My goal for these blog posts is to provide useful information so that you can make more accurate decisions.
- Noise includes facts/data/news that cannot be processed into useful information (<— WHAT MOST STUFF IS)
- Useful information can be used to make more accurate decisions (<— WHAT I’M TRYING TO PROVIDE)
Since there is an endless and ever-growing amount of things to learn, I hope that these posts are helpful in summarizing important topics related to investing.
Here are three of my most recent learnings from the content I’ve been consuming (books, podcasts, articles, newsletters, company call/presentation transcripts).
#1
Quote: “Most global markets can also be viewed within two time horizons differentiated by World War 2, which decimated many European and Pacific economies while catapulting the US into what it is today. And during the post-war era there has been just one legitimate debt deflation (2008/9) and just three legitimate inflation scares (1945–1952, 1970–1980 and 2021–2024). The point is these datasets are all very thin. They need to be treated with a certain degree of rational skepticism.” — Cullen Roche
Long-term investing requires a heavy dose of humility, especially since clean historical data on which to base decisions is truly quite limited. In order to be successful, we must work to strike the right balance between remembering what has happened in the past while remaining open-minded to how/why the present and future might be different.
#2
Quote: “In 2014, I asked Irving Kahn to share the most important lessons of his extraordinarily long career. By then, he was 108 years old and had worked on Wall Street since 1928… Kahn became [Benjamin] Graham’s teaching assistant at Columbia in the 1920s, and they remained friends for decades… Kahn’s answer: ‘Investing is about preserving more than anything. That must be your first thought, not looking for large gains. If you achieve only reasonable returns and suffer minimal losses, you will become a wealthy man and will surpass any gambler friends you may have. This is also a good way to cure your sleeping problems.'” — William Green
I always try to listen when experts with over 80 years of experience are talking. Mr. Kahn’s conservative approach aligns well with Birchwood’s style of investing (i.e. diversified index funds with a focus on long-term performance). Also, since moving away from the hedge fund world, I can personally attest that this approach does indeed lead to much better sleep. As a side note, I thought this was one of the best investing books I’ve ever read.
#3
Quote: “The intensely competitive investment world inevitably punishes casual attempts to beat the market, leading the rational resource-constrained investor to employ a manageable set of low-cost passive alternatives.” — David Swensen
David Swensen, the architect of the “Yale Model,” offered a surprising insight in his (justifiably) popular book: he recommends a passive investment strategy for anyone without significant resources (e.g., large firms with budgets in the billions). As we discussed on our recent podcast, most individual investors underestimate the level of sophistication they are up against when it comes to trying to pick stocks.
