30 Aug 2024
Seven cures for a lean purse: Getting Rich
- Posted by Dejan Pekic BCom DipFP CFP GAICD
Berkshire Hathaway Inc. this week reached a valuation of US1 trillion dollars for investors.
A big congratulations to Warren Buffett and his co-PM (Portfolio Manager) the late Charlie Munger.
How was this done?
Well, in 1926 George S Clason first published a famous series of pamphlets on thrift and financial success using parables from ancient Babylonian clay tablets.
These pamphlets were latter incorporated into his book, The Richest Man in Babylon and the following seven cures for a lean purse are from that book.
- Start thy purse to fattening
- Control thy expenditures
- Make thy gold multiply
- Guard thy treasures from loss
- Make of thy dwelling a profitable investment
- Insure a future income
- Increase thy ability to earn
Buffett and Munger, even if they had not read the book would have definitely applied these seven cures as professional PM.
This is why talent, specifically having the right PM working for you is the key to achieving above index performance.
Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.
23 Aug 2024
Friday Tidbit
- Posted by Dejan Pekic BCom DipFP CFP GAICD
Vanguard have just published their Index Chart for asset class returns to 30 June 2024.
The outcome again confirms just how correct the value investing principles taught by Benjamin Graham are for creating wealth.
Owning a profitable business that sells goods and or services is the investors protection against inflation provided that the business remains profitable.
Click for chart.
This is why remaining invested according to your appetite for volatility is key and when the next panic takes hold, react by buying more quality assets at discounted prices.
Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.
15 Aug 2024
Market Cycles: Bull vs Bear
- Posted by Dejan Pekic BCom DipFP CFP GAICD
A bear market is defined as a crash in asset prices from recent peak of 20% or more.
Technically then the Australian All Ordinaries index is still currently in a bull market since COVID-19 which was back in March 2020.
Click All Ordinaries.
However, the United States S&P 500 index has only been in a bull market since the Russian invasion of Ukraine which was in February 2022.
Click S&P500.
The numbers tell a simple story, you cannot avoid bear markets if you are investment in growth assets such as listed businesses. The reason for investing in growth assets is to beat inflation.
The other extremely important message is that bull markets are always bigger and last longer than bear markets.
If you then put add these bull and bear markets together over multiple decades you can see that the benefits of long term compounding outweigh the irregularly occurring asset price crashes.
Click 30 year index performance.
In the words of Benjamin Graham…’the essence of investment management is the management of risks, not the management of returns’… which is why remaining invested according to your appetite for volatility is key and when panic does take hold during a bear market, react by buying more quality assets at discounted prices.
Our business is based on referrals, so if you have family, friends or colleagues that want advice please ask them to contact us.
