Margin Of Safety Book Summary - Chapter 5 - Your Goals
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- เผยแพร่เมื่อ 6 ต.ค. 2022
- We continue with our summary of the Margin of Safety by Seth Klarman, one of the best investing books out there.
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We need more people like you in our education system.
Thanks!
Great summary! I appreciate the illustrations with the charts. That was really helpful.
thanks!
Hi Sven, I compleatly stoped watching your videos discoussing particular stocks, as I don't have the time to watch everything on you tube, and want to do my own resurch. But the book's sumary's you started doing are pure gold, and while a lot of your videos have the same "mantra" i watch them from time to time as its easy to forget and the repetition keeps me second gessing my decisions. Thank you for the great job you are doing.
that is also great!!! Thanks!
I love these book reviews you are doing hope you do more in the future because it's not about a particular stock. It's about knowledge sharing and learning value investing. 3 cheers for Sven!
knowledge is the only power!
One if the great finance channels on TH-cam ❤
The best imo!
@@maxjames00077 I agree the Kevins and Jeremys got big and trashed themselves pumping trash 🗑
Thanks!!
I noticed in another video you referenced that these are some of your least watched videos even though they shouldn't be and I cant help but agree with you
Hi Sven, just wanted to say that this serious is great. I've read this book already but watching your series on the book has kind of motivated me to read it again because there's so many gold nuggets that any fellow investor can learn to have success in their investment journey. I hope you do other series like these on other investment books that you like. Overall, your great and doing a positive thing by spreading the right mentality when it comes to investing. Have a great day.
thanks, yes, this book has to be read over and over!
Thanks Sven. Keep melting the snowflakes ❄️
:-))))
Sempre ben druze Sven, grazie per il servizio
Grazie
Excellent video Sven! These "Margin of Safety Book Summary" videos are really awesome. Grazie! 😉
Glad you like them!
Beautiful summary. Thank you, Dr. Sven.
thanks!
Amazing stuff!
:-)
Thanks for this great summary! Very interesting and insightful content. LOL at 9:50!
:-)
Wonderful, thanks!
Thank you too!
🗽 Thx for explaining "don't lose money" 🙏
.
Always!
Thanks , great video
:-)
Low risk high reward makes sense : D If the reward function is reward/risk then if risk approaches 0 the reward function jumpes to infinity 😎
yep, but that is also the hardest part within it all!
Thank you
Thanks!!!
Hi and thank you for covering the most important things in investing! I was wondering, since we focus on fcf, but what value does the fcf create for owners/investors when most of it goes to financing activities like paying down rent and interest expenses on leasing and bank loans and other expenses to maintain the operations of the businesses?
That isnt fcf, that is operating cash flow!
Hello Sven thank you for the great video!
What do you think about dollar cost average covered call ETF's such as JEPI (Less volatility and around 10% steady returns) when the market is overvalued, and when the market is in value territory, dollar cost average SPY?
Thanks again for the great videos and effort!
I don't know about JEPI :-( check the risk and reward!
@@Value-Investing thank you!
I know you don't really prefer REITs (technically I kinda hesitate to call this one REIT, but they seem to run this business as a REIT), but now I have a situation where I seem to be "alone" with the management buying big yellow.
Well, anyway, the question is more about human nature seeking validation and management starting to buy after my own purchases give a warm feeling. This in my opinion is kinda bad for value investors as it could lead to overconfidence quite easily. Do you have tips on how to handle this kind of information to avoid fooling oneself?
That is not really relevant, it is about zhe cash flows from today, to judgement day!
new jacket, new life! Very important video.....
:-)))
« Don’t lose money »
Sven, what does that mean when we are in a bear market like now? Is it ok to be down or does it mean I didn’t focus enough on risk in my analysis? Does it mean to not to be more down than the principal market indexes during any given year?
Im having a hard time understanding the meaning, even though you did greatly explain it in your video! 👍🏼
it means to own things that don't lose their value over the long term, don't overpay in bull markets etc... it is part of a long term strategy of investing! I feel I need to discuss the Don't lose money thing a bit more in depth!.
Sven, my biggest problem with looking at risk has always been to actually put a number on it.
For example, say a company relies on chips to make their product, in an environment where we are facing some risks of possible supply chain issues, but these risks may or may not materialise.
Are there any general guidelines on how to actually go about turning the risk factor into actual numbers that can be put into a DCF model? You seem to be able to do it so intuitively.
yes, there is a clear guideline: IT IS IMPOSSIBLE! The problem is that risk can only be quantified and known after it materializes. If it doesn't materialize, it seems not risks, even if it might have been very risky. They have tried with volatility measures, but that is again totally wrong!
Great video Sven!
I've watched in some videos that Buffett and Munger always look at company risks first before anything else 🙂
But what are the other risks associated in a stock? It seems that the chapter discussed in the book talks only about the high price paid..
Aren't there situations when a person bought a very cheap stock, but it never grew again after many years..
So of course, there are other risks..I wonder why the chapter identified only the high price as the risk?
that is just one risk! but more importantly, Klarman says that risk is a function of price. If you bought something cheap, and it never goes up, you paid too much:-)) Next videos will explain more, but it is a subject we could talk for decades!
@@Value-Investing
That is quite a new concept for me 🙂 "If you bought cheap and it never goes up, you've paid too much"
I'm so excited for the next video, so that I could figure out what it exactly means! 😁
0:58 Ok, but that's on nominal terms. If in 10 Years I am still having 1M deflected by inflation will be 800/900? So...I am losing.
I am guessing it should the principal in real terms.
We try to do our best, nobody knows what ibflation will be!!
What do you think about small caps with ariund 300 Mil. marketcap in terms of risk? It seems like there are some solid companies around the globe but volatilitie is higher. Do you have a suggestion how to balance a portfolio with small caps, mid caps and large caps?
depends on the small cap, forget about balancing!!!
@@Value-Investing I have found a couple of good small and mid caps with solid fundamentals. I have added some of my alltime favourite largecaps to reduce volatility (also reducing possible return). I am fully invested now. Wish me luck! I will pause on market news now. All the best to you!
Thank you Sven for making the video. As usual you are a good teacher for me.
Can you please look into:
Railway freight sector stock analysis
Union Pacific (Ticker: UNP)
Description: UNP offers transportation services for grain and grain products, fertilizers, food, and refrigerated products, and coal and renewables to grain processors, animal feeders, ethanol producers, and other agricultural users; petroleum, and liquid petroleum gases; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers.
Risk: High debt, a slowing economy, etc.
Reward: strong moat, steady stream of low returns
Catalyst: Lower debt in the near future
still too high for me to be interested in! th-cam.com/video/tJJwa3tdsbw/w-d-xo.html
I think the biggest risk for holding the riskier stocks is panic selling them when they are down. I’m not sure that this low risk style can co-exist with a Thomas Phelps like approach which is “buy right and hold on”.
Uh? It is completely compatible. It's your problem if you panic sell. But at this time, it may be correct to evaluate if you did buy right. Maybe you bought wrong? Be sure not to buy wrong! If you bought something like Pltr, that is probably buying wrong and panic selling is the appropriate action.
@@TheBooban the typical “hundred bagger” stock is going to be very volatile and will have large ups and downs with the general market and company performance whereas the Seth Klarman margin of safety style will be very downside limited. I don’t understand why people poo on Palantir so much. I personally don’t understand it enough to invest in it and I feel like most people don’t know enough about it to truly say how it is going to perform in the future.
@@anthonyschneider8835 poo on palantir because as you say, most don’t understand it but invest anyways. Everyone talks about it, but nothing of substance. That’s enough of a fail. But I happen to know a bit of the business, so I know what it is and how its a sham.
@@anthonyschneider8835 I’m still not really following this risky hundred bagger stock buying? Who says this? Margin of safety is buying below value where the stock is unlikely to ever be again.
Who is talking about buying risky stocks? All my buys are 100% risk free, even I were to buy a hundred bagger (which I haven’t found yet.)
This doesnt work together, but this is for 20% per year, not 10
could you do Petrobras please? ;)
9:49
:-)
Haha first with like and comment 😅
Great!!!
I was wondering, maybe someone knows here.
I'd like to lower my risk by increasing my exposure to US gvt bonds. However, my broker (DeGiro) doesn't allow me to buy US gvt bonds.
How can I buy 4ish% US gvt bonds as a non-US citizen?
Should be plenty of ETFs out there you can buy that hold US treasuries.
yes, try some ETFs if those are available for European investors!
4:00 Cryptos
:-)
Thanks for sharing a 1600€ Book lol
:-)
9:55 hahah love that Nelson from the Simpsons
:-)))
Ha ha!
Wait wait wait, you mean Crashy Woods buy high sell low approach to stocks won’t make me rich in the long term? What a shame….
ah... :-)))))))))))
Risk is a function of price. Sven, in one video you said it doesn't matter what price you pay as in the long term when the stock grows exponentially it doesn't matter. You used Facebook as an example, buying Facebook at $220 or $174 - "Only 54 dollars get out!" you said. But in every video I watch of you, you say the investment depends on the price. I feel there's a big contradiction here.
typically, the longer you hold, the more your investment return (IR) approaches the (popular measures of) ROIC of the underlying company. So, for example, if you invest in a company that compounds at a ROIC of 30% over the next decade(s), your investment will return will - even if you buy at a high price - eventually approach that 30%. So, you may end up with an IR of 25%; congratulations! Still, in view of the compounding nature of things, that 5% delta may still imply a multifold delta in terms of absolute returns.
There are many contradictions in investing, not just from Sven, there is so much investing advice and opinions out there that it's inevitable
@@marcusulpius3058 Yeah, over the long term, the S&P always goes up. This is a "risk free" investment. As in, you won't "lose" money. After 20 yrs, if your investment went up $1, well, you didn't lose money.
That does not mean you just buy whatever, whenever and whatever price. It just means that that is the 1st rule. Don't ignore the other rules.
I belive it doesn't matter the price you pay when you have a clear visibility of what ar you buying. "Buy a wonderful business at a great price or a great business at a wonderful price??
That holds only for one in 1000 businesses that has amazing Roic over a long period!!
I don't believe in accepting risk. All my buys are 100% risk free before I buy. Only been wrong a handful of times, in the long term.
Your comment makes no sense
@@luisrei1652 Why? Almost all my buys are profitable over the long term. What doesn't make sense?
Great!!!!
@@TheBooban there are risk factors in everything, even if we know it at the time or not. That risk just may be higher or lower and may or may not materialize. If there was such a thing as a risk free investment you would put all of your money into that and live happily ever after!
I am sorry, but telling someone "don't loose money" is the same like saying "don''t drive against a concrete wall". It's for idiots. In these social media times a better rule would be "don't trust anybody".
When it comes to risk the first question is about a definition what risk is. Macro risk, sector and industrial risk, portfolio risk, future/time risk and whatever else and how to cocktail all this together.
You can reduce your risk with position sizing, business cycles, cut loosers and not to crystal ball what will be with a single company ABC in 10 years. You don't have to be a genius for these things and these rules working with all kind of companies, not only Pepsi, but also Peloton or a mining company. But half of this is more about investors psychology than math.
I think you miss the point of value investing, if there is risk, you dont take it!