The digital age, with all of its monopolies and consolidation across various markets, has also seen a rise in innovation and small companies seeing success by having unprecedented access to consumers through new channels of commerce and communication. With market stability and consumer confidence taking hits in recent years, small luxuries like makeup continue to do well despite the struggles of luxury brands in general.  With the success of some niche brands in this highly competitive and specialized sector of cosmetics, what does the weather look like for some of the more established players in the makeup industry? This week, Phil and Danielle wrap up their discussion about the beauty industry and the way that boutique brands might affect the bottom line for the big names in cosmetic products. If you want a huge clue as to whether or not you’re looking into a business that will deliver predictably strong returns, don’t miss out on your free copy of The Big 5 Numbers Guide:  https://bit.ly/3psMESQ Topics Discussed: ETFs Augustinus Bader Victoria Beckham Beauty Ulta Sephora Kering LVMH D2C vs retail Cosmetic science Resources Discussed: Lisa Eldridge Learn more about your ad choices. Visit megaphone.fm/adchoices

How important is investing to the economy at large? While companies don’t see a direct increase on their bottom line from the secondary market, it can be very important in helping to determine the value of a business and the drive interest in the primary market. For value investors, having a strong understanding of a business’s weather, i.e. their moat, competitive advantage, and other factors that determine their long-term success, is paramount to generating returns on a multi-year timeline. From the Rule #1 perspective, that’s the key difference between investing and simply gambling on the market. After a few weeks’ break on the subject, Phil and Danielle return with part 1 of an extra long 2-part episode breaking down the weather of the makeup industry giant Ulta, and share some of their insights into their own weather analysis of their history with this business.  For help identifying the durable advantage of a company you’re looking to invest in, click here for your free copy of The 5 Moats Investment Guide: https://bit.ly/3Kmb33J Topics Discussed: Primary market vs Secondary market CFO CEOs Ulta Augustinus Bader Victoria Beckham Beauty Learn more about your ad choices. Visit megaphone.fm/adchoices

A crystal ball would be the ultimate tool for any investor, but given that we’re not living in a fantasy world, how do top investors prepare for an uncertain future? With the inevitability of market downturns, finding a balance between generating returns and being ready to strike when the iron is hot can be a tricky position to navigate.  Discovering that equilibrium, along with the patience to hold on through the ups and downs once you’ve bought into a great company, can be what makes or breaks a portfolio in the long run. On this week’s episode, the deep analysis of the 2023 Berkshire Hathaway shareholder letter continues as Phil and Danielle wring every ounce of wisdom from Buffett’s annual communiqué.. For help with future-proofing your portfolio, click here for a free copy of The Ultimate Stock Market Crash Survival Guide:  https://bit.ly/3xNXFlf Topics Discussed: Munger’s influence on Buffett’s philosophy Investing in the information age Mutual funds vs ETFs Modern market volatility Forgoing returns to prepare for downturns Resources Discussed: Berkshire Hathaway shareholder letter Wilshire GDP ratio Learn more about your ad choices. Visit megaphone.fm/adchoices

Here’s a scenario: you’ve identified a potential investment, you’ve gone through the checklist and done your research, and you decide that you’ve found a deal that other people seem to be overlooking.  You pull the trigger to buy into this company, and then the stock price begins to decline and you begin to wonder if you’ve made a mistake. Knowing the difference between having confidence in your investing process and being arrogant or blindly confident in a position can allow investors to act on proven strategy as opposed to being driven by fear and emotion.  Having a long-term outlook and a diligent methodology is the way for capable value investors to find the deals and realize the returns that many others in the market get wrong. This week, Phil and Danielle tackle another constant issue for investors as they dig into when, how, and why you should (or shouldn’t) stick with a purchase that doesn’t seem to be panning out the way you’d suspected. For help finding businesses that you feel confident investing in, click here for the “3 Circles” Exercise Guide:  https://bit.ly/3LOexg2 Topics Discussed: Patience and discipline in value investing The dangers of hubris and confirmation bias Informed assumptions vs speculation Resources Discussed: Berkshire Hathaway shareholder letter (2013) Learn more about your ad choices. Visit megaphone.fm/adchoices

Free cash flow can be a golden ticket in the hands of a company with the right leadership. They can use it to supercharge innovation, expand their reach, or reward shareholders with dividends or buybacks, and for value investors, it’s like spotting a diamond in the rough. After the growth and maintenance expenditures are accounted for, the way a company deploys its additional capital can signal the strength of management and the potential for future returns. As Buffett tells us in his recent letter, once you’ve got companies that check all of the boxes he’s looking for, this is the icing on the cake. Join Phil and Danielle as they continue their analysis of this year’s shareholder letter from Berkshire Hathaway, pulling out key takeaways that might’ve been overlooked by some readers. For help in crunching the numbers in your investment research process, click here to get your free Rule #1 Calculators for Investing Analysis: https://bit.ly/42dBHSn Topics Discussed: Individual values in investing Entrepreneurship See’s Candy Operating cash flow Growth/maintenance capital expenditure Rare companies Resources Discussed: Berkshire Hathaway shareholder letter Learn more about your ad choices. Visit megaphone.fm/adchoices

As detailed in the most recent edition of Berkshire Hathaway’s annual shareholder letter, finding success in value investing doesn’t require fancy credentials, obsessive research, or exploitative scheming — it takes common sense and the willingness to keep yourself informed about your investments. In a world full of people rabidly vying for your attention in every imaginable arena, knowing how to focus that attention on what’s important while weeding out the noise of the pundits and snake oil salesmen is what separates successful investors from the rest of the pack. In this week’s show, Phil and Danielle get a bit more granular on the most recent Berkshire Hathaway shareholder letter and discuss what separates Bertie Buffett from her competition. To get the inside scoop on more ways industry leaders mislead investors, click here for your free copy of The 3 Greatest Stock Market Myths Ever Told: https://bit.ly/45NycoE Topics Discussed: Flashy and half-baked or simple and flawless Simplifying the research process Snowboarding lessons for investing Typical CEO letters Punditry vs information Resources Discussed: Berkshire Hathaway shareholder letter Learn more about your ad choices. Visit megaphone.fm/adchoices

“Character reveals itself in adversity” is a saying that can not only apply to the human race and how our true nature shines through when faced with a challenge, but also one that can apply in the business world. Although brand loyalty can be a common trope in 21st century consumer culture, how does that sentiment hold up when the rubber meets the road? In these times of inflation, shrinkflation, and other types of -ations that we’ve yet to ascribe catchy names to, some brands are seeing once-loyal customers jump ship and look for better value as prices rise. While some brand relationships can’t stand the test of time, perhaps we can look to the long-lasting friendship and business partnership of Warren Buffett and Charlie Munger for inspiration. In this week’s episode, Phil and Danielle are back to talking from different continents (and dealing with the inherent technological mishaps of that setupt) as they discuss what constitutes a brand moat, and how strong that supposed moat can be in moments of economic instability. Think you know Warren Buffett as well as the people who’ve spent decades building Berkshire Hathaway with him? Take our Buffett quiz and find out for yourself: https://bit.ly/43qtOLz Topics Discussed: Jackson Hole, WY Heliskiing/snowboarding Unilever dumps Ben & Jerry’s Brand moats Buffett and Munger’s friendship Resources Discussed: Cambridge Long COVID study Berkshire Hathaway shareholder letter Learn more about your ad choices. Visit megaphone.fm/adchoices

In a vault episode from the early days of the podcast, explore the world of value investing in this as Phil and Danielle delve into the power of dividends. Discover how making well-researched, long-term investments can potentially amplify returns and provide a steady income stream. They discuss the strategy of reducing risk by 'getting your money off the table' through dividend-producing companies. But remember, while dividends offer stability and returns, they're not without their tradeoffs. We'll uncover the complexities of managing dividend-paying companies and navigating potential risks. Tune in to learn how to strike the balance between steady returns and prudent risk management in your value investment journey. Keep in mind the Rule #1 that’s the namesake of Phil’s company: “don’t lose money.” Click here for a deeper examination of that rule that’s helped so many value investors over the years: https://bit.ly/43jTNEr Topics Discussed: Weather Matrix Ben Graham’s Margin of Safety RULERS Compound return Free cash flow (FCF) Maintenance capex Resources Discussed: Berkshire Hathaway shareholder letter Email us your questions! Learn more about your ad choices. Visit megaphone.fm/adchoices

"Invert, always invert" — Charlie Munger To become a top-notch Rule #1 investor, having a well-defined investing strategy is essential. It starts with crafting a compelling narrative for the company you're eyeing and understanding why it's a stellar investment. But here's the twist: flip that narrative on its head and scrutinize the opposing viewpoint. Challenge yourself to construct a case against the investment. If you can't, it's a sign that you might lack comprehensive knowledge about the company. When applying inversions to business acquisitions, consider formulating a robust inversion for every reason supporting the purchase. Familiarize yourself with every argument against buying the company, surpassing even the short sellers' insights. Develop compelling rebuttals for each inversion, effectively nullifying them and proving the short sellers wrong! Join Phil & Danielle in this throwback episode as they delve into the significance of inversion and highlight four essential aspects to contemplate when integrating it into your investing strategy. Click here for your copy of The Four Ms for Successful Investing: https://bit.ly/3LhVUAR Topics Discussed: How to create a story Why you should always invert How to invert to own a business Four key points of inversions Relating to Chipotle and Gamestop Learn more about your ad choices. Visit megaphone.fm/adchoices

In the practice of value investing, just like with so many other things in life, knowing when to wait patiently or when to jump ship is critical to the long-term success of your portfolio. Being able to stomach market fluctuations isn’t something that everyone is capable of, but the mindset of buying into a business with long-term goals of generating cash flow means buying with the confidence that you’ll be able to weather the storms that may, and often do, come your way. As the series on the Weather Matrix continues, Phil and Danielle discuss the importance of being in the “high understanding” quadrant of this tool as you consider potential investments and how that position makes it easier for you to decide what to buy and what to reject. For a leg up on practices for generating consistent returns, click here for your free copy of How to Pick Stocks: The 5-Step Checklist: https://bit.ly/3ros8mU Topics Discussed: The power of compounding Vanderbilts vs Rockefellers Owner earnings Investments vs speculation Inverting Durable competitive advantage Pitch decks Resources Discussed: David Einhorn’s pitch decks Learn more about your ad choices. Visit megaphone.fm/adchoices