The Investing for Beginners Podcast - Your Path to Financial Freedom

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern, to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:35                     All right folks, Welcome to Investing for Beginners podcast. This is episode 117 we’re going to continue down the train. You’ll get the pun here in just a minute, a train tracks of answering some listener questions. We get another great one the other day and Andrew, and I wanted to go ahead and take a stab at answering this, so I’m going to go ahead and read the question. Andrew and I will do a little back and forth, so it says, Hello Andrew. I pray that your week is going well. I recently subscribed to your real-money portfolio and learning a lot. I’ve been listening to your podcast for some time now and appreciate you and Dave’s insights. A few months ag,o I ran a screen and found GBX that had some great appeal. I haven’t purchased your VTI but have something that I’ve been using to assess intrinsic value using Morningstar and guru focus information. Question with the market cap being around 750 million and the sales being 2.8 1 billion, how does that fit into your preferred metrics for screening? I liked the other numbers a lot, and I’m just wondering could this be a value trap just because it is a smaller company. Thank you for your time. Again. Thank you for sharing what you weren’t in an understandable way, Kevin. All right, Andrew takes a stab at and talk about what we were talking about before we came on the air. Andrew:                              01:51                     Okay. Yeah. So my idea for this, obviously I’m going to answer the question eventually, and you’re going to have to remind me. But I think, so w we were looking at this. This is a stock I have; I haven’t looked at before. I don’t believe you looked at it before either. So we were in the pre-show going in and going through our approach on, you know, checking out stock like this. And I was thinking, well this is pretty useful. Why don’t we do the same thing but share it with the audience? So I have a lot of things that pop into my mind when I look at a stock like this. I’ll probably go on tangents to my tangents in this episode. So bear with me.

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern, to decode industry jargon, sirens, crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:34                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 116 tonight. Andrew and I are going to answer some listener questions. You’ve been getting some great ones lately, and you guys keep sending us great stuff, so we want to keep talking about it, see if we can help you guys. We’re in a thing or two and answer any questions that you guys might have. So I’m going to go ahead and read the first question and then we’ll go from there. Dave:                                    00:58                     So it says, Hello Andrew. I started listening to your podcast, and it is inspired me to start investing. I found a list of dividend aristocrats that ran each one through Finviz with filters. I did the research, looked into the balance sheet, and warned about what the companies I was interested in did. The one I finally decided on was WBA Walgreens Boots Alliance. I didn’t see anything to wrong, and a balance sheet is slower growing its profits at debt as well, and I saw nothing to my beginner’s eye that says it’s bad, so I bought three shares. That being said, now I think I miss something and I don’t know what the price immediately dropped in price hang it. They released an announcement saying they’re going to close down 3% of their stores. Now I know most people freak out about that, but they’re trying to do it to help more profitable because everyone says they should be doing better than they are. I guess my question is, as a new investor, I’m kind of terrified that I bought the wrong stock. Even after reading the 10 Q and 10 k I’m still not sure I miss if I miss something. Someone with more experience would have seen. I guess my question is, as a new investor, how do I figure out if I’m right or wrong? Andrew, what do you think? Andrew:                      &n...

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:37                     All right folks, we’ll welcome to Investing for Beginners, the podcast. This is episode 115 tonight we’re going to go ahead and take some more listener questions. We’ve got some fantastic questions that Andrew and I wanted to answer on the air. So we’re going to go ahead and talk about those. So without any further ado, I’m going to turn it over to my friend Andrew, and he’s going to go ahead and read the first question for us. Andrew:                              00:59                     Perfect. So I have a question here from Camberley. She says I have some questions regarding IFB episode four the eight or the fine stock indicates a failing business. , I guess let’s go through these questions one by one. Number one. If you don’t know this, a falling stock until it’s too late, whether the options is the only option just to sell right then and accept your loss. So if you don’t mind, Dave, I’m going to take this one first. Absolutely. Go for it. So that’s, it’s tough, right? Because if we could figure out how to avoid falling stocks, we would do it. We would all do it, and we would all be very, very wealthy. The, so she did mention she listened to the episodes. So I did try to explain how you need to figure out the difference between a stock that is falling because the business is bad and a stock that is falling because of temporary sentiment that is negative in the stock market. I think a, and it goes really to what we try to teach. Andrew:                              02:08                     To

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, welcome to Investing for Beginners podcast. This is episode 114 tonight, Andrew, and I are going to discuss a listener question. We got this great question from Jack, and I’m going to take a moment to read the question and then Andrew, and I will do our little back and forth and have some discussion about it. So starting we have, Hello Andrew. I’m thinking about buying a home monthly mortgage costs are currently cheaper than renting in my area, and my family would be able to pay the down payment for me in cash. Do you have any insight into the financial advantages and disadvantages of buying a home? In this case, I have read the buying a home is not a great investment unless you are renting it out due to the hidden costs of home buying. And the fact that a house is a liability until you pay it off. Do you think I should put the money I would use on buying a house to instead invest in a stock market? I’d appreciate any insight you have into this topic. So Andrew, what are your thoughts? Andrew:                              01:30                     You want to open this candle warm? Dave:                                    01:32                     So yeah, apparently, yeah, let’s crack it open. Andrew:                             

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to Investing for Beginners podcast. This is episode 130 tonight, Andrew, and I are going to talk a little bit about they called an inversion. I came across this great blog post from a gentleman named James Clear who talks a lot about habits and developing different patterns and ways that we can think better and work better with our minds and how we can set ourselves up to have better processes in our lives. And he talked about inversion. So if those of you who are not familiar with inversion, inversion means that you take something and you turn it upside down, and you look at it from a different angle or a different way. And I’ve talked a little bit about this in the past. And Charlie Mugger is a big fan of a; I’m a big fan of Charlie monger. I was going to say; he’s a big fan of mine. That’s so not true. , I’m a big fan of Charlie Munger and the way he thinks. He’s a very, very deep guy. Dave:                                    01:33                     And he talks a lot about inversion in his blog posts, in his books, in his speeches that he gives. And he’s always quoting this term, invert, always invert. And you got that from a mathematician named, Carl Jacobi and this is a German mathematician, and he was famous for figuring out very, very hard problems by inverting them. And by, what he meant by this was that he would take a math problem and look at the answer and try to work backward to try to figure out how to solve the problem as opposed to looking at the problem and then moving forward trying to figure out what the answer would be. And he felt like that that was a powerful way for him to look at the roadblocks and figure out backward how to look at things. And this is something that I do myself when I’m trying to figure out how to work with different formulas and things that are a little bit above my pay grade so to speak is I will look at the answers and

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 112 tonight. Andrew and I are going to dissect it listener question that we got from Clinton. It’s fantastic. He has a lot of great points in there, and Andrew and I wanted to just kind of walk through each section of those and take some time to answer those questions, and so I’m going to go ahead and start reading. Dave:                                    00:58                     So first, a dear Andrew, two weeks ago, I started doing some serious research on investing in the stock market. I have next to no investment slash finance background. I’m 33 years old and married, working in health care with my first child. On the way, I came across your podcast with Dave on Spotify, and ever since I’ve been listening to two episodes a day from the beginning. I have a 40 minute each way commute to work. I am very intrigued by value investing. So I decided to purchase your e-letter letter to follow along with your $150 a month portfolio. So the first question, I am going to spend $1,000 a month in my invest in, in my invest in my account for the next 20 months to have around 20 positions and my wife and I will put $200 a month into the IRA account. I purchased the stocks of number and number blanket blank does Zack is a premium picks from the leather. Dave:                                    01:58                     Okay, perfect. We’ll blank that out. So I researched and thinking about investing in

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern, to decode industry jargon, silence confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 111, Tonight Andrew and I are going to talk about some listeners, questions that we got. Then we’re going to focus a little bit on investing in our later years, i.e., our 50s or early sixties that kind of timeframe. We’ll talk a little bit about some thoughts we have on that related to some of the questions that we got recently about this particular subject. So I’m going to go ahead and start and read the first question. The first question is, Hi Andrew, my question is investing in your fifties I’m in the middle of a divorce of 31 years. We have accumulated a lot of wealth. So my question is, what would be the wisest strategy? I will have substantial alimony. Have worked outside the home for 29 years. So assuming I won’t need all the equalization payment, where would you suggest I start? I feel like I’ve lost much of the compounding times. So now what? I’m 58 and healthy to hope to see my eighties. I’d be thrilled to hear from you directly or cover the topic in an email for the broader crowd to work. I can’t be the only one in this situation. Thanks. Dave:                                    01:42                     When though when you’re not, so as somebody who is in your age range, I’m 52, so I’m the older one or the crowd here between Andrew and I and some would maybe sometimes I might be the wiser one, but I am not so sure about that always. , so I guess, I guess the first thing is I, my condolences about the divorce. I’m sure that could not be, easy to go through and I’m sure you have a bazillion questions going on. So as someone who’s gone through a divorce myself, I, I feel for ESL, it’s not an easy situation to go through. Dave:                        ...

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premi investment guidance for beginners, led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the nbers, your path to financial freedom starts now New Speaker:                   00:36                     Welcome to the Investing for Beginners podcast. I am Andrew Sather; we have another great interview for you today. Dave’s taking the day off again. Today we have Tobias Carlisle. He has done a ton of stuff in the online space, the investing space and made some great contributions to the value investing world as well. So with that, Tobias, I love to dig into all the stuff you’ve got going on, but thanks for joining us today. Tobias:                                  01:05                     Hey, thanks for the very kind introduction, Andrew. Appreciate it. Andrew:                              01:09                     Yeah, so I guess first things first, I’m just going to like dive right in and then maybe we can go over your background a little bit later. , just the top of the thing that comes to my mind cause I was listening to your book acquires multiple, which is a fantastic book by the way. For anybody, basically. We’ve mentioned your book several times on our show, but I think to cliff notes summary. It’s like I’m taking Joel Greenblatt’s ideas and adding an extra component to it and having a ton of backtesting research and all whole lot more than I’m not giving it full justice. But as I was listening to it, this huge thing that comes up as a theme over and over again is this idea of mean reversion. And I think it’s a fantastic way to kind of start a discussion about some of the things when you talk about value investing then that’s something that I don’t think is a term that gets presented to beginners a lot. So can you talk about what mean or diversion is and kind of how that applies to the stock market? Tobias:                                 

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Andrew:                              00:36                     Welcome to the Investing for Beginners podcast. I am Andrew Sather; Dave is taking the day off. So today I have a special guest with us. Today’s guest is David Keller. He is the president and chief strategist at Sierra Alpha Research LLC. I am very excited to hear what he has to say about behavioral finance. So before we dig into all of that and hear everything that David’s got going on and the stock market investing and finance world, first off, thanks to David for joining the show. And if you can give us the listeners just a short synopsis of kind of where you’ve been, how your investing journey has been and how it’s taken you and what’s something cool that you’re working on today. David:                                   01:26                     Absolutely. Thanks, Andrew so much for the invitation. It’s great too, great to join you. And I, I’ve listened to some of the the the episodes of the podcast. I think it’s fantastic and I love your focus on educating, uh, beginning investors that’s there. There’s so much that, uh, investors have to learn as I get started. So, so thanks for what you guys are doing. I think it’s great. Um, so my, uh, I’ve been in the financial industry for about 19 years. I started in, uh, mid 2000, which if you know, your financial marketing history man means you, you know, that the first, uh, you know, six, 12, 18 months of my investing, uh, experience where relatively difficult, which was coming out of the tech bubble and, and watching people that had come before me sort of struggling with that. And I was at Bloomberg, got in New York for the first eight years of a, of my career, and that’s where I learned about behavioral finance investors, sentiment decision making, and then a technical analysis. David:                                   02:20       &nbs...

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:37                     All right folks, welcome to Investing for Beginners podcast, this is episode 108 tonight Andrew, and I are going to talk about minimalism. Yes, minimalism. We’re going to talk about how minimalism can help you in a variety of different avenues of your life. And of course we’ll talk about the stock market and finance and some of that fun stuff, but we’re just going to kind of go and see where this takes us. Dave:                                    01:01                     So Andrew and I were talking off the air before we got on about this and I wanted to share some thoughts I had on somehow minimalism can help me with, for example, investing. So one of the things that have helped me a lot, and I’ve got this from some of my Gurus Warren Buffet, Charlie Munger, Monish Pabrai among others, Vitaly, many of these people. And one of the things that I do is I try to tune out the noise a lot. Uh, I don’t watch the news hardly at all. I don’t watch CNBC. I don’t have, you know, Bloomberg TV blaring at me all day long. I don’t pay attention to that stuff. It gets in the way. It distracts me from what I need to be doing, which is focusing on a company and trying to learn as much as I can about that particular company. And you know, thinking along those lines, thinking about how I can become smarter, better investor and getting distracted by all the different opinions and thoughts of things that go on. For example, you know, fin twit, that’s one of my guilty pleasures if you will, is going on Twitter and reading all the, you know, stuff that’s going on in the finance world from all these people that I follow. And it could be very entertaining sometimes, sometimes for good, sometimes for not so good. And it can take you down a rabbit hole. Dave:                          &nbsp...

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern to decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right, folks are welcome to investing for beginners podcast. This is episode 108 and I got some great listener questions, and we’re going to take a few moments answer those. Who are we kidding? It’s going to be more than a few moments. But we’re going to go ahead and answer these questions for you guys on air and we’ll just kind of go from there. So I’m going to go ahead and read it. Dave:                                    00:54                     The first question, so it says, Hi Andrew. First off, I want to sincerely thank you for all that you’ve taught me in regards to the stock market. I’ve always been interested slash intimidated, but once I caught onto your podcast, I couldn’t stop. They are just digesting more and more information on the market. So again, a huge thank you. Quick question, quick question. When it comes to dollar cost averaging, I am looking to invest $150 a month. With that being said, I am ready to purchase my first share, which happens to be this month stock pick, ticker blah blah, blah. It is trading at $91, so I’m only going to purchase one share, but I’m curious now if I should save the remaining $60 for next month that purchased two shares are used, the remaining $60 I have to purchase another share of a cheaper sock. Any feedback would be helpful. Thank you, Eric. Andrew:                              01:44                     Okay, so to be clear, for people who don’t follow everything I do, I have a newsletter. It’s a paid newsletter called the say their research Eli there.

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers. Your path to financial freedom starts now. Dave:                                    00:35                     All right folks, we’ll welcome to the Investing for Beginners podcast. This is episode 106, tonight Andrew and I are going to talk about that, the disaster, true. That is Sears and all the goings on with that. And talk a little bit about bankruptcies and some other things. So Andrew, why don’t you go ahead and tell us about the article that you sent me today and we can talk a little bit about that. Andrew:                              00:55                     Yeah, it’s actually kinda depressing then, would piss a lot of people off, especially the people that work there. So Eddie Lampert, he was the former Sears CEO. Um, and I don’t know, maybe you know better than I was. He, did he have like, um, a big ownership stake in the company too? Is that why? Dave:                                    01:17                     I think so. Yeah. He’s a hedge fund billionaire. He was supposed to turn series into the next Berkshire Hathaway. Andrew:                              01:26                     How’d that, how’d that work out? Dave:               &...

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcast. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:37                     All right folks, welcome to Investing for Beginners podcast. This is episode 105, tonight. Andrew and I are going to read some listener questions and we’ll go ahead to answer those on the air and we’ll have our usual banter and witty, witty comments from each other as we go forward with all this. So I’m going to go ahead and read the first question. Andrew, would you like to say hello? Andrew:                              00:58                     Hello. Dave:                                    01:00                     Excellent. Good job. All right, moving on. Hello. I have been following your podcast for months and just recently signed up for your service. I noticed you’re using your Roth IRA for your stock recommendations and tracking your 40 year portfolio. I understand the benefits of using a Roth to avoid taxes but is absolutely unnecessary for the goal of your slash our investing. My Roth is being utilized with an advisor service from vanguard. So it was not available for individual stocks. I’m using a separate, separate taxable brokerage account for my stock picking. Would this still be beneficial in the long run with having to pay taxes yearly on dividends and capital gains are selling if in a taxable brokerage? Thank you Jared. Andrew, what are your thoughts on this? Andrew:                             

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcasts. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence crippling confusion and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:36                     All right folks, we’ll welcome Investing for Beginners podcast, this is episode 104 tonight, Andrew and I are going to talk about in terms of Warren buffet style. So I recently wrote a post, I had this idea and I ran it by Andrew to see what his thoughts were. So I kind of, and he liked it. So I kind of flushed it out and posted a blog post on his website. It’ll probably be up sometime next week and Andrew and I thought we could talk a little bit about it and I could kind of go through my idea and my thesis and then Andrew can try to pick it apart. Ala Charlie Munger style. Andrew:                              01:08                     So, um, can I say, yeah, of course. I just want to, um, I’m excited for this. First off, um, be, I think it’s very important that we talk about this and we haven’t really, I don’t think we’ve really talked about DCF at all. So I’m excited for this and I guess, see, I’m going to interrupt you at times just because I think we need to think about the beginners who don’t know some of these terms at you and I are so familiar with. Right. So if you don’t mind, I’m uh, I’m going to interrupt you here and there to hopefully give context and help people understand better because I think if there could be a podcast episode that like makes DCF easy. I know for me, I try to learn DCF many times and vitality’s book, um, we had the telly on several episodes ago, his book, something about it just made it so simple that it all made sense to me. So maybe this episode can be that way for some other people. Plus it’s just a fascinating idea on topic. So I’m just really, really excited. Thanks. Yeah, I agree with you. Yes, of course. You can interrupt me at any time. Uh, and it is, you know, it is something that can be very daunting and hopefully I can shed a little light on kind of how this works and, and make it a little bit easier for everybody.

Announcer:                        00:00                     You’re tuned in to the Investing for Beginners podcasts. Finally, step by step premium investment guidance for beginners led by Andrew Sather and Dave Ahern. To decode industry jargon, silence, crippling confusion, and help you overcome emotions by looking at the numbers, your path to financial freedom starts now. Dave:                                    00:39                     All right folks, we’re welcome to Investing for Beginners podcast, this is episode 103 tonight. Andrew and I are going to talk about IPOs, uh, with the upcoming Uber IPO on the horizon. It’s going to begin here very shortly. Uh, Andrew and I thought it would be apropos for us to talk a little bit about IPOs and a little bit about Uber and just kind of our general thoughts about how this will work, what we think is a good investment and so on. So Andrew wants to go ahead and take your first stab at this, and then we’ll have a little conversation about it. Andrew:                              01:12                     Okay. I want to, so I guess to overview on the Uber IPO and then maybe we can talk about IPO is in general. So based on or recording this the day of their IPO. So it’s happening kind of in real time as we’re talking. They, some people, there are huge expectations for this. Lyft had an IPO very recently. Some people, I don’t know where they got this idea, but some people were thinking the Uber with IPO at like a hundred billion market cap. Um, I read, I read 120 billion. Like where, where do they, they just like put a bunch of numbers in a hat and Oh, 120 sounds nice. And that’s what they decide. I don’t; I don’t get it at all. Andrew:                              02:01                     The what ended up happening was 8.1 billion as of today as well. I’m seeing, uh, they’re saying Facebook raise like 16 visas raised 18 and 2008 and Ali Baba raised 25 billion to 2014. So to put that in perspective,