Good luck to all warriors running Boston Marathon 2018 today!

By | April 16, 2018

April 16 is Patriots’ Day – the day marks 2018 Boston Marathon. Currently the weather forecast points to a snowy Sunday followed by a raining Monday with wind blowing against the runners from northeast at 26 mph strength. Look like it is going to be a very challenging race condition. But at the same time, I am confident that this is the core of the marathon spirits: challenging yourself to be excellent in any adversaries. Best of luck to all my friends and fellow runners competing today!

The past week has been eventful: major indices are extremely volatile, mainly due to the degree of concerns around trade frictions and corporate earnings. However, we at FIC are fundamental value investors and our main attend is not in general market indices nor do we forecast where the market is going to end over next few days, weeks or months.

Instead, we try to focus our attention to opportunities presented by Mr. Market during such volatile times: certain companies will be traded at a very attractive price due to certain unfounded concerns and extreme swing of emotions in the market. So, lucky us, we got two names in our tracking list that may be considered for further analysis and may become the next significant holding in our portfolios.

The same Ray Dalio who said on Jan 23rd: “If you’re holding cash, you’re going to feel pretty stupid”, came out warning on the significant risks of trade wars or actual regional “shooting wars” (not sure how it is defined). It seems to me that he is flipping between bullish/bearing every few weeks. Maybe that’s how these Hedge Fund managers make money or make the appearance that they are clever but track records from past few years did not support that.

Books we revisited recently and finished recently

Following and reading some pundits’ options are generally viewed as significant waste of time. As an investor, you should be able to think independently for yourself, and disregard other people’s opinions (unless these people pay your bills). We have found that the best way to learn is to read time-tested books and extract, digest and reflect from these books to improve your own business or life.

Recently we are at the end of the thirdread of Ben Graham and David Dodd’s “Security Analysis”.This book was written at the end of great depression, almost 100 years ago. And many principles in that book still stand so well in today’s market. And every read in the past has given us new thoughts, new inspirations and new ideas. If you haven’t read this book, I highly recommend you to start from page 1 and maybe read it several times. You will benefit greatly from author’s insights, experiences, skills and advices for value investing!

Another book we recently finished is Steven Pinkers’ “Enlightenment Now!”.Normally we only stick to time-tested classic books, not new best sellers that play to certain time of the history. However, this book was highly recommended by Bill Gates who read hundreds or thousands of books and he gave this book a #1 in all books he has read.

We discussed about one chapter of this book in this post: “Book recommendation” from February 2018. The whole book was even better. I will not spoil the fun but I highly recommend every investor to spend some time with this book. It refuted a lot of common beliefs with statistical data. It suggested a much better future and optimistic worldview on human’s progress over centuries. It coincidently suggested the same kind of optimism with Warren Buffett’s regarding the future of US and the world. I may not agree with some of his views at the very last chapter on President Trump, I do think that his book provides a manifesto for the future. As a value investor, we should overcome the bias and try to use data and evidence to make our judgments.

Leave a Reply