Archives of “world war ii” tag

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Sir John Templeton 16 Rules For Investment Success

  
  Education
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Interesting set of rules from legendary investor John Templeton:

1. Invest for maximum total real return
2. Invest — Don’t trade or speculate
3. Remain flexible and open minded about types of investment
4. Buy Low
5. When buying stocks, search for bargains among quality stocks.
6. Buy value, not market trends or the economic outlook
7. Diversify. In stocks and bonds, as in much else, there is safety in numbers
8. Do your homework or hire wise experts to help you
9. Aggressively monitor your investments
10. Don’t Panic
11. Learn from your mistakes
12. Begin with a Prayer
13. Outperforming the market is a difficult task
14. An investor who has all the answers doesn’t even understand all the questions
15. There’s no free lunch
16. Do not be fearful or negative too often

 Complete explanation after the jump (more…)

Inside the Brain of Peter Lynch, Investing Genius

  
  Education
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Those readers who have frequented my Investing Caffeine site are familiar with the numerous profiles on professional investors of both current and prior periods . Many of the individuals described have a tremendous track record of success, while others have a tremendous ability of making outrageous forecasts. I have covered both. Regardless, much can be learned from the successes and failures by mirroring the behavior of the greats – like modeling your golf swing after Tiger Woods (O.K., since Tiger is out of favor right now, let’s say Jordan Spieth). My investment swing borrows techniques and tips from many great investors, but Peter Lynch (ex-Fidelity fund manager), probably more than any icon, has had the most influence on my investing philosophy and career as any investor. His breadth of knowledge and versatility across styles has allowed him to compile a record that few, if any, could match – outside perhaps the great Warren Buffett.

Consider that Lynch’s Magellan fund averaged +29% per year from 1977 – 1990 (almost doubling the return of the S&P 500 index for that period). In 1977, the obscure Magellan Fund started with about $20 million, and by his retirement the fund grew to approximately $14 billion (700x’s larger). Cynics believed thatMagellan was too big to adequately perform at $1, $2, $3, $5 and then $10 billion, but Lynch ultimately silenced the critics. Despite the fund’s gargantuan size, over the final five years of Lynch’s tenure, Magellan  outperformed 99.5% of all other funds, according to Barron’s. How did Magellan investors fare in the period under Lynch’s watch? A $10,000 investment initiated when he took the helm would have grown to roughly $280,000 (+2,700%) by the day he retired. Not too shabby.

Background

Lynch graduated from Boston College in 1965 and earned a Master of Business Administration from the Wharton School of the University of Pennsylvania in 1968.  Like the previously mentioned Warren Buffett, Peter Lynch shared his knowledge with the investing masses through his writings, including his two seminal books One Up on Wall Street and Beating the Street. Subsequently, Lynch authored Learn to Earn, a book targeted at younger, novice investors. Regardless, the ideas and lessons from his writings, including contributing author to Worth magazine, are still transferable to investors across a broad spectrum of skill levels, even today.

The Lessons of Lynch

Although Lynch has left me with enough financially rich content to write a full-blown textbook, I will limit the meat of this article to lessons and quotations coming directly from the horse’s mouth. Here is a selective list of gems Lynch has shared with investors over the years:

Buy within Your Comfort Zone: Lynch simply urges investors to “Buy what you know.” In similar fashion to Warren Buffett, who stuck to investing in stocks within his “circle of competence,” Lynch focused on investments he understood or on industries he felt he had an edge over others. Perhaps if investors would have heeded this advice, the leveraged, toxic derivative debacle occurring over previous years could have been avoided.

Do Your Homework: Building the conviction to ride through equity market volatility requires rigorous homework. Lynch adds, “A company does not tell you to buy it, there is always something to worry about.  There are always respected investors that say you are wrong. You have to know the story better than they do, and have faith in what you know.” (more…)

A history of Pfizer (1849 to 2015 )

  
Analysis, Education
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Started in the 19th Century as a New York-based chemicals company, Pfizer has morphed into one of the titans of the healthcare industry. fastFT reviews the company’s history on the heels of its $150bn agreement to buy botox maker Allergan in the biggest-ever deal that will see it move its headquarters to Ireland.

1849:

Charles Pfizer and Charles Erhart, cousins, launch Charles Pfizer & Co. using $2,500 borrowed from Mr Pfizer’s father. The company’s first product was “a palatable form of santonin,” used to treat intestinal worms.

The company already grows roots in New York, utilising a warehouse in the Willamsburg portion of Brooklyn as an office, laboratory, factory and warehouse.

1880:

Pfizer begins making citric acid, and becomes the leading maker of the tart substance. Demand is boosted by new soft-drinks like Coca-Cola, Dr. Pepper and Pepsi-Cola.

1891:

Mr Erhart dies, and Mr Pfizer leverages an agreement that lets him consolidate ownership of the burgeoning company.

1900:

Pfizer incorporates in New Jersey. (more…)

Hitler's definition of democracy

  
  Education
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Hitler, February 1945

Hitler, in speeches in Nuremberg and Munich, has given us definitions of democracy, yet these definitions are nowhere near explicit or conclusive. “Democracy in our eyes is a regime that is supported by the will of the people.” (My New Order, 554) It is unclear as to whom Hitler means by “our eyes…”; one can assume he is talking of the German people. Furthermore, according to Webster, a regime is simply “a form of government or administration”. Hitler’s definition, in turn, becomes simple and obvious; the above definition taken literally does not waver from the consensus definition mentioned in the introduction; in fact it is broader, leading one to suggest that the word “regime” had negative connotations that were lost in the English translation.

Fortunately, Hitler has given us a more intricate definition of democracy, even likening it to an aqueduct or blood vessel: “Democracy is the canal through which bolshevism lets its poisons flow into the separate countries and lets work there long enough for these infections to lead to a crippling of intelligence and of the force of resistance.” (My New Order, 405)

Bernard Baruch’s 10 Trading Rules

  
  Education
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While pure trend followers and technical analysts will not agree with all of Mr. Baruch’s principles it is interesting to read through them, they are the same as some of the top traders and investors of our age. Some of these all traders can agree on.

Bernard Baruch was a millionaire in his early thirties after a few good runs in the stock market and devoted the remainder of his life serving the public and helping the U.S. win World Was I and World War II. He was a big believer in serving his country and that was the main purpose for the remainder of his life after he made his fortune.

Here is a summary of his 10 rules summarized:

1. Only speculate if you can do it full time.
2. Ignore inside information and tips.
3. Have a complete understanding of a companies fundamentals before you buy the stock.
4. Don’t try to buy bottoms or sell tops.
5. Cut your losses quickly.
6. Focus on and buy only a few stocks.
7. Review and update your investments periodically for changes.
8. Study your tax position to know when to sell at greatest advantage.
9. Never invest all your funds. Keep a reserve.
10. Stick to the field you know best in investments.

His biography is a great read for anyone interested in this great man and master trader who counseled presidents and was a close associate of Winston Churchill. It is interesting that it shows how far ahead of his time Mr. Baruch was in not only stock speculating but also discrimination and economics.  If you are reading it for only his advice on stocks just read Chapter 19: My investment philosophy. It is one of the greatest chapters you will find anywhere on advice for successful market speculation. He will explains to readers that economic conditions do not drive prices, peoples perceptions do. Cut your losses fast. Sell your worst performers and keep your best. Know what you are investing in. You can only truly learn the rules of stock trading by experiencing the losses personally.

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