the same things. So, investors are charging themselves a 2.9% annual fee in the form of bad timing. The same Barron’s...

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Geoff Gannon May 13, 2018 Premium Articles-02

Goodness vs. Soundness

Tuesday, May 8th, Industrial Logistics Properties Trust (ILPT) by George Baxter To Focused Compounding members: Ben Graham wrote: “Confronted with a…challenge to distill the secret of sound investment into three words, we venture the motto, MARGIN OF SAFETY…all experienced investors recognize that the margin of safety concept is essential to the choice of sound bonds.” Note the word I bolded: “sound”. As I sat down to write this memo, I thought immediately of chess. Can a good chess move be an unsound chess move? Can...

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Geoff Gannon May 8, 2018 Premium Articles-02

An Illiquid Lunch

To Focused Compounding members: There are a couple sayings every modern investor and econ student has had drummed into him over and over again. One is: “there’s no such thing as a free lunch.” It sounds like the kind of thing an economist would come up with. Though it’s not. In the 1970s, an economics writer (Milton Friedman) took the saying from a science fiction writer (Robert Heinlein) who had – in the 1960s – simply transplanted an old 1940s saying to the moon. The...

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Geoff Gannon May 6, 2018 Premium Articles-02

The Urgent and the Important

Tuesday, May 1st – North American Energy Partners by Alex Middleton Wednesday, May 2nd – Entercom Communications by Vetle Forsland To Focused Compounding members: This is the time of year when value investors flock to Omaha and come the closest to being a religious sect. It’s a good time to think about both what value investors preach and what value investors practice. The day-to-day practical work of investing that becomes habitual to you is what matters most. This is what you should care most about...

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Geoff Gannon April 29, 2018 Premium Articles-02

The Second Side of Focus

To Focused Compounding members: Back in 1991, Warren Buffett and Bill Gates were asked the same question. What one word described how they became successful. Both men said “focus”. Most investors I talk to understand the importance of focus. But, they understand it wrong. They think that Buffett and Gates mean they applied themselves longer, harder, and in a more disciplined way to a particular task. This is the focus means more school of thought. It’s half the story. There is a second side to...

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Geoff Gannon April 22, 2018 Premium Articles-02

Patience as a Process

Friday, April 20th – Vestas Wind Systems by Kevin Wilde To Focused Compounding members: Andrew and I recorded four podcast episodes this past Friday. One of them was a Q&A podcast where the question was about patience: “Would love to hear your general thoughts about what I consider the greatest investment virtue of them all: patience. How do you think about it and how do you approach it practically? Can it be cultivated?” We didn’t give this question the time I think it deserved on...

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Geoff Gannon April 15, 2018 Premium Articles-02

Fear, Greed, and Boredom

Sunday, April 15th – Computer Services, Inc. (CSVI) by Jayden Preston Sunday, April 15th – AutoNation (AN) by Dave Rottman To Focused Compounding members: In a recent interview, I said: “Stocks bounce around due to fear, greed, and boredom. You can make a lot of money being greedy when others are fearful. But, you can make at least as much money being bored when others refuse to be bored. There are a lot of boring stocks in the OTC market. They’re not cheap because people...

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