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InvestED: The Rule #1 Investing Podcast
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InvestED: The Rule #1 Investing Podcast

Author: Phil Town & Danielle Town

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Phil Town is a hedge fund manager and author of 3 New York Times best-selling investment books, Invested, Rule #1, and Payback Time. On the InvestED podcast, Phil and his daughter Danielle shine a light on the successful investing strategies that gurus like Warren Buffett have used for 80 years. Listen in for a great stock market education on basics, learn how to invest on your own, and follow along with real-time examples and investing tips from week to week. Subscribe and leave a review. Questions? Email questions@investedpodcast.com.

317 Episodes
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The Berkshire Hathaway Annual Shareholder Meeting took place on Saturday, May 1, featuring Warren Buffett and Charlie Munger. In this episode, Phil and Danielle discuss more of the major highlights from the meeting. In the meeting, Buffett discussed his significant investment in Chevron. "I think Chevron has benefited society in all kinds of ways, and I think it continues to do so," said Buffett. "We're going to need a lot of hydrocarbons for a long time, and we'll be very glad we've got them." While Buffett also stated, "Chevron is not an evil company in the least and I have no compunction about owning Chevron. If we owned the entire business, I would not feel uncomfortable about being in that business." This poses the question regarding investing with your values. Our personal values are incredibly important to successful investing. Almost no one talks about how to connect your values or your heart to where your money is going. Remember that wherever you’re putting your money is what is going to grow in the world. And by making the decision to invest based on our personal values, we can change the world radically. Probably faster than any single thing we could do is to put our money where our values are. Rule #1 investors only buy companies that we really want to see in the world. Now, how do you know what your values are? Your values are what you do. Your values are not what you say you’re going to do.  Learn how to invest with your values first with my 3-Circles Guide. You’ll discover how to use what you know and love to find businesses that match your values and lifestyle. Click here to get started: https://bit.ly/3ofTar7 Learn more about your ad choices. Visit megaphone.fm/adchoices
The Berkshire Hathaway Annual Shareholder Meeting took place on Saturday, May 1, featuring Warren Buffett and Charlie Munger. In this episode, Phil and Danielle discuss some of the major highlights from the meeting. Munger took an aim at bitcoin and cryptocurrencies during the conglomerate’s annual meeting on Saturday, stating “I think the whole damn development is disgusting and contrary to the interests of civilization.” Buffett and Munger also discussed potential tax hikes from the Biden administration, and expressed not being concerned about them. Buffett mentioned that some companies try to fear-monger by saying the tax rates will be passed through to customers. “It's corporate fiction when they put out statements about the fact that it will be terrible for all of you people,” Buffett said. Buffett also stated that there is a lot more to investing than picking a budding or trending industry. Buffett warned newbie investors, and Phil and Danielle have always agreed with this take on smart investing.  Listen to this InvestED podcast today to hear more highlights, and Phil and Danielle’s takeaways on the topics discussed in the Berkshire Hathaway Annual Shareholder Meeting.  Rule #1 has been built on the principles of a proven investing method used for the last 80 years by successful investors like Buffett. To invest the Rule #1 way means to “Never Lose Money,” but what it means in practical terms is to invest with certainty. Certainty comes from this: buying a wonderful business at an attractive price. The word wonderful actually encompasses three out of four elements in the Four Ms: Meaning, Moat, Management, and Margin of Safety. Learn more about the Four Ms with this free guide: https://bit.ly/3tjv2ED Learn more about your ad choices. Visit megaphone.fm/adchoices
The stock market crash of 2020 began on Monday, March 9, with history’s largest point plunge for the Dow Jones Industrial Average (DJIA) up to that date. Some investors were scared or nervous but Rule #1 investors, like Danielle, were actually excited about the drop. She is confident in her investing decisions and realized it was an excellent opportunity to load up on more great companies. The market runs in cycles. It goes up, it goes down. But we have to look beyond the charts.  While the cycles give us warning signs of potential crashes, predicting the market is not an exact science. The economy reacts to more than just the market cycles. You need to have the perfect storm — many events and economic conditions coming together — for a drop to happen.  The important thing is to be prepared for whatever may happen in the market. Keep on saving for retirement and keep on making good investment decisions. Rule #1 investors know how to take advantage of all kinds of economic conditions, including market drops. If you understand the principles of Rule #1 investing, you will find opportunities to increase your long-term wealth. Rule #1 investors do not fear market crashes. They know that downturns provide the best buying opportunities. Today, Phil and Danielle discuss how to look at the market objectively so you have an advantage over other investors during a market drop.  Learn how to pick stocks with this free guide I’ve created for you and be ready when your chosen companies go on sale. Preparation plus opportunity equals success. Click here to download: https://bit.ly/3nrRyKq Learn more about your ad choices. Visit megaphone.fm/adchoices
If you haven’t heard the news already, Bernard Madoff has just passed away at the age of 82 in a federal prison hospital in Butner, North Carolina. For more than 50 years, Bernie Madoff was renowned on Wall Street as a big money manager who founded his own firm at age 22 and became non-executive chairman of the Nasdaq in 1990. Madoff was famously known for running the largest and possibly most devastating Ponzi scheme in financial history. He defrauded thousands of investors out of tens of billions of dollars over the course of about 17 years. Madoff was busted on December 11, 2008 after his two sons turned him in.  Victims included director Steven Spielberg, actor Kevin Bacon, former New York Mets owner Fred Wilpon, Hall of Fame pitcher Sandy Koufax and Nobel Peace Prize winner Elie Weisel, as well as ordinary investors like Burt Ross who lost $5 million in the scheme.  In a 2013 email to CNBC from prison, Madoff mentioned that the break in the market that started the Great Recession led to his scam. “I thought this would be only a short-term trade which could be made up once the market became receptive. The rest is my tragic history of never being able to recover.” In today’s podcast, Phil and Danielle discuss Bernie Madoff and his scheme that led to the nation’s largest financial fraud in history,   You can learn a lot from the history of financial figures and investors. Check out my guide where I discuss some of the best investors in the world: https://bit.ly/2P21xJs Learn more about your ad choices. Visit megaphone.fm/adchoices
According to Phil and other value investors, investing should always essentially involve the same principles — even for non-stock investments like bonds. Putting your money where your values are, buying investments at a discount, and being able to move through different types of assets fluidly.    For example, bonds and securities are other types of low-risk investments that investors purchase. However, their potential for returns is much lower as well. A bond might only make you a 3% return on your money over multiple years. This means that when you take your money out of the bond, you’ll have less buying power than when you put it in, because the rate of growth didn’t keep up with the price of inflation.    Bonds can be purchased from the US government, state and city governments, or from individual companies. Mortgage-backed securities are a type of bond typically issued by an agency of the U.S. government, but can also be issued by private firms.    When you purchase a bond, you are essentially loaning money to either a company or the government. For U.S. investors, this is typically the U.S. government, though you can buy foreign bonds as well. The government or company selling you the bond will then pay you interest on the “loan” over the duration of the bond’s life cycle.   Corporate bonds are slightly riskier than government bonds because there’s more risk of a corporation defaulting on the loan. Unlike when you invest in a corporation by purchasing its stock, purchasing a corporate bond doesn’t give you any ownership of that company.   In today’s podcast, Phil and Danielle discuss bonds, and why the best investments to make for yourself depend on your risk tolerance, level of understanding of certain markets, timeline, and reason for investing.    Learn more about your different investment options with this Complete Guide to Investing for Beginners in 2021: https://bit.ly/3dYlBVI Learn more about your ad choices. Visit megaphone.fm/adchoices
311- Is Doomsday Coming?

311- Is Doomsday Coming?

2021-04-0632:131

Warren Buffett is currently sitting on about $150 billion in cash. Could this mean that doomsday — or a major market correction — is coming? Most of the time, successful investing is a waiting game. Just as there are poor times to sell your stocks, there are poor times to buy them as well. And sitting on cash while you wait for a better opportunity is often one of the best investing decisions that you can make. As Rule #1 investors, we try to invest in companies that have at least a 50% margin of safety, meaning that there is at least a 50% upside between the company’s stock price and its true value. When valuations are as high as they currently are, though, it becomes difficult to find any quality companies that exhibit this margin of safety. Looking at the Shiller PE ratio, prices have only been this high twice in the past 140 years. The first time they got this high was in 1929. The second time was in 1999. But we might not be here for much longer.  Following the smart money — defined as money from big-time investors who know the market better than anyone — is rarely a bad idea, and right now, these investing gurus aren’t putting a lot of money into the market. Instead, the majority of the money flowing into the market right now is coming from retail investors. While these retail investors are buying stocks faster than ever before, the big investing gurus are sitting on their cash. This alone is a pretty good indication that right now might not be the best time to buy into the market. As Rule #1 investors, we like to find companies that are solid enough to survive and thrive no matter what the market does. When a major market correction, as the one that is very likely on the horizon drives the price of these companies down, the opportunity for great returns is higher than ever. Will the stock market crash? What are you going to do if it does? Today, Phil and Danielle discuss what investors should look out for in the stock market, and how to prepare for a potential doomsday. This Stock Market Crash Survival Guide will help you prepare for the next market crash and help you cash in when the market drops: https://bit.ly/3dDUfnF Learn more about your ad choices. Visit megaphone.fm/adchoices
In thinking about the process of finding wonderful companies at attractive prices, it helps to think of what I call the Four Ms: meaning, management, margin of safety, and moat.  This podcast is focusing on moat.   Most people know a moat to be the water around a castle but in investing terms, a moat is the durable competitive advantage that a company has that protects it from being attacked by competitors.   A moat is what makes a company predictable and allows us to put a value on the business. Charlie Munger said that “Coca-Cola is the perfect business because it has this gigantic durable competitive advantage, or moat, which gives it predictable cash flow.”    This allows us to figure out what the future cash flow will be and value the company today, so we know whether we can buy it on sale or not.   Finding a business with a wide moat is key to finding a successful business to own, because a business with a wide moat is much more predictable for the next 20 years than a business with no moat.   The idea of the moat is really simple. If an industry looks as if it might be very easy to get into, there probably isn’t a moat. On the other hand, if an industry looks as though it might be really hard to get into and be successful, you’ll probably find some wide-moat businesses.   In today’s podcast, Phil and Danielle discuss moat and value, and the processes in which they pick stocks with confidence.    Learn more about moat and the other three Ms of investing with this free guide that I’ve created for you: https://bit.ly/31xiBto Learn more about your ad choices. Visit megaphone.fm/adchoices
Stock splits happen from time to time, so it's important for us as investors to understand what they mean and how they might impact our investing decisions. A stock split is when a company decides to exchange more shares of its stock at a lower price for stockholders' existing shares. So, what happens to a stock’s price when it splits?   Nothing actually, although, it’s going to look like something big happened. Stock splits don’t change the market cap, which is the market price of the stock on a given day multiplied by all of the shares, or the sticker price of a stock one single cent. Not a penny. All a stock split does is change the number of shares and the price per share. I repeat: this does not change the total value of all those shares by even one cent. A lower stock price makes it easier to trade because the stock becomes more attainable for interested investors who may have been priced out of buying it in the past. Lower prices make it easier to find buyers than higher prices. When a stock price goes over $100 a share, people start to think of it as “expensive” even though the price of the stock has nothing to do whatsoever with the actual market cap of the business. A business worth $1 million is worth $1 million whether there is one share worth $1 million or 1000 shares worth $1000 each or 1 million shares worth $1 each. But how many buyers are out there for a single share of stock worth $1 million? Not very many. Let’s say there was one buyer. The owner of that single share might have to take a much lower offer simply because there is only one buyer. But if there were a million shares at $1, there can be lots of buyers. Lower stock prices make trading easier, which makes investors trade more often. Trading more often makes for higher stock prices. The bottom line is that stock splits have no effect on the true value of a company. As Rule #1 Investors, we care about the value of a company, not its stock price. We don’t base our investments in a company on the price per share but instead look at the entire company as a real owner does. Learn how to find high-performance stocks with my Four Ms for Successful Investing guide. Click here to download: http://bit.ly/3f4Q32o Learn more about your ad choices. Visit megaphone.fm/adchoices
308- Cash is Trash!

308- Cash is Trash!

2021-03-1635:261

It’s never a great idea to sit on too much cash. Why? One word: inflation.   Inflation is the devaluing of a currency’s buying power. It occurs over time as the government pumps money into the economy and there’s a larger money supply buying a relatively fixed amount of items.   As the money supply grows, people feel like they have more money, so they’re willing to pay more for things. When there’s a lot of inflation, wages tend to increase and people then feel like they’ve got even more money, so they’re willing to pay a little bit more for a Coca-Cola.   Inflation is something that many people completely forget to factor in when calculating how much money they’re going to need for retirement.   Most people tend to assume that if you want to live on, say, $50,000 a year for the rest of your life you need to multiply that number by 30 years and that’s how much you need.    What they don’t take into account is inflation. This means that to retire, you may need much more than you think. The small percentage may not seem like a lot, but over time, it adds up.   This is why investing is one of the most important things you can do to set yourself up for a financially secure future. Not just investing in anything, but investing in companies that align with your values. By making the decision to invest based on our personal values, we can change the world radically.   In today’s episode of the InvestED podcast, Phil and Danielle discuss why cash is trash, and why it’s important to set yourself up for a financially secure future by investing with your values. Learn how to invest with your values with my Four Ms for Successful Investing Guide. Click here to download: http://bit.ly/3eFrdWP Learn more about your ad choices. Visit megaphone.fm/adchoices
307- Stock Brokers

307- Stock Brokers

2021-03-0933:561

After you have found a worthy company you would like to invest in and it’s on sale, the final step is to actually purchase the stock through a brokerage account so you can start reaping the rewards. This is an important step in the investing process, but it can seem confusing because there are several brokerage options out there. Buying shares in any company will require you to go through a broker. Brokers enable you to easily buy and sell shares in any public company, but they do charge a fee for their services. Once you are working with a broker, though, buying shares of a company is as simple as ordering something out of a catalog or making a purchase on Amazon. Simply choose the stock you want to buy, the number of shares you want to buy, and complete your purchase. A great option that has come available in recent years is the use of online brokers. Online brokers are a little more “self-serve” than traditional brokers, however, their fees are also much lower. For beginner investors with small amounts of money, online brokers are the best choice because the high brokerage fees of traditional brokers have the potential to eat up any profits. A few options include Charles Schwab, TD Ameritrade, Vanguard, Fidelity, and Robinhood. In today’s episode of the InvestED podcast, Phil and Danielle discuss stock brokerages, and explain why it’s so important to do your research before you commit to any broker. Learn more about getting started and making your first investment with my Complete Guide to Investing for Beginners in 2021. Click here to download: http://bit.ly/3qo3JI1 Learn more about your ad choices. Visit megaphone.fm/adchoices
Warren Buffett’s highly anticipated shareholder letter was released this past weekend.   In this annual letter, Berkshire Hathaway's quarterly reports have offered investors a glimpse into the company's inner workings.   Buffett also highlighted the fact that among the biggest winners in Berkshire’s investment portfolio was its 5.4% stake in Apple. Buffett noted that the iPhone maker was now one of his company’s three biggest assets, with its stake worth $120 billion as of December 31, 2020.   Berkshire ended last year with $138 billion in cash. This is likely due to the market still being extremely overvalued.    Being one of the best value investors in the world — if not the best in the world — Buffett understands the importance of only purchasing wonderful companies at discount prices.    In the annual letter to shareholders, Buffett reminded investors that miracles do occur in middle America despite much of the attention on the east and west coast.    “Success stories abound throughout America,” the investor said. “Since our country’s birth, individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their dreams by creating something new or by improving the customer’s experience with something old.”   In today’s podcast, Phil and Danielle discuss a few key takeaways from Warren Buffett’s annual letter to shareholders, and why Warren Buffett and Charlie Munger are two of the most important value investors in history.   Learn about purchasing wonderful companies at discount prices with this FREE guide I've created for you: http://bit.ly/3bPTyqb Learn more about your ad choices. Visit megaphone.fm/adchoices
“There’s nothing evil, per se, about selling things short. Short sellers—the situations in which there have been huge short interests very often—very often have been later revealed to be frauds or semi-frauds.” — Warren Buffett Short selling, or shorting, plays an important role in public markets as it improves prices, rational capital allocation, prevents bubbles, and shines a light on fraud.   If investors think a stock's price is dropping, they can short the stock. They borrow shares and sell them with hopes of buying them back at lower prices. However, stocks can theoretically keep rising, which could cause losses. So the investors that short the stock will either have to put more money up to secure their position or close their positions.   Essentially, short selling exposes which companies' stock prices are too high. In their search for overvalued firms, short-sellers can discover inconsistencies or other questionable practices before the entire market does. Short sellers can almost be regarded as the “watchdogs” of the market.   A recent example of this is the Gamestop event which caused many investors to either gain or lose money, as shorting isn’t ideal for all investors. This is why it’s important to invest with your values—so you can invest with confidence and reduce your risk of making bad investing decisions.    When looking for companies to purchase, always consider the Four Ms: meaning, moat, management, and margin of safety. This is the first step you need to take when building your watchlist of companies you are interested in.   In today’s podcast, Phil and Danielle discuss the important role short sellers play in our market and why it’s important to invest with your values.   Learn about the Four Ms and how they can help you invest in the right businesses at the right time with this FREE guide I've created for you: http://bit.ly/3btAqhM Learn more about your ad choices. Visit megaphone.fm/adchoices
Every type of investment has its upside and downside, and some are riskier than others. Cryptocurrencies, for example, are the newest type of investment. They are unregulated digital currencies bought and sold on cryptocurrency websites.  Cryptocurrencies such as Bitcoin have gained a lot of interest in recent years as an investment vehicle—some people even think it may replace gold in the future. However, cryptocurrencies remain an incredibly risky investment due to the fact that there are many unknown factors. For example, there is the possibility of government regulation and the possibility that the cryptocurrency will never see widespread acceptance as a form of payment. At this point, no one knows for sure what the future holds for cryptocurrencies, so investing in cryptocurrencies is little more than speculation. Rule #1 investors don’t invest in things they don’t know. That’s not investing, that’s gambling. On the other hand, cash and commodities are typically considered low-risk investments. So if you’re new to investing or risk-averse, one of these options could be a good place to start. However, these low-risk investments also tend to have low returns.  Gold is an example of a commodity, so its price is based on scarcity and fear which can be impacted by political actions or environmental changes. If you are investing in gold, be aware that your protection against a price drop, your moat, is based on external factors so the price can fluctuate a lot, and quickly.  The price tends to go up when scarcity and fear are abundant and down when gold is widely available and fear is abated. If you think the world is going to be a more fearful place in the future, then gold could be a good investment for you.  Everyone’s reasons for investing and personal risk tolerance are different, so you have to decide which investment types suit your lifestyle, timeline, goals, and risk tolerance best. What a good investment is for one person isn’t necessarily a good investment for you. Listen to this podcast today for more information on your different investment options and the risk related to each. Learn more about your investable asset options with my Beginners Guide to Investing in 2021. Click here to download: http://bit.ly/37ldvE2 Learn more about your ad choices. Visit megaphone.fm/adchoices
Square is a financial service, merchant services aggregator, and mobile payment company based in San Francisco, California. Danielle has openly expressed her excitement for this company—but what makes it so special? In 2009, Square initially started as a solution to mobile businesses without mobile payments. It took Founders Jim McKelvey and Jack Dorsey about 3 years to understand the market at the time, and how they could make an impact in this space.  They entered the market and were able to provide a small device that could be easily inserted into the audio jack of smartphones. With this convenient hardware and only a 2.75% transaction fee, they quickly divorced the merchant from the shackles of digital wires.  The successes of these innovations were multi-faceted. The infrastructure for payment processing was no longer costly for a specialized machine, but a small add-on to devices we already own. This also meant that as long as someone had the Square app, they could be a transaction node as well. Square continues to show viral growth, with revenue up year over year. This week on InvestED, Phil and Danielle welcome podcast guest Jim McKelvey, the co-founder of Square. Jim talks about his book, “The Innovation Stack,” and how innovation ultimately is what impacts a company’s success. What does it take for a start-up to turn into a successful business? Listen to the podcast today to find out.  Interested in getting your own copy of "The Innovation Stack?" Order it at https://www.jimmckelvey.com. Learn how to find high-performing, innovative companies with my Four Ms checklist! Click here to download: http://bit.ly/2LzEBQ2 Learn more about your ad choices. Visit megaphone.fm/adchoices
This is an exciting time to be an investor in the stock market. As you know by now, Reddit investors just launched an "attack on Wall Street" by purchasing shares in GameStop. This pushed the stock price up over 480% in a week.  The investor who helped direct the world’s attention to GameStop is 34-year-old Keith Gill. Gill used Reddit’s WallStreetBets message board to promote GameStop, and used the identity of Roaring Kitty on his YouTube channel and Twitter page to help engineer a short squeeze against the hedge funds that were betting the price of GameStop would drop. But what is a short squeeze? If investors think a stock's price is dropping, they can short the stock. They borrow shares and sell them with hopes of buying them back at lower prices. However, stocks can theoretically keep rising, which could cause losses. So the investors that short the stock will either have to put more money up to secure their position or close their positions. If they choose to close their position, they are buying the stock to exit their position. This can drive the price higher and force other short sellers to do the same.  This creates a continuous cycle of buying and pushing the price up even higher. This is the short squeeze, as those short the market essentially get "squeezed out.” And it's exactly what happened with GameStop. Hedge funds and other short-sellers have lost an astounding amount betting against GameStop, and there has been a regulatory response to this event. Robinhood limited the number of shares each user can purchase, stating that the trading restrictions were risk management decisions to protect Robinhood and its clearinghouses.   In today’s podcast, Phil and Danielle discuss the GameStop situation and explain why the market should be free—where regulators stay out of the “little” guy’s way. Learn more about the basics of investing in the stock market with my Beginners Guide to Investing in 2021. Click here to download: http://bit.ly/39EOFR0  Learn more about your ad choices. Visit megaphone.fm/adchoices
Are you one of the winners of the InvestED 300th podcast episode giveaway? Listen to this podcast to find out!  Investing in stocks is one of the best things you can do to set yourself up financially, but you have to first understand the company valuation process in order to actually make money. When a company decides to go public, an investment bank helps determine what the price of the company’s stock should be at their Initial Public Offering (IPO), when they become available to purchase on the stock exchange. They determine the initial price based on the value of the company and early interest from investors before the stock is available to the public.  After the company goes public, the stock price is based on supply and demand. When the demand for a stock goes up, its price goes up. The demand can increase if the company is doing extremely well and its value is increasing, or it can increase simply because of excitement from other investors.  It’s important to remember to not get the “value of the company” confused with the “price of the stock.” The market can be incredibly emotional and price a great company way under their true value and vice versa. Ultimately, the stock price is determined by greed when the stock price is going up and fear when the stock price is going down. This is why it’s important to invest with certainty within your circle of competence. Love what you own, and put your money where your values are. Most of us have the intention to make the world a better place, but seem to forget that the businesses that they invest in have a direct impact on what is going to exist in the world in 10-20 years. In today’s podcast, Phil and Danielle announce the winners of the InvestED 300th podcast episode giveaway and discuss rational investing in 2021. Learn more about using your Circle of Competence to pick stocks with my 3 Circles Exercise Guide. Click here to get started: http://bit.ly/3pn4Bgj Learn more about your ad choices. Visit megaphone.fm/adchoices
This week, we are celebrating the 300th episode of InvestED by doing a prize giveaway! Here’s how to enter: Go to investedpodcast.com Click the button “Click here for details!” Follow the steps for a chance to win: A FREE ticket to a 3-day Virtual Investing Workshop (a $300 value!) A signed copy of Invested* A $100 Amazon e-gift card Your question featured on the 301st episode of InvestED Danielle’s Bundle: A yearly subscription to the Invested Practice Newsletter and access to the Mostly Invested Online Course In this episode, Phil and Danielle bring great insights to their analyses of Li Lu’s speech from 2015, “The Prospect of Value Investing in China”.  Li Lu opens this speech by describing the ethics he believes all investors should follow: Make it your ethical obligation to seek truth and wisdom Be a really good fiduciary for your investors as if it’s your own money or your parent’s money He further implies that as a value investor in China, you will reap the benefits of finding wonderful companies because even then you can take comfort in the huge margin of safety or choose to exit. What was their biggest takeaway from his speech? Listen to the podcast today to find out. Learn more about your ad choices. Visit megaphone.fm/adchoices
One of the best things about investing is that it is possible for everyone to succeed—no matter your age, income, gender or IQ.  As a beginner investor, it’s easier to avoid mistakes and decrease risk by investing in companies you are already familiar with, and that have meaning to you.  For example, if you work in the tech industry, it’s going to be much easier for you to understand the goals of a tech company as well as their potential to reach those goals than it is going to be for you to evaluate a company in the pharmaceutical industry. Consider your personal passions, talents, and spending habits. Better yet, map them out using a venn diagram, placing passions in one circle, talents in another, and spending habits in another. Where these three areas overlap is your “Circle of Competence”, reflecting the industries and sectors you have the most knowledge of and where you should start your search for companies to invest in. Over time, you can begin to research companies across various sectors and expand your knowledge-base and comfort zone, but investing within your Circle of Competence is the best place to start. As you embark on your investing journey, remember to stay rational, mindful, and disciplined. It is the only way you will be successful in value investing.  In today’s podcast, Phil and Danielle discuss value investing in 2021, and best practices for investors of all levels to be successful in the stock market. Ensure you always make smart investment decisions with my 3 Circles Exercise Guide. Click here to get started: http://bit.ly/3ozYpkJ Learn more about your ad choices. Visit megaphone.fm/adchoices
It’s so important not to invest or sell stocks too soon. While the desire to get in on the ground floor of a brand new company or industry is certainly understandable, it is most often better to let the dust settle a little so that more information is available and you can do proper research before making an investment. Although, even with proper research and due diligence, even the most successful investors’ journeys are still fraught with errors and investing mistakes. Nevertheless, as painful as these investing mistakes are at the time, you can learn a lot from them and can use them to become a better investor. After all, no one wants to lose money on their hard-earned investments down the road.  The best way to avoid losing money on investments is to follow a proven investing strategy and never stray from it. Making irrational decisions based on emotions can be costly.  By avoiding greed or fear-based decisions, you can pursue a successful investing career and hopefully avoid the business and investment problems that investors like Warren Buffett and Benjamin Graham have experienced in their early years. In today’s podcast, Jeremy Deal—founder of JDP Capital—sits down with Danielle to discuss his biggest investing mistakes so that you can learn from them! Ensure you always make smart investment decisions with the Rule #1 Cheat Sheet for Smarter Investing. Click here to download: http://bit.ly/3pHRNRg Learn more about your ad choices. Visit megaphone.fm/adchoices
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 to sell that stock when it’s fully valued in order to make a profit. A simplified look at a successful investment is one where an investor buys a company for a certain amount of dollars, holds on to the company for an extended period of time until its value has grown to the point that they feel comfortable selling it, and then sells it above what they purchased it for.  Buying great companies when they are on sale is what Rule #1 investing is all about, but it’s fine to wait to buy until you are sure you are getting both a wonderful business and a great price. Think of it this way: you would never buy 100% of a company without thorough due diligence, and, likewise, you shouldn’t buy a small percentage of a company without the same. When the experts—such as Warren Buffett or Charlie Munger—are publicly stating that they are sitting in cash, this is an indicator that they are waiting for a dip in the market, or an event to trigger their next large purchase.  On this vault episode of InvestED, Phil and Danielle answer a listener’s question regarding sitting on cash and managing your investments. Learn how to invest and make decisions with confidence with the Rule #1 Cheat Sheet for Smarter Investing. Click here to download: http://bit.ly/2KthciL Learn more about your ad choices. Visit megaphone.fm/adchoices
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Comments (33)

D Uknow

Please turn down your daughter's mic, and ask her to refrain from interrupting you or your guests. When a thought pops into her head, she seems to blurt it out regardless of whether it needs to be said, and louder than anyone else to ensure that she successfully dominates the conversation. Other than that, great podcast!

Mar 4th
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Rumen Petrov

i thought most people knew about inflation and that just keeping your money under your matress will devalue them. It is true tho that most people have no idea...

Feb 19th
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Maxime Laroche

this podcast is seriously underrated

Aug 6th
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Joe Ramirez

Ok you guys put me on an emotional roller coaster this entire podcast!!! LOL , I've been thinking a lot about airlines as well but now I have no idea hahaha

Apr 15th
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Alex Johnson

Great episode! I appreciate Danielle's willingness to challenge and refine ideas, but it got to be a bit distracting with how much she sidetracked the conversation. Awesome talk, though.

Mar 26th
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Daniel Payne

llll5

Nov 20th
Reply (1)

Matthew W. D'Ambrosi

Great episode. Most of us (the average person) have money locked into our 401Ks. The majority of these options are indexes or the like that you speak of in this episode. What would you suggest we do in terms of our "practice" in the way you teach? The average investor or new investor does not yet have the available capital sitting on the sidelines readily yet to deploy. Thank you! We listeners greatly appreciate you!

Oct 3rd
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Samy

I started to like index funds this year and have invested in many ETFs through M1 Finance. But now I am back to square one with my retirement. Index funds aren't safe,then do we trust the fund managers of Mutual funds to do the right thing?

Sep 30th
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Tom MacDonald

Phil got it mixed up. two dice rolling 10 is much higher probability not lower than 6s or 7s. As a matter of fact the lower the number you are trying to roll the more improbable it becomes. There are five ways to roll a 10 there is only one way to roll snake eyes. the probability drops from 10 to 1

Sep 3rd
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Tom MacDonald

me too!

Aug 29th
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Todd Watts

I really liked this episode. Informative, in a relaxed and not rushed manner. Looking forward to the next episode.

Jul 22nd
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Luis Paz

If I were a sentimental guy, this episode would have me in tears. This is exactly how I feel! Uncle Phil, and trying to get into this amazing family.! 😭

Apr 17th
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Neil Martin

lmao, Phil can you please share a time when bond funds fell 50%? Interest rates quadrupled between 1963-1982 and bond funds never came close to growth losses of 50%. Long term, bond funds like PIMIX are good investments especially as people approach retirement age. For younger investors, not as much. Also, index funds of major indices average 10% yoy going back 50 years. With compounding, that is a decent return for those not wanting to take the time to power through income statements or risk investing in individual stocks. I know you need to sell books but c'mon.

Apr 5th
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Work Phone

love it!!

Apr 5th
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George Scutaru

she interrupts soooooooo much...

Apr 2nd
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William Watson

I really enjoy listening to your podcast!...the father- daughter dynamic really appeals to me!!

Mar 6th
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Ariel Lee

Love this podcast and your books (Phils' and Danielle's). Your investing style really resonates with my personal values/philosophy and your fathwr/daughter exchanges are hilarious and helpful!

Jan 3rd
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Benjamin Westerfield

fantastic job!! love the book and pod cast.

Dec 31st
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AMama Lala

In regards to the part about "Window dressing" social conscienceness for a hundred companies makes me question the validity of Swell's Impact 400 index. are we saying that its NOT possible to get 400 companies that are making a positive impact?

Sep 19th
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AMama Lala

signed up. Thank you for sharing!

Aug 16th
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