Providence Investment Class

Good day, investors!  For the final podcast of this season, let's talk about some of the things that great investors have in common.  Thanks for listening, and I will no longer see you in class ;) 

This episode is to help give a bit more structure, depth, and direction to how you can take your company analysis to come to a well-reasoned and confident recommendation.  It pairs with the final project outline.  

Warren Buffett isn't just known for his investment prowess and performance, he's also known for his wisdom and pithy sayings.  He's a very quotable guy, so let's talk about some of those quotes!

You might have thought we were done talking about Buffett.  If you did, you were mistaken.  Buffett still has plenty to teach us.  And as of this recording, he's still alive, so the greatest investment teacher of all time will keep teaching!  And so will I. 

You can buy or sell stocks with an information advantage over other investors that allows you to profit handsomely.  The way to do that is not with insider information, but with excellent in-depth company analysis.  In this episode, we talk through an example of that.  

Whether you do your own primary research or use the research produced by another analyst, there are multiple ways to analyze companies and their fundamentals.  Ideally, you will use all the tools and resources at your disposal, and we talk about those tools in this episode.  

Fundamentals. Are. What. Matters.  Everything else is...not fundamental!  Investing based on fundamentals is what will get you the long term returns you're looking for.  

I promised you that we would have a more in-depth discussion on positive sum versus zero sum games and how they apply to our investing discussions.  Here it is.  

There are many ways to approach investing in the stock market.  Let's discuss what some of the more common and popular investing "styles" are.  

Many people think the stock market is just a big casino for high-stakes gamblers, and that characterization is not wrong for many (maybe even most) of those who interact with the markets.  But there are two ways you can participate in the public markets: as an investor or as a speculator.  As a business owner or as a gambler.  One will net you long term wealth, and the other might net you some short term fun.  

We are going to spend a lot of time and attention in this course learning about and looking at businesses.  If we can learn how to view and analyze businesses with a business owner mindset, we will be better investors and better entrepreneurs.  

If it isn't obvious already, businesses are pretty important!  Not just for the sake of this class or for investing, but for all the ways we interact with them in our lives.  

Businesses are a big deal.  We buy from them, work for them, start them, and invest in them.  Without businesses, there wouldn't be much wealth, and the world would not be nearly as interesting! 

Now that you know a bit about who Warren Buffett is, let's discuss why he's worth studying and learning from in this next phase of our class together.  

Who is Warren Buffett??  I was hoping you'd ask that!  Let me tell you.  

As we transition between major investing topics, I'm answering a few important questions.  Is it clickbait, or do I actually answer the question of "how do I get rich"?? 

In this episode, we discuss the inflection point between being a net consumer and a net producer, what each means, and what you should focus on being right now.  

One of the marks of a great investor, in finance and in all areas of life, is the ability to manage trade-offs well.  Life is full of them, and we want to keep that in mind when making decisions with our limited investment resources.  

There are multiple ways to skin the cat of tracking and allocating your income and expenses.  In this episode, we talk about a few of those ways and the most important elements of budgeting.  

Debt can help you or hurt you.  It depends on how you use it.  In this discussion, we talk about the powerful tool of household debt. 

NOT spending all your money is hard, especially when it seems to have a mind of its own and just goes...places.  Let's talk about some ways to set you up for financial success with your spending and investing.  

There are spenders and there are savers...is one better or worse than the other?  I think it depends on how extreme it is.  

Do you want to know what the most important factor is that will determine whether you become wealthy or poor?  I sure do!  

Remember the net worth equation from Episode 014?  It makes a reappearance here as we dive deeper into personal finances and what makes a healthy financial household.  

In this episode we dive into the components of what makes up a household's finances: what comes in (income), what goes out (expenses), and what's left (cash flow).  

We will be digging into the world of personal finance (how to manage your own money) for the next few weeks, and in this episode we will discuss WHY! 

We discuss one very useful equation that we will use a lot going forward, both in our personal finance discussions and in our investment analysis discussions: the net worth equation (and the accounting equation...and the basic financial equation...which are all the same equation).  

Money moves in two directions: toward you or away from you.  You spend or you earn.  You buy or you sell.  You invest or you borrow.  So...spending, buying, and investing are all related.  So are earning, selling, and borrowing.  

Price can tell us a number of things IN THE CONTEXT of other information, but it doesn't tell us much by itself.  

Price and value are related, but they aren't the same thing, and they often don't match.  Let's talk about it. 

As a tie-in to episode 009 (Price), in this episode we discuss value: how it differs from price, how it's determined (spoiler: it's different for each person), and I make the case that you probably don't want most of the goods and services that are available, even if they were free! 

This talk covers price, how they are set (answer: supply & demand), why they might differ for similar products, and we talk through a market example of price setting.  

Even the best things aren't perfect.  If you're going to be an investor in the stock market, you have to learn to deal with its downsides (literally).  

There's a lot to love about the markets.  Let's talk about it. 

We use an analogy of buying the GOAT's world cup jersey to illustrate shared ownership and selling shares to the public.  For you soccer fans (and everyone else, too)! 

Today we talk about the stock market!  We discuss what the stock market is, what "stock" is, and how and why a company goes public.   

We discuss markets, what they are, why they exist, how they work, goods versus services, and some examples. 

There are only two fundamental ways to invest your money, and we talk about those in this episode! 

We answer a very important question to start off our investment class: what is investing?   Don't expect all of these to be so short ;) 

Welcome to Investment Class!  Here is an overview of what is to come and what to expect!