Not all tech is created equal

Lachlan Hughes

Investors continue to use technology companies as a proxy for risk, but we need to consider the value of individual stocks in the sector. As we survey the recent sell off in US tech outside our portfolio, we believe many of the share price falls are justified by company valuations.... Show More

The top five characteristics of 'Super investors'

Lachlan Hughes

Earlier this year I reviewed my top ten investment books of all time on Livewire. My goal was to share some of the perspectives of the world’s best investors. In this wire, I summarise those reviews to identify the top five characteristics of the world's best investors, the 'Super investors'. Show More

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Book Number 3 - Margin of Safety by Seth Klarman (Revised May 18)

Lachlan Hughes

Seth Klarman is widely recognised as one of the greatest value investors of all time. He is CEO and Portfolio Manager of the Baupost Group, a hedge fund managing over US$31 billion. His book, Margin of Safety is a value investors’ classic. Klarman practically explains the philosophy of value investing... Show More

Book Number 4 – The Most Important Thing by Howard Marks (Revised May 18)

Lachlan Hughes

Howard Marks is the Chairman and Founder of Oaktree Capital Management, an investment firm managing over $120B. This is not a how to invest book and you will not find any step by step instruction. When it comes to investing, Marks believes there is no sure-fire recipe for success. This... Show More

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Book Number 6 – The Little Book of Value Investing by Christopher Browne (Revised May 18)

Lachlan Hughes

Today I review the investment classic authored by Christopher Browne, ‘The Little Book of Value Investing’. Browne was a partner at Tweedy, Browne Company – the oldest value investing house on Wall Street. Again, I recommend reading the book in its entirety. However, here are my favourite chapters. Show More

Book Number 7 – The Great Crash 1929 by John K. Galbraith (Revised May 18)

Lachlan Hughes

Originally published in 1955, The Great Crash 1929, provides a timeless reminder of the economic consequences of financial speculation, excess leverage, and herding. Many parallels can be drawn between The Great Crash of 1929 and the Global Financial Crisis of 2008. There are moments in this book where you may... Show More

Book Number 8 – Common Stocks & Uncommon Profits by Philip A. Fisher (Revised May 18)

Lachlan Hughes

Warren Buffett once described himself as being 85% Ben Graham and 15% Phil Fisher. If Ben Graham is the father of value investing, Phil Fisher is the father of growth investing. The primary difference between the two philosophies is clear. Ben Graham’s investments tend to benefit from a one-time profit.... Show More

Book Number 10 - You Can Be a Stock Market Genius by Joel Greenblatt of Gotham Capital (Revised May 18) 

Lachlan Hughes

Over the next ten days, I will review and post my top 10 investing books of all time - starting with number 10. I hope you enjoy the reviews and they provide you with some new perspectives that improve your investing. This book is a must read for any keen... Show More

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Clear Sky ahead for Catapult

Lachlan Hughes

Just a sensor stitched into a shirt? Well, not quite. Catapult provides sophisticated analysis to help understand player load with a view to preventing soft tissue injury. The technology also assists team management understand their players bio-mechanics in an objective way. The real smarts are in the algorithms that process... Show More

Hi David. With respect to Wells Fargo, this analysis assumes Wells Fargo pays the same net profit in 10 years’ time – a conservative assumption as its profits will most certainly be higher as the business grows. Wells Fargo produced net profit of $8.057B in 2007, this year it is on track to produce $21.1B in net profit. This period includes the global financial crisis which Wells Fargo weathered. Incidentally, the business was founded in 1852, 166 years ago so I think it is fair to expect it to be around for another 10 years. The return on the bond is fixed as long as it is held to maturity. If you buy a 10 year bond today at a par value of $100 with a 3% coupon, you will receive 10 x $3 coupon payments and you will get $100 back at maturity.

On The secret of sound investment in three words -

Hi Damien. I think we could. We need our politicians to create a law that the company (acting on behalf of its shareholders) can claw back any entitlements i.e. salary or bonus, for unscrupulous behaviour. I think that would produce a positive change.

On The top five characteristics of 'Super investors' -

@Adrian Thanks for your question Adrian. You raise an important point. Best practice is to accrue the performance fee daily, crystallise annually (subject to beating index) and apply a high water mark. The accrual ensures new investors aren’t being penalised for prior performance. This is important. However, it doesn’t help existing unit holders, who would have still paid a fee in my example.

On The dirty secrets fund managers don’t want you to know! -