They call him the Dean of Valuation. 

Professor Aswath Damodaran can tell you what a company is worth.

He also calls himself a value investor, but here comes something surprising:

He doesn’t believe that value investors can beat the index.

For nearly 40 years as a professor at Stern Business School at NYU, Professor Aswath Damodaran has dedicated his life to teaching something he doesn’t think works. At least not in investing.

How does that make sense?

I defied storm warnings and floods to travel inland in Portugal to the medieval town of Tomar to attend a three-day course with Aswath Damodaran.

He teaches discounted cash flow, beta and risk premiums with surgical precision.

Spreadsheets. Discount rates. Decimals.

But why spend time on all that and plug it into spreadsheets if it doesn’t work?

It can, of course, be useful if you’re selling your company.

But I’m not. I’m here as an investor, and now he’s saying…wait what? 

Aswath Damodaran’s Surprise Over Dessert

I’m seated next to the professor at the introductory dinner on the first evening.

Most of the dinner is spent on polite small talk about different food cultures around the world.

From smørrebrød in Denmark to famous cod dishes in Portugal.

When dessert arrives, he drops the bomb.

“Active investors can’t beat index funds.”

Excuse me, what?

I nearly choked on the pickled fruit with cream.

We’re here to learn how to value companies so we can beat index funds. 

It’s depressing if I’ve traveled all the way to Tomar and defied storms and floods for nothing.

Am I going to sit through two days of spreadsheet talk for nothing?

I play all value investors’ trump card:

“What about Warren Buffett? He achieved extraordinary returns with the original partnership.”

For those who don’t know: From 1956 to 1969, Warren Buffett delivered an average annual return of 29.5 percent.

That’s far above the index.

The history books say so.

It’s a fact.

But he shot that down right away.

“Buffett only did better than index funds because he didn’t charge a fee,” the professor replied.

He answers with a smile. I think he enjoys teasing.

In Buffett’s original partnership, he had a compensation structure of zero in management fee. He received one quarter of the returns above 6 percent.

It’s the same way I’m compensated in Grünbaum Value Invest.

The model is often referred to as 0-6-25, and very few operate with that structure.

Most hedge funds charge 2 percent of the entire invested amount in both good and bad times. And 20 percent of the returns. 

Does Professor Aswath Damodaran invest in index funds himself?

No, he actually does invests in publicly traded companies.

Why?

“Because I think it’s fun.”

Does he beat the index? Maybe. Well, get back to that. But here is the story of how he invests. 

Here’s that story.

1. Tell a Story

One of his more uncomfortable observations, besides the one above:

We have more data than ever before.

Yet people have become worse at valuing a company.

Why?

They sit in spreadsheets adjusting decimals.

They discuss beta down to the third decimal.

They change the discount rate from 8.7 percent to 8.9 percent and feel precise.

But they can’t clearly explain:

How does the company make money?
Why will it still be relevant in 10 years?
What assumptions have to hold for this to work?

Valuation isn’t precision.

It’s structured storytelling.

You start with a story.

Then you translate it into numbers.

Not the other way around.

2. Focus on Cash Flow

At the same time, you can’t rely only on the story. 

You need to focus on earnings and cash flow.

In the investing space, there are always themes. Buzzwords.

Something that sounds good. Corporate governance. Environmental. Equality. Zero emissions. Future-proof.

You can fall completely in love with your own story about a company, especially if you top it with some buzzwords.

Aswath Damodaran’s filter for buzzwords and bullshit is simple:

Does it change the expected cash flows?

If not, it doesn’t change the intrinsic value.

That doesn’t make the topic socially irrelevant.

It just means valuation is narrower than the public debate.

3. Don’t Trust Management

Management’s forecasts are biased.

He’s very clear on that point.

Don’t blindly trust management’s growth expectations.

They have an incentive to be optimistic.

4. Be Careful With Banks, Debt, And Cyclicals

There are some categories he’s significantly more cautious about.

Banks are one of them.

Not because banks can’t be good businesses.

But the risk is difficult to assess.

To be able to value a bank, two assumptions have to hold:

That sensible people are running it.
And that regulation works.

“2008 broke my trust in both dimensions.”

He also warned against shrinking companies with high debt.

Not high debt alone.
Not declining revenue alone.

But the combination.

He called it “a crash in waiting.”

And that’s exactly how he sees it.

Cyclical companies also require extra humility.

They’re often tied to oil prices or other external factors that fluctuate wildly.

That makes them difficult to assess.

When earnings are driven by something outside the company’s control, your story becomes more fragile.

5. Remember: You’ll Be Wrong

Aswath Damodaran reminds us that we can be wrong in both the story and the valuation.

It’s usually not the end of the world, because you can achieve good returns even if you’re not completely right.

“I don’t need to be right to make money. I just need to make fewer mistakes than everyone else,” he said.

That’s a very different ambition.

Not genius.
Not perfection.

Relative rationality.

It’s about protecting your wealth.

6. He Invests in “What Can Be”

Aswath Damodaran invests in technology companies like Nvidia.

Warren Buffett historically didn’t.

Buffett’s philosophy was built around stable, mature companies with predictable earnings.

Coca-Cola, insurance companies, chocolate, running shoes.

That philosophy works.

But it rarely takes you into young technology companies, where earnings are uncertain, and the track record is short.

Damodaran pointed out that if you only invest in what’s already solid and stable, you end up concentrated in one part of companies’ life cycle.

And the economy doesn’t always reward the same part of the life cycle.

You shouldn’t only invest in what is.

You also have to be able to invest in what could become.

That requires valuing potential.

Not just the present.

It requires that you accept greater uncertainty, but in a controlled way.

That doesn’t mean you should buy hype.

It means growth also has value.

If the price is right, and the story holds.

7. No Stock Dominates

He never enters a new stock with more than 5 percent of the portfolio.

Not even if he feels a strong conviction.

And if a stock grows to more than 15 percent of the portfolio, he starts trimming.

Sometimes he’s let it run to 15 percent. But after that, he takes the top off.

For example, he’s sold half of his Nvidia position over the past few years.

Has he left money on the table? Yes.

Does he regret it? No.

His starting point isn’t to maximize the return on the individual stock.

It’s to protect the portfolio.

His wording was clear: “Don’t do anything that can threaten your lifestyle.”

When one stock takes up too much space, it’s no longer just an investment choice.

It’s a lifestyle risk.

He isn’t trying to be brilliant.

He’s trying to survive his mistakes.

8. Too Much Activity Can Kill Your Return

He warns against following CNBC and all the other news media too closely.

It creates noise, can make you nervous and make you trade too much in the stock market.

He says it quite directly:

The more active an investor is, the lower the return becomes.

Both for private and professional investors.

He only buys a few stocks a year.
Sells a few.

He has around 40 active positions.
He doesn’t check the market daily.

Investing fills his theoretical work as a professor, but the market doesn’t fill his everyday life.

And that’s intentional.

9. Companies Have to Earn Their Place

A stock doesn’t just enter his portfolio and stay there.

It has to re-earn its right to stay.

He reviews every single stock at least once a year. Some more often.

Not only because the price has moved.

But because the story may have changed.

If the assumptions no longer hold, the stock has to go.

If the price has run too far ahead of the value, he has to sell.

Buying is only half the job.

The hard part is reassessing honestly.

He says you can’t call yourself a value investor, and at the same time say you “buy and forget.”

Value investing and valuation go both ways: at purchase and at sale.

If you bought because something was undervalued, you also have to be willing to sell when it’s no longer undervalued.

A stock doesn’t have lifelong membership in his portfolio, like it often has with Warren Buffett.

10. The Goal Isn’t to Get Rich

His goal with investing is to preserve and increase his wealth.

Not to get rich.

Not to beat the market.

And that explains a lot.

It explains the 5 percent rule.

It explains why he trims at 15.

It may also explain why he doesn’t necessarily beat the index.

He himself said in an interview that it isn’t about maximum upside.

It’s about survival.

If you start with the wrong goal, he said, it distorts all your decisions.

If the goal is to get rich quickly, you take different risks.

If the goal is to beat the index at any cost, you start to overreact.

His approach is more sober.

He says that 55 percent of his stocks beat the index.

That means 45 percent don’t.

He’s okay with that.

“I invest because I like the process.”

He’s satisfied performing in line with the index.

Two Words: Concentrated Value

Beating the index is simply icing on the cake for Aswath Damodaran.

My mandate is different. 

My goal is to beat the index.

My goal is to build real wealth.

That sometimes requires concentration, conviction, and the willingness to be different.

Not for entertainment. For performance.

I once asked a billionaire how to get there.

He said: “Two words: Concentrated Value.”

I never forgot that. 

If you want to learn more about beating the index, remember to download my e-book here. 

Warren Buffett dropped a bombshell as he wrapped up the annual meeting of his company, Berkshire Hathaway.

He is stepping down as CEO of Berkshire Hathaway.

Why?

The Oracle of Omaha is retiring in 2025.

The man is 94 years old. No one lives forever.

For several years, he has given his successor, Greg Abel, more space and speaking time.

It’s best for everyone – shareholders, employees, and family – if it’s a controlled transition of power, not a shift after a death.

It was sudden, yet entirely expected.

And whatever the case: it’s sad.

Warren Buffett 2025 became a farewell

Warren Buffett has been our church.

The place we went to strengthen our faith in value investing.

Every year, he tells us about investing long-term and calmly.

About having patience.

About being a good person.

About doing the right thing, following our inner compass, surrounding ourselves with good people, and protecting our reputation and legacy.

Thousands of people fly to Omaha every year to hear him speak.

Or perhaps we should say: flew.

Maybe we should say it in the past tense.

Will he be there next year? At the big annual meeting in Omaha?

We don’t know yet. But probably not.

Will Greg Abel be just as wise and charming?

Well…He’s not Elvis.

No one can replace Warren Buffett. It’s the hired gun versus the entrepreneur and visionary.

This year’s meeting was the last as we know it.

Warren Buffett 2025 became the last investing class with the legend.

But wait, it’s not all over yet.

Let’s go through what Warren Buffett said this year.

Here are the five most important points from Warren Buffett 2025:

1. “Trade Should Not Be a Weapon”

It’s a bad idea to engage in a psychological trade war with nations that have nuclear weapons, some of which do not have a particularly stable leadershipo.

North Korea has nuclear weapons, and it’s hard to put the genie back in the bottle.

“We have a guy in North Korea, and if you criticize his haircut… who knows what he might do. Why should North Korea have nuclear weapons? I mean…it can’t be good thing, but they’re not going away.”

He pointed out that the U.S. has already won. A long time ago.

“We have become an incredibly important country starting from nothing 250 years ago.”

He says, it’s foolish to use trade as a kind of weapon for revenge. It would be better to build more prosperity for all nations.

“The more prosperity in the world, the safer it will feel. Our children will feel that too.”

He explains that it’s a bad strategy when a country with 300 million people (the U.S.) pushes against the world’s 7.5 billion people with a vengeful and defiant attitude.

“It’s wrong, and it’s unwise.”

2. This is Not a Crash

He brushed the current volatility in the stock market off like an ant you swat away from your hand.

“It’s not a huge move,” he said. “This har not been a dramatic bear market or anything of the sort.”

Warren Buffett has experienced much, much worse.

He explained that the stock value of Berkshire Hathaway has fallen more than 50 percent three times in history, in a very short period of time.

And it wouldn’t bother him if it happened again.

He went back to 1929 to explain that the Dow Jones fell almost 89%.

“if it makes a difference to you whether your stocks are down 15% or not, you need to get a somewhat different investment philosophy because the world is not going to adapt to you, you’re going to have to adapt to the world,” he said.

Choose Friends Who Are Better Than You

There is always a young Chinese person who stands up at the meeting and asks for career or life advice.
This year’s meeting did not disappoint.

Buffett’s followers are still hungry for common advice on how to live life.

Buffett’s best advice is to surround yourself with the right people.

People who lift you up.

Whether it’s choosing colleagues, a boss, or just friends.

It will lift both your life and career.

“You should choose friends who are better than you, because you will move in their direction.”

It’s pretty much the same thing he says every year.

But every year it hits me. It’s so simple. It’s so true.

To this advice, we can add the late Charlie Munger’s advice to actually FOLLOW the advice you’re given.

As Charlie Munger would have said: Most people nod and think it sounds reasonable, but then they do what they usually do.

Are you listening this time?

Really listening?

Because this will probably be the last time Warren Buffett tells you. 

Be Grateful Despite Setbacks

Another Chinese stockholder asked Warren Buffett how he has handled life’s setbacks.

“Charlie had setbacks, I’ve had setbacks. It’s part of life.”

Warren Buffett lost his first wife many years ago. She had cancer in her vocal cords.

As a young man Charlie Munger lost his 9-year-old son Teddy to leukemia.

Munger was also getting a divorce during that period, and lost his house, his savings, and custody of his two other children from the first marriage. 

He later shared how he walked the streets crying after the hospital visits. 

But. There’s an important “but.”

Charlie Munger continued. Didn’t give up. 

He remarried and had four children with his second wife.

He became friends with Warren Buffett, started investing in stocks, and became incredibly wealthy and a great inspiration to millions.

As he later said: Never add a tragedy to a tragedy.

Warren Buffett spoke directly to the Chinese person from Shanghai who asked for advice on getting over a “setback.”

He pointed out that he had traveled many miles to come to Omaha. From Shanghai to Omaha.
So something must be working out for him.

His health is probably okay.

And historically, a little humility and gratitude for being born now and not 100 or 500 years ago.

“If I came from the 20th generation of shepherds, I’d be bored watching sheep all day.”

He explains that you can get some bad bricks and still build a good life. As he says: We all get a bad brick every now and then. We build anyway. With gratitude.

“Look on the bright side: You’re lucky to be here today. You’re healthy. You’ve come a long way, and you have the chance to learn about something that interests you. Compare that with the life you would have been offered a couple of hundred years ago,” he said. 

5. First Thing First: Look at the Balance Sheet

Warren Buffett sprinkles out nuggets of really valuable advice on how to approach investing in stocks.

New for me was his thoughts on the balance sheet.

He explained that he places more weight on the balance sheet than on other parts of the financial statements.

The balance sheet is where the company tallies its assets and liabilities.

In other words, he focuses more on the assets than on the immediate revenues and expenses.

“I like to look at the balance sheets over an 8 or 10-year period before I even look at the income statement. Because there are certain things that’s harder to hide or play games with on the balance sheet than you can with the income statement,” he said. 

What Happens Now?

At the turn of the year, Greg Abel will take over as CEO of Berkshire Hathaway.

Warren Buffett has assured that he will not sell a single Berkshire stock.

He also says that he would like to remain involved and help the board as an advisor. After all, he is still a very large shareholder in Berkshire Hathaway.

“There might be a time when I’d be helpful, but Greg would have the tickets.”

Warren Buffett 2025 will probably be the last we hear from him.

It’s probably the last brick he’ll lay in his legacy.

If you’d like to stream the annual meeting, you can watch it here. 

How do you know if the price of the stock is reasonable? If you want to learn how Warren Buffett calculates the value of companies, you are welcome to download my free e-book here.

Don’t fall for the usual stock market platitudes. Here are 10 phrases that legendary investor Peter Lynch warns you against.

All roads lead to Rome. Or do they? No, they don’t.

There are so many sayings that we use to make snap decisions, but when you really think about them, they’re a load of crap.

This is true in life – and it applies to stock market investing.

While it might be fun to throw around a few comments at a family party, be careful what you say about investments. Sometimes these crazy little phrases become our truth. Sometimes we end up buying or selling because of some stupid words… and ruin our financial future.

Peter Lynch’s Points Are Evergreens

In 1997, legendary investor Peter Lynch – former portfolio manager of the Fidelity Magellan Fund – gave a speech on this very topic.

Okay, yes, granted, Peter Lynch stopped working as a money manager over 30 years ago (he was active from 1977 to 1990), and his speech is from 1997. It’s been a while.

Yawn? No. Please wait.

The takeaways from his talk are evergreen. They still hold true to this day. Don’t think so? Give it a read and see if you recognize these sayings.

By the way, did I mention that Peter Lynch got an average annual return of 29.2%? Now that is extraordinary.

Peter Lynch invested as a value investor (he carefully looked at companies and bought them when they had fallen below their intrinsic value), but he called his strategy “story investing.” Story investing means that he built a thorough thesis about the company and its future growth, and he called this thesis “a story.”

You Must Know What You Are Investing In

As an introduction to his speech, Peter Lynch explains that it’s important that you know what you are investing in.

You must really know the company, understand the product and read the annual report.

Too many private investors buy shares in something without knowing what they are making money on… or if they even make any money.

He also says to stop trying to predict recessions and stock market movements. You are better off focusing on understanding the businesses.

Okay, enough intro. What are some of the platitudes and phrases that he warns against?

1. “The stock has gone down so much, it can’t go any lower.”

Oh, yes it can drop more. It always can (unless it has reached 0).

This attitude is especially dangerous when you combine it with buying shares in something that you have not studied.

He uses the example of Polaroid (yes, it was a publicly traded company once and not just a peculiar retro camera), whose share price fell from 140 to 107 USD per share. According to Peter Lynch, people at the time said, “just load up the truck if it hits 100, because it couldn’t possibly fall any more.”

Yes, it sounds funny today, 30 years later, because we all know that new technology trampled the company to pieces.

Back then, the company’s stock fell to $18 in just nine months. In 2001 they went bankrupt.

2. The stock is this high already – it can’t possibly get any higher.”

But yes, it can rise more – and the market can be irrational longer than you can be solvent, as a wise man once said.

Peter Lynch uses tobacco company Philip Morris as an example. The stock increased fivefold in ten years, going from 12 cents in 1951 to 61 cents in 1961.

“It can’t rise any higher,” people said.

But it did, and it turned into a hundred bagger anyway, meaning it went up 100 times.

3. “Eventually, they always come back around.”

No, not everything will bounce back to its old peak.

The idea that “the stock market always goes up in the long term” and that you can therefore buy shares in anything and expect it to go up eventually is nonsense.

Peter Lynch uses RCA and Western Union as examples.

You could also take a lot of examples from the IT bubble, but it only burst two years after his speech.

Maybe in a few decades, we’ll be looking at some AI stocks as an example.

I am acutely aware that many of the stocks that we see flying so high today are at risk of falling drastically and never quite getting back to that high level. But of course, I don’t know.

4. “It’s just 3 dollars, how much can I lose?

You can theoretically lose everything that you invest. But people have this fixed idea that it is less risky to invest in companies where the nominal value of the individual share is low.

Listen. You can lose as much as anyone else.

Peter Lynch gives an example:

Let’s say your neighbor puts 10,000 USD in a share that costs 50 USD per share. Now it’s down to $3 and you’re thinking, “Good thing I waited, now it can’t drop any lower,” combined with, “how much can I lose, it’s only $3.”

You now buy $25,000 in stocks and feel like a king compared to that neighbor.

But wait. The stock now drops down to $0 per share. It’s game over.

Who has lost the most? Your neighbor or you?

“Most people can’t even answer that question,” says Peter Lynch, and the audience laughs.

Of course, you both lost everything, and the one who has invested the most lost the biggest amount.

Don’t be tempted to put money into a stock just because the nominal value seems cheap. Whether it’s cheap or not depends on so many other things.

For starters, how many shares did the company slice itself into? Do they even make any money? Did you check? You won’t know if something is cheap or expensive until you open the books and start looking at what’s really there – which I can teach you how to do in my e-book right here.

5. “It’s always darkest before the dawn.”

It’s a bit of an old superstition to think that when things are bad, they can’t get any worse. Some people look at the stock or the business and almost rejoice that things are going really badly, because they think that now things must turn around.

But who says so?

Peter Lynch gives examples of a lot of age-old companies that lost revenue and money. People back then said something like, “it’s absolutely horrible, let’s buy it.”

But really… it can always get worse. A company can go bankrupt. Instead of saying “it’s always darkest before dawn,” say “it’s always darkest before it’s pitch black.”

Yes, of course, that’s also nonsense, but Lynch uses humor to get his point across.

6. “When it rebounds, I’ll sell.”

People passively hold on to a stock that has fallen, promising only to sell when the loss has been recouped. They tell themselves that they will sell when it’s back at the starting point.

This is the wrong approach.

Peter Lynch offers an example: let’s say you bought a stock at 10 USD, but then it drops to 6 USD. You want to hold onto the stock until it rebounds to 10.

If you are really sure it will go from 6 to 10, you should load up the truck with the shares. But people don’t. They just hold it.

What happens then? Let’s say the stock goes up, but it never reaches $10 again. It hits $7. And $8, and $9.50.

And then it falls again.

Then what? How great was your strategy then?

The idea of ​​passively holding onto a stock until goes up to your buying point is foolish.

The stock has no idea you bought it, Peter Lynch explains. People treat stocks as if there is a relationship and as if the stock owes them something.

But the stock market doesn’t care what price you bought a share at.

7. “Me? Worry? I own ‘conservative’ stocks.”

This is the idea that some companies have been around so long that they will always be around. But that is nonsense.

There is no such thing as a “conservative” stock.

Companies are dynamic and the market is constantly changing.

Peter Lynch lists a number of old, venerable companies with more than 100 years of history… that went bankrupt.

8. “Look at all the money I lost by not buying the stock.”

People worry too much about companies that they’ve missed. It’s usually the latest high-flying and shiny stock that they sigh and drool and beat themselves up over.

Don’t worry.

“You can’t lose money on stocks you don’t own,” Peter Lynch says, adding, “the only way to lose money is to buy a stock, have it go down, and then sell it.”

9. “The stock has gone up, I must be right.” (Conversely, “The stock has gone down, I must be wrong.”)

Let’s say you buy shares in a company and it goes up 30% right away. You will probably feel like the king of the hill and run around, look at cars, and book an expensive holiday. Inside, you see a bright future for yourself. You feel you are right. You are a moneymaking machine. Yeehaw!

But wait a minute. Did you open the annual report before investing? Have you researched it? What is it that you are right about?

Your research and knowledge will not improve just because the stock has gone up.

The reverse happens when the stock falls. Then you feel like selling the kids’ used toys because the future looks bleak.

But stocks go up and down a lot over the course of a year. A share moves, on average, 50% between the lowest and the highest point during a year, Peter Lynch explains. Perhaps the latest rise or fall means approximately… nothing?

10. “This is the next (insert hot stock here)”

When a stock you own goes up, you may think you’ve found the next big thing, but take a moment to pause and make sure you haven’t got a “whisper stock” or a “long shot” on your hands.

What are whisper stocks and long shots?

Whisper stocks are the kind of stocks that people whisper about, saying it’s the latest new miracle (in the old days, stockbrokers would call you on the phone with these tips).

Peter Lynch also calls them long shots, because what you think they can accomplish is simply too far-fetched.

They typically make no money – sometimes they even generate no income at all (think biotech for example), but there’s talk that they are “the next” something (insert whatever hot company you can think of here).

This kind of “miracle” shares should be avoided, says Peter Lynch.

Everyone Has the Brains but Not the Stomach

Peter Lynch explains that it is not particularly difficult to be an investor. You can get by with math skills of a 5th grader.

But it will challenge you in a different way.

“Everybody has the brain power for the stock market, but do you have the stomach?”

He explains how there has always been something to worry about up through the decades.

In the 1950s, people were concerned that there would be a recession or a nuclear war, but neither of those materialized and the 50s became one of the best decades in the stock market. However, many people shied away from investing because of that fear.

So What Should You Do?

There is no way around it. You have to know what you are investing in. You have to open the 1o-K, calculate a little. You have to look at the product and evaluate it (alternatively, you have to invest in cheap index funds).

Luckily, you can learn a lot more about how to do so in my little e-book Free Yourself here.

 

What are the 10 best investing podcasts for you as a value investor, and how should you go about listening to them?

There are tons of podcasts out there, but the main danger is that you could end up wasting a lot of time. That’s why I’ve made a list of the best investing podcasts out there that can make you a better investor.

I have selected specific episodes that focus on value investing.

The Best Investing Podcasts Are Often About Something Else

There are some inherent problems with investing podcast. First of all, sometimes they get very nerdy and geeky because we’re dealing with people who are very specialized in a topic.

If the interviewer is also specialized, the conversation can become dry and even difficult to understand as they’ll use a vocabulary that is not accessible to outsiders to the industry.

This kind of nerd-interviewing-nerd podcast is brilliant if you have trouble falling asleep. But you don’t learn that much.

That’s why some of the best investing episodes take place on podcasts that are not usually about investing, such as Lex Fridman, Tim Ferriss and even a podcast about home decor… as you will find below.

Another problem is that a long podcast series can feel like dull homework.

I’ve actually made the mistake of trying to listen to ALL the episodes of a particular series. It’s frustrating and a waste of time. I have, among other things, attempted that with The Investor’s Podcast (TIP), but that didn’t make me happy, because I couldn’t keep up (they now have over 600 episodes on the main series and have expanded to a total of 7 different podcast series.)   

The list I have put together for you here will take you directly to some of the absolute best episodes featuring relevant interviews with investors who can really teach you something.

Let’s dive in…

1. Bill Ackman on the Lex Fridman Podcast (Episode #413)

Lex Friedman’s podcast started out as a podcast about artificial intelligence, but he branched out, and his podcast has become incredibly popular with millions of listeners. Over time, he has interviewed countless celebrities such as Elon Musk, Mark Zuckerberg and Jeff Bezos.

His style is calm and considered, and you sense that he comes prepared. A podcast typically lasts 2-3 hours, so it’s almost equivalent to reading a book.

Don’t miss his interview with the famous value investor Bill Ackman. Ackman is, in my opinion, the most talented value investor after Warren Buffett.

In addition to providing investing wisdom, it’s also a touching interview, with Ackman openly talking about divorce, a hostile takeover attempt, and falling in love again with MIT professor Neri Oxman, who hit the media with pictures with Brad Pitt and rumours of an affair…while Bill Ackman was dating her.

You can find it on YouTube here, on Apple here and on Spotify here.

2. Ted Weschler on I am Home

I am Home is usually a podcast about home, decorations and interior design. I can imagine the team behind the podcast must have wondered what hit them when they got a huge scoop in the form of an interview with Ted Weschler.

Who?

Okay, let’s rewind.

As you know, Warren Buffett is an old man, approaching 100 years of age. Nobody lives forever… who will invest for his company Berkshire Hathaway when he dies? It will probably be “Ted and Todd”.

Wait? Who? Yes, they are not household names yet. That’s Ted Weschler and Todd Combs. Warren Buffett once said that Ted and Todd are not on the panel at the annual meeting in Omaha because he considers them to be trade secrets.

Therefore, these two trade secrets rarely give interviews.

Ted Weschler probably thought it was pretty harmless to be interviewed on I Am Home about living in one place and working in another (he commutes from one state to another).

Fortunately, he also talks about meeting Warren Buffett and generally about his career, and he touches on various investment decisions.

The episode is originally from April 22, 2022, but doesn’t age. You can listen to it on Apple here or Spotify here.

3. Todd Combs on I am Home

When I am Home realized that the downloads exploded with Ted, they followed up with an interview with Todd.

The podcast series is usually about thermostats and pillows, and that means the discussion is pretty broad. Todd Combs talks about how he became an investor, how he held meetings with Charlie Munger and later Warren Buffett without realizing that they were screening him to work for Berkshire Hathaway.

At one point, Todd Combs says something about selling put options far out of the money, and the interviewer doesn’t understand what he’s saying, which is deeply frustrating for a listener like me who wants to hear more about it. I’d be dying to ask if he uses any kind of option trades as part of his investment strategy. But they quickly move on.

Todd Combs explains that the financial crisis was difficult for him personally because he worked 100 hours a week and lost the desire to run his own fund. That probably made it easy for Charlie Munger and Warren Buffett to lure him over to their team.

One important point he makes is how you get good at something. He says you shouldn’t focus so much on whether you get 1,000 or 10,000 hours of training (a point that comes from Malcolm Gladwell’s blockbuster book Outliers: The Story of Success), but focus instead on the quality of the hours, especially on whether it’s passive or active learning.

Passive and active? What does that mean?

Listening to podcasts and reading books are passive hours. When you dive into the material, open 10Ks and research companies, it’s active learning.

In other words, listening to podcasts is fine, but you have to realize that you learn far more from getting invested and doing the work (and diving into the companies and analyzing them is exactly what we do at The Value Investor Mastermind.)

You can listen to the interview on Apple here or Spotify here.

4. Todd Combs on Art of Investing

The folks at I am Home are not the only ones to get their hands on Todd Combs – so has the investing podcast Art of Investing. In this podcast, we learn more about how he trained as an investor, and how mother, his education, and his first jobs influenced his career and thinking.

One of his points is that you need to have broad knowledge to be a good investor, but you also need to dig deep and have specific knowledge about the company in which you invest.

Of the two interviews, I think the one from I am Home is better, but you can’t get enough Todd Combs and there is very little about him out there.

You can listen to the episode on Apple here or Spotify here.

5. Value Investing Fundamentals with John Huber on TIP (Episode #634)

I’m a little hesitant to mention the behemoth of all investing podcasts, TIP – The Investor’s Podcast – because there is a serious risk of you going down the rabbit hole of trying to listen to more than 600 nerdy episodes (like I did).

The Investor’s Podcast has sub-podcasts. The main one is called We Study Billionaires, but they have six others, including one about real estate, Silicon Valley and investing for millennials.

One way to approach TIP could be to select the sub-series called Richer, Wiser, Happier, hosted by author William Green, who interviews the best investors in the world. It’s a smaller series and much more manageable – and it’s definitely one of the best investing podcasts in the world. (By the way, I really recommend William Green’s book, Richer, Wiser, Happier. It is one of the best investment books I have read.)

One specific episode from the main series We Study Billionaires that is very much worth your while is episode #634 with John Huber, because in a single hour he actually explains quite well what value investing is all about.

One of the wise things that John Huber says is that you will get more out of practicing analyzing companies than reading yet another investment book. It kind of rhymes with Todd Comb’s point about active and passive learning. I totally agree. It is about diving in and learning to analyze companies. You have to dig in and get dirt under your nails, really doing the work.

You can listen to the interview with John Huber on Apple here or Spotify here.

You can find TIP’s own homepage here, and Richer, Wiser, Happier with William Green here.

6. “Selling Out” on The Memo with Howard Marks

Value Investor Howard Marks, who runs the hedge fund Oaktree Capital Management, hosts a podcast he calls The Memo.

A bit of background: Howard Marks also writes a newsletter, and Warren Buffett once said that he stops everything he’s doing when an email from Howard Marks hits his inbox because his newsletter is that good.

Warren Buffett once wrote a letter to Howard Marks urging him to write a book and offered to write the introduction to it. Marks took him up on the offer. He has since written two books.

However, the problem with the best money managers is often that they are geeky professionals who love jargon and sometimes have trouble communicating with ordinary people like you and me. That being said, I think Howard Marks is doing a pretty decent job explaining himself.

One specific episode worth a listen could be “Selling Out”, which is about when you should sell your shares. His main point is that you should NOT just sell because the stock is going up or down, which is what most people do as a reflex.

You can listen on Apple here or Spotify here and get wiser about selling stocks.

You can also find the podcast on Oaktree’s own homepage here.

7. Howard Marks on The Tim Ferriss Show (Episode #338)

The Tim Ferriss Show is probably my favorite podcast, but it’s usually not about investing.

Tim Ferriss, the author behind the bestselling book The 4-Hour Workweek, focuses on entrepreneurship, efficiency and the good life.

One of my favorite episodes – which isn’t about investing at all – is podcast #694 with Sam Corcos because it’s bursting with ideas on how to be efficient and live a good life. Sam Corcos specializes in hiring personal assistants, so he talks a lot about outsourcing and being efficient. My brain almost flew out of my ears when Corcos explained that he doesn’t follow the news or engage in social media at all – he has an army of assistants to handle that sort of thing for him. One easy little tip from that specific episode: he says that the best productivity hack for regular people who are not about to hire an assistant is to learn all the keyboard shortcuts – so there’s a little task for you today. But let’s get back to investments…

Tim Ferriss, who has a slow and thorough podcast style with very long conversational questions, interviewed the famous value investor Howard Mark in episode #338.

The episode actually dates back to 2018, but it will never age, as he talks about the difficult psychological aspects of investing. Howard Marks also talks about how you can identify bull and bear markets. He says that if you turn on the news and listen, you should take note on the general mood. Is it negative or positive overall? This can be one of several landmarks.

He says, “when the recovery is old, the bull market is old, the psychology is elevated, the valuations are high, then you should know that the odds are not on your side, and you should take some money off the table and behave in a more cautious way, and vice versa.”

You can listen to the interview with Mark Howards on Apple here or Spotify here. Or YouTube here. Tim Ferriss provides great notes and a transcript here.

8. Mohnish Pabrai on My First Million (Episode #586)

Mohnish Pabrai is sometimes called the Indian Warren Buffett.

Pabrai actually has his own podcast, Chai with Pabrai, which – if you ask me – is unbearable to listen to because the sound quality is poor and it often consists of unedited lectures.

It’s better to catch Mohnish Pabrai on other podcasts where the audio is good and where a skilled interviewer can ask clarifying questions.

You can check out Mohnish Pabrai on My First Million episode #586.

You can listen on Apple here, Spotify here. Or the podcast’s own website here.

9. Novo Nordisk On Acquired

The investing podcast Acquired analyzes companies and interviews CEOs and founders. The style is thorough, entertaining and well prepared.

Look through the list to see if they made an episode with a company you own shares in or are considering investing in. They have, among others, discussed Starbucks, LVMH and Microsoft on the podcast.

Because I’m Danish, I am going to point you to the episode they made about the Danish pharmaceutical company Novo Nordisk.

They start the podcast with a history lesson, and I learned a lot about the origins of Novo Nordisk – about how it was created to save a scientist’s wife, about how diabetes in the old days was a death sentence, about how insulin was extracted from leftovers from animal produce, and how Novo and Nordisk initially were two rivals who hated each other.  Ben Gilbert and David Rosenthal are good storytellers and convey everything in a rather entertaining way.

You can find the Novo Nordisk episode on Apple here or Spotify here.

As a side note, there is also an interview with Ben and David on another podcast, Art of Investing. You’ll find that interview on Apple here or on Spotify here.

10. Value Investing with Legends from Columbia

Columbia Business School – where Warren Buffett studied to become a value investor under Professor Ben Graham – has its very own investing podcast called Value Investing with Legends. Here, they interview giants such as Todd Combs (but now we already have him on our list twice), Mohnish Pabrai and Howard Marks. You can pick any of them.

A warning is due here. Remember, we’re dealing with Ivy League professors interviewing money managers. It gets so nerdy your ears might bleed.

You’ll find Columbia’s investing podcasts series on Apple here or Spotify here.

How Should You Listen to these Best Investing Podcasts?

Don’t waste too much time on these investing podcasts. Try to consume them fast and while you’re doing something else.

Listen while you’re driving, walking the dog, or doing the dishes. Increase the speed a little, to 1.25 or 1.5 so it goes a little faster.

Please promise me that you will not attempt to listen to all the podcasts in a series, like I attempted to with TIP. You will waste time and your life will fly by.

Pick the best ones. The risk is that you’ll waste time on “passive hours” instead of active hours where you actually analyze companies and get invested.

If you want to listen to a podcast every day to stay informed, I would suggest Wall Street Breakfast, which you can find on Apple here or Spotify here.

Do you feel like something is missing in the podcast world? I’ve been thinking about creating my own podcast for a long time now.

 How do you know if the price of the stock is reasonable? If you want to learn how Warren Buffett calculates the value of companies, you are welcome to download my free e-book here.

Stocks are diving, and you feel a sting of anxiety in your stomach when you read the headlines or visit your online bank.

How do you remain calm in that kind of market?

To be a successful investor, you have to avoid the natural human instinct to follow the herd.

When stocks plummet, your natural tendency is going to be to want to sell, and when the stock market is going up, your natural tendency is going to be to want to buy more.

In bubbles, you should be a seller, not a buyer. In busts, you should be a buyer.

You have to have the discipline to stomach the volatility of the stock market.

Here are seven key ways to develop the strength to go against the herd.

1. Be Financially Secure to Stomach any Volatility

First of all, you have to have some savings.

You’ve got to feel comfortable that you have enough money in the bank that you won’t need what you’ve invested for many years to come.

Some people think it’s a shame not to invest every penny that they have. In their world, cash not invested is a waste.

If that’s your thinking, I suggest you look at it this way instead: your cash savings are buying you something very valuable and specific, and that’s peace of mind and the ability to stomach market volatility. You should have at least two types of savings.

A. An emergency account for a car repair or a new fridge. This should be at least 5,000 USD that are always available.

B. A security savings of either three months’ salary or six months’ expenses. This should also be ready in cash. Apart from giving you peace of mind about the stock market, it will also make it easier for you to make some bold career moves and set boundaries at work.

2. Don’t Leverage 

Don’t invest with borrowed money.

Most people know not to take out an expensive bank loan and invest that money or speculate with it.

But there is a different way of borrowing money that is not so obvious to the naked eye. Many platforms let you invest with leverage – almost without you noticing it: it’s called a margin account. Avoid this. You should never invest more than you have.

Investing with leverage has destroyed many good investors, even good value investors who were peers of Warren Buffett.

Call your brokerage platform to make sure that you’re only investing your own money if you’re not sure.

Some more complex financial products contain leverage, but if you are just selling and buying stocks, you are safe. Why is this important?

Leverage and debt makes you more vulnerable to panic and huge losses in a market with high volatility. 

3. Remember: Volatility Happens to Everybody

Just because something goes down in value after you buy it, it doesn’t mean you’ve made an investing mistake.

Remember that no one is immune. We all sometimes see red numbers – it’s how you react that matters. Are you going to panic and turn it into a permanent loss or be cool? 

Keep your focus on the long-term prospect.

The stock market moves up and down all the time. Volatility is just part of the game. 

In the short term it’s a voting machine, whereas in the long term it’s a weighing machine.

It’s affected by all kinds of events in the world, and few of these events have anything to do with the business of the company that you are invested in. This is just the nature of volatility. But don’t worry, if your company is sound and has some competitive advantages, the stock price will straighten itself out in the long run.

If it’s any consolation, Warren Buffett has also invested in companies only to see the stock price drop further. One example is The Washington Post, which he invested in during the 1970s. More than a year after he initially invested in the newspaper, the stock price was down 25 percent.

This investment later turned into a profitable one. Four decades later, Buffett exited the position (the original investment of $10 million) in a tax-free swap worth more than $1 billion.

Volatility can really be your friend if you learn how to navigate in it. 

4. Research Your Companies Like an Owner

Don’t buy a stock because someone in a podcast predicted high returns and a glorious future for the company.

Research the companies you invest in. Analyze it the way you would if you were buying the entire company.

• Make sure it’s a business you understand.
• Make sure you like the management.
• Make sure the company has some kind of competitive advantage.
• Make sure the company doesn’t have too much debt.

Thinking like a owner makes you more resistant to volatility jitters.

It’s a good idea to use some kind of checklist. You can borrow mine here.

5. Pay a Reasonable Price

The price of the stock should be reasonable compared with the earnings of the company.

I usually say “buy it when it’s cheap,” but I fear that many people will think a stock is cheap if it has fallen from a recent high, and that isn’t necessarily the case.

You really have to look at the value in the company and compare the stock price to that.

Let’s go back to The Washington Post for a moment. Warren Buffett had calculated that it was priced at 25 percent of the intrinsic value before investing in it. That’s like buying one dollar for 25 cents. That it fell to 20 cents on the dollar does not make the original investment bad. It means you might want to consider buying some more since it’s an even better investment now.

What if they have no earnings? Don’t invest in it then.

Companies with no earnings or negative earnings are too risky to invest in.

6. Distract Yourself

If you’ve followed the first five points and still feel uneasy, there is only one thing left to do: something else.

The time has come to distract yourself from the market volatility and entertain yourself with other things.

Whether it’s meeting up with a good friend, playing a match of tennis, hiking in nature, playing Monopoly with your kids, watching a show on Netflix, or just concentrating on your work, do it if it can take your mind off worrying about stocks.

If you’ve done all the right things, you can relax and enjoy life – even if the stock market is raging. Leave the fidgeting with the sell button to others.

7. The Very Last Resort: Outsource It

If you find it hard to distract yourself from market volatility and if have a hard time staying away from the panic button (selling at a loss), you may want to consider letting others invest for you.

 As Warren Buffett says, investing doesn’t take a high IQ – it takes a calm attitude.

 You may be smart and informed, but if you are nervous as a leaf in the wind, it’s going to be difficult for you to make wise investment decisions because the herd reaction can get you galloping.

 Outsourcing the investment work is a solution to this. One method may be to invest the same amount each month in passive index funds, but this method doesn’t have much to do with value investing.

 There are several funds worldwide with a value investing purpose (I run one based in Denmark). One easy option could be to buy shares in Berkshire Hathaway, but just as with any other public stock, you have to make sure that stock price is fair compared to the intrinsic value. Even the most wonderful company can become a horrible investment if the stocks are bought at an inflated level.

 How do you know if the price of the stock is reasonable? If you want to learn how Warren Buffett calculates the value of companies, you are welcome to download my free e-book here.

Where do you find inspiration to discover your next stock investment? One place you can look is in the portfolios of major hedge funds.

In value investor circles, we call value hedge fund managers “gurus.”

It’s quite common for value investors to keep track of what the well-known fund managers are doing – and even replicate some of their trades.

But how do you keep track, and how do you evaluate their investments?

In this blog post, I’ll give you my top five tips for copying the big gurus.

1. Find a List of Hedge Funds with a Value Approach

The funds investing in the U.S. market must report their trades to the U.S. Securities and Exchange Commission (SEC).

This makes it easy for us to look up what they have invested in – at least in U.S. stocks.

The SEC’s own website is not so easy to navigate or search, but there are other websites that collect data and make it more manageable.

You can look the gurus up here:

• GuruFocus
• Dataroma
• WhaleWisdom

2. Look at the Number of Companies in the Portfolio

Value investors can be divided into two major groups.

1. Quantitative Gurus: these are hedge funds that invest through financial ratios in many companies. We call them hedge funds with a quantitative focus.
2. Qualitative Gurus: hedge funds that carefully select companies based on a checklist. We call them hedge funds with a qualitative focus.

We are, of course, interested in the qualitative ones because the companies they have carefully selected are of high quality.

A very rough rule of thumb: if the fund has more than 100 different companies in the portfolio, they are quantitative. But it’s a bit more complicated than that; you should also look at the composition of companies…

3. Look at the Composition in the Portfolio

How much does the guru have in the fund’s largest investment? Value investors with a qualitative approach are not afraid to put a large part of the portfolio into a single company.

As a very rough rule of thumb, a guru with a quantitative focus has a minimum of 10% in a company. However, some value investors set a rule that there must be a maximum of 10% of the fund in a single company, so it’s okay to let it go a bit below 10%.

Here are a few examples of value portfolios with high concentration as of now: 

• Warren Buffett: half of his portfolio in Apple
• Buffett’s partner Charlie Munger: 40% in Wells Fargo
• Li Lu: almost a third in Bank of America

4. Look at the Pattern in Their Recent Trades

We always need to assess their recent trades in a larger context.

First, you need to evaluate whether they are sellers or buyers in the current market.

This gives us an idea of their attitude toward the market. What did they do in the last quarter?

Are they selling more stocks than they are buying? Have they done anything at all in the last quarter? Or are they waiting?

5. Research Their Recent Stock Purchases

What is their latest stock purchase? Is it from the last quarter?

Look up the companies. In your initial scan, you should investigate:

1. Did the stock price fall? As a general rule, I avoid companies whose stock price is at an all-time high.

2. Do they make a profit? I avoid companies that are losing money – unless there is a clear explanation of why a particular year is different (such as the COVID-19 pandemic).

3. Are the revenues growing? I avoid companies that are shrinking.

 Where do you look this up? For a quick overview, I use MSN Money. It’s free and gives you an 8-year overview (click on Financials after you have looked up the company).

Once you’ve found a company where you can answer yes to all three questions, you can start running them through a proper checklist to ensure that it’s a good investment. You can borrow my checklist here.

This is where the real research begins (and you can learn much more about it in the Value Investor Mastermind).

If you want to learn about how I invest in stocks without fearing a crash, you can download my free e-book Free Yourself  here.