InvestED: The Rule #1 Investing Podcast

When a company makes the decision to go public, shares of that company become available for purchase, allowing anyone to buy a stake in the company. Each share is a stock, and investors are able to buy and sell shares in any public company at any time. Of course, as with any form of business, the goal is to buy a company’s stock when it’s “on sale” or undervalued relative to its actual value, and...

Today's podcast episode discusses how innovation in companies do not always lead to the best investments, and we decided to feature none other than the prestigious Annalisa Gigante. Annalisa Gigante has been an award winning innovator for 30 years, with a track record of commercial success, launching and building multi-billion dollar new businesses across different industries from life sciences an...

Investing in the stock market does not involve luck or gambling. It requires a strategy and a solid foundation of knowledge. Investing in anything, especially the stock market, when you don’t have a concrete strategy can be scary. It’s a serious journey that shapes your life and can determine whether or not you live a life free from financial burden.  For example, if you don’t have a solid amount...

What's going to happen to the market in the following months? No one knows for sure. All you can do for now is stick to your process, and stay in the right mindset for rational investing.  When you get overwhelmed by stress, lack of sleep, or other factors, your rational mind loses power and your emotions take over. This is a terrible mindset for making investment decisions. You can't avoid those...

Investing has changed drastically over the years. Many of the tools that were hardly accessible or cost money to use are now available at the click of a button. For instance, one of the best tools that investors can access online is the Securities and Exchange Commission, or SEC. The SEC is an independent federal regulatory agency tasked with protecting investors and capital, overseeing the stock...

Have you ever cloned another investor? As the name implies, cloning refers to the strategy of following or copying the ideas of famous investors or fund managers. Most investors believe this is an ethical strategy, and Rule #1 investors actually take advantage of the fact that we can clone or follow expert investors.  This idea of cloning goes all the way back to when Warren Buffett first started...

This has been an emotionally exhausting year for everyone, and you’ve probably been affected in one way or another. Gratitude can be a powerful tool for resilience in the face of adversity, so this week we’re practicing being thankful before the upcoming Thanksgiving holiday. We are incredibly grateful for all of our listeners and hope you enjoy thinking about investing from a different perspectiv...

Phil predicts a devaluation of the buying power of the US dollar. Therefore, there may be problems on the horizon for investors. Inflation is a natural result of currency fluctuations, because it will cost more to purchase goods and services. In some markets, inflation destroyed the stock market for 20 years! For instance, when there was a high rate of inflation in the United States from 1965-1983...

What's going to happen in the next few months following the election? Nobody knows for sure, but there will likely be some turbulence ahead.  If you’ve been following along with my channels for some time, you know the best method to make long term gains in the market. You have to do the research and buy companies that fit the Rule #1 criteria and are “on sale.”  So how come everyone doesn't just d...

Danielle is back for this week’s episode of InvestED. After almost seven weeks into recovery since first experiencing symptoms from COVID-19, she starts to reintroduce routine activity into her daily life and discusses both the physical and economic consequences of COVID-19 with Phil. Numbers have spiked in Europe in the past week and a half and there are theories as to why. Why have rates in some...

A stock split is when a company decides to exchange more shares at a lower price for stockholders' existing shares. They happen from time to time, so it's important for us as investors to understand what that means. Stock splits make stocks more accessible to individual shareholders, make selling put options cheaper, and typically tends to increase share prices in the short run. So does a stock sp...

If you think that because real estate lets you leverage your investment, the rate of return is much higher than a business/stock investment, and is, therefore a better place for beginner investors to put their money, think again. This is a commonly held idea that is completely mistaken.  Phil and other expert investors including Warren Buffett have owned real estate, everything from subdivisions t...

Allan Mecham is a well-known investor who runs a hedge fund called Arlington Value Capital. Allan has had a phenomenal track record, and implements the values and philosophies of Rule #1 investing. In 2012, Allan sent out a letter to his investors that covered some of his core investing philosophies. One of those philosophies included that in order to be successful in the stock market, you must lo...

Warren Buffett says that the ideal investment is one that you can hold onto forever, growing your money for as long as you own it. However, Buffett and every other successful investor also knows that there are times when selling a stock is the best route. For example, Phil Town was a big fan of IBM and bought into the company in his earlier investing years. He researched IBM thoroughly, and felt t...

Investing is one of the most morally charged and important things we can do. If we’re privileged enough to be among the few who have more money than is necessary to survive, we must be careful about how we allocate that excess capital. Ultimately, it could determine how the world works for our family for generations to come. So as you’re building your watchlist, keep in mind that you are buying bu...

One of the core Rule #1 investing principles is to buy wonderful companies at attractive prices. This helps take the risk out of investing and makes it easier to get fantastic returns. However, there are other factors that you must consider before you commit to any companies on your watchlist. A great company encompasses four simple elements, and we call these elements the “Four Ms of Investing.”...

Invest in what you understand. Sounds simple, right? Shouldn’t everyone be investing in what they understand? Warren Buffett once stated that defining your circle of competence is the most important aspect of investing.  Circle of competence is tricky to define, but is essentially built by the things you are passionate about, what you’re talented or good at, and things you spend money on. It could...

In Rule #1 investing, we call “buying on sale” purchasing stocks with a Margin of Safety. All you have to do to get a big MOS is know the value of the business you are buying—as a business—and then wait to buy it until the market drops much lower than the value. Today, Phil and Danielle dive deeper into Margin of Safety valuations, and explain why understanding how to value a company is critical t...

A powerful way to arrive at the margin of safety price is the “How long before I get my money back” method—aka Payback Time. If you buy the whole business and pocket all the earnings, Payback Time is the time it would take you to get your investment back. Once you get all of your money out of the business, you have no risk. Today, Phil and Danielle discuss this concept in depth, and explain why kn...

You’ve done the initial Four Ms analysis of companies on your watchlist, but your work is not complete. The next step in the researching process is critical, and tells you whether or not the business is worth purchasing. Being at this point in your analysis means that you’re highly confident that the company is going to be larger and more productive in ten years. Today, Phil and Danielle discuss t...

In the researching phase of investing, it’s important to understand who the major players are and who else owns shares of the companies on your watchlist. However, insider disclosure rules are changing and will change the way this information is presented to the public. In today’s episode of InvestED, Phil and Danielle discuss factors that indicate large investors stepping in to purchase stocks, a...

Management is one of the key factors to consider when looking for companies to purchase, and that involves analyzing the CEO’s compensation. You must understand how management gets compensated, and know that they are getting paid for building a better company—not for having a better stock price. This week on InvestED, Phil and Danielle discuss why it’s important for CEOs to get compensated for hav...

Bill Ackman’s checklist is straightforward and reflects the basic principles of Rule #1 investing. But sometimes a company’s story has changed, so you must research further to determine if you need to hedge, or even exit a position. This week on InvestED, Phil and Danielle discuss Ackman’s checklist more in-depth, and explain why keeping things simple is ultimately the best route to go in an inves...

Bill Ackman is a successful investor who we can learn from. Although his checklist slightly differs from the traditional value investing checklist, it still aligns with the principles of Rule #1 investing. He believes that an excellent company is simple and predictable, has a dominant market position, and a limited exposure to intrinsic risk. This week on InvestED, Phil discusses Ackman’s list in-...

Analyzing management of a company can be mostly subjective, so you must strongly consider the objective numbers—numbers that clue us in to the ability of management to allocate capital properly. This week on InvestED, Phil and Danielle discuss key elements of a quality business, including low debt, high return on invested capital, high free cash flow, and how you can use them to predict a company’...