81 - Always Ask Why: Bond Returns, Greater Fool Theory, and the 5 Why Framework
Release Date: 06/28/2020
137 - Expand Your Time Horizon
The DIY Investing Podcast
Want Investing Research Directly to your Inbox? Sign-up for my Free Substack: Mental Models discussed in this podcast: Delayed Gratification Time Horizon Personal Responsbility Compounding
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136 - Selling Stocks for Value Investors (Part 1: Strategy Matters)
The DIY Investing Podcast
Want Investing Research Directly to your Inbox? Sign-up for my Free Substack: Mental Models discussed in this podcast: Second-Order Effects Mean Reversion Factor Investing Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. Follow me on Twitter and YouTube Twitter Handle: YouTube Channel: Show Outline Selling Series A lot of time is spent on buying stocks. Yet, almost just as important, if not more is knowing when to...
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135 - Investing in the Face of Uncertainty
The DIY Investing Podcast
Want Investing Research Directly to your Inbox? Sign-up for my Free Substack: Mental Models discussed in this podcast: Second-Order Effects Mean Reversion Factor Investing Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. Follow me on Twitter and YouTube Twitter Handle: YouTube Channel: Show Outline Today’s podcast will focus on a single precept: You can’t predict the future First and Second Order Effects ...
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134 - Dollar Cost Averaging into Individual Stocks
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Want Investing Research Directly to your Inbox? Sign-up for my Free Substack: Mental Models discussed in this podcast: Look-Through Earnings Dollar Cost Averaging Earnings Yield Opportunity Cost Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. Follow me on Twitter and YouTube Twitter Handle: YouTube Channel:
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133 - How to Solve the Dead Money Problem?
The DIY Investing Podcast
Mental Models discussed in this podcast: Dead Money Opportunity Cost Time is Money Intrinsic Value Compounding Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. Follow me on Twitter and YouTube Twitter Handle: YouTube Channel: Show Outline The Dead Money Problem and Solution “If you remember only one thing today: Time is Money” What is Dead Money? Any asset you own that is not growing intrinsic value...
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132 - Is it better to pay management fees or performance fees?
The DIY Investing Podcast
Mental Models discussed in this podcast: Incentives Skin-in-the-Game Accredited vs non-Accredited Investors Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. Follow me on Twitter and YouTube Twitter Handle: YouTube Channel: Show Outline Key Concepts for thinking about compensating a Portfolio Manager Management Fees Management Fees are priced a percentage of the assets under management. A 1% management...
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131 - How to choose an Investment Manager?
The DIY Investing Podcast
Mental Models discussed in this podcast: Opportunity Cost Alpha Superpower of Incentives Competitive Advantages Process vs Results Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. Follow me on Twitter and YouTube Twitter Handle: YouTube Channel: Show Outline Key Concepts for selecting a Portfolio Manager Choosing an investment manager is a lot like choosing a stock Don’t invest in anything you don’t understand...
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130 - How to invest during a crisis?
The DIY Investing Podcast
Mental Models discussed in this podcast: Stress Testing Time Horizon Stoicism Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. Follow me on Twitter and YouTube Twitter Handle: YouTube Channel: Show Outline The full show notes for this episode are available at Key Concepts for Investing during a Crisis Stress Testing - Bankruptcy Risk? Goal: Survive Stress test businesses not stocks Focus on Fundamentals ...
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129 - What is the role of a Catalyst in Value Investing?
The DIY Investing Podcast
Mental Models discussed in this podcast: Catalyst Activation Energy Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. Follow me on Twitter and YouTube Twitter Handle: YouTube Channel: Support the Podcast on Patreon This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at . Show Outline...
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128 - Key Investing Ratios: P/E, P/S, ROA, ROE, Gross Margin
The DIY Investing Podcast
Mental Models discussed in this podcast: Investing Ratios Break Points Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience. Follow me on Twitter and YouTube Twitter Handle: YouTube Channel: Support the Podcast on Patreon This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at . Show...
info_outlineMental Models discussed in this podcast:
- Discount Rate
- Greater Fool Theory
- Circle of Competence
- 5-Why Framework
Please review and rate the podcast
If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.
Follow me on Twitter and YouTube
Twitter Handle: @TreyHenninger
YouTube Channel: DIY Investing
Support the Podcast on Patreon
This is a podcast supported by listeners like you. If you’d like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron.
You can find out more information by listening to episode 11 of this podcast.
Show Outline
The full show notes for this episode are available at https://www.diyinvesting.org/Episode81
Bond Returns
In the aggregate, bond returns cannot exceed the coupon rate of the bond. Your interest rate earned sets the maximum expected rate of return on that investment. Any potential for gains above this threshold is purely speculative in nature.
Greater Fool Theory
- In today's bond bubble, the only way to justify purchasing bonds in a portfolio is a dependence on the greater fool theory.
- If you want or expect high returns from your bonds, then you hope that others are foolish enough to buy them from you before they mature.
Circle of Competence
Your circle of competence is probably smaller than you think.
5-Why Framework
This framework is used in the industry to evaluate failures for a root cause analysis. Basically, don't stop with understanding a problem after only asking "Why?" once. You need to dig deeper. Ask "Why?" five times, to reach down to deeper levels of explanation.
Find the root cause of a problem, not simply the surface contributing causes.
Summary:
Investors should always ask why when evaluating investments. This includes understanding the underlying reasons for their investing strategy, why they earn an excess return, and the edge of their circle of competence.