Season 1, Episode 1
Get Rich Slowly
Welcome to our new value investing podcast.
My mate Tony is a very successful private investor. For the last 25 years, his share portfolio has, on average, doubled the performance of the stock market, every year. On this first episode, Tony tells me his story – how he went from growing up poor in Brisbane, to starting his investment portfolio, losing half of it in the first year, working out the kinks, to becoming very, very good at it and getting rich – slowly.
In future episodes, he’s going to teach me his checklist-based system for value investing. If you’re not familiar with that concept, it’s how guys like Warren Buffett invest. Value investing is basically the idea of finding high quality companies with a strong track record of generating lots of cash, but whose share price is for some reason currently undervalued. You buy those stocks and wait for the market to catch up.
On this episode we talk about why we are not trying to compete with APT investors; Tony’s recent stock buys and analysis; how he uses his “watch list” and why we’ve changed its name to the “buy list”; we we’re still manually calculating the price-to-cash ratio instead of using Stock Doctor’s figure; improved wording on how to draw a three point trend SELL line; and why sometimes a stock with great numbers might have a falling knife.
Tony’s stock broker of 25+ years, Alex Hay, a partner at broking firm EL&C Baillieu, joins us again today to talk about the different kinds of buy & sell orders and how to use them. Outside of that, Tony and I also talk about our dummy portfolio, which made it back into the black, and some excel formula errors we’ve picked up recently in the checklist.