This short article is an excerpt from the book “Common Sense” by Joel Greenblatt. JG is a legendary special-situations investor who had a ~40% CAGR (compound annual growth rate) for 20 yrs while running his hedge fund, Gotham Capital. In his simple story of Investor A vs. B, JG showcases the power/importance of starting to invest as early as you possibly can.
This short brochure is a great primer on some very basic, but critical, personal finance concepts and ideas.
This is a short article about the 2008 bet Warren Buffett (legendary investor, former wealthiest person in the world, CEO of Berkshire Hathaway) made against hedge fund manager, Ted Seides, to showcase that passively investing in an S&P 500 index fund is superior to investing in hedge funds because, much more often than not, their excessively-high management fees and tax-inefficient high portfolio turnover lead to underperformance vs. the S&P 500.
This is a short article about how the Nevada Public Employees’ Pension Fund effortlessly outperforms its actively-managed peers by passively indexing.
Jack Bogle is the founder of Vanguard and the inventor of “indexing”. This book will teach you about index investing and make a very strong case for why the extreme majority of investors should just dollar-cost average into a low-cost S&P 500 index fund (e.g. $VOO, $SPY, or etc) and/or a total market index fund (e.g. $VT, $ACWI, or etc) instead of trying to “beat the market” by actively managing their portfolios. Personally, I don’t index at all, but I think every high school/college student should read or listen to this book because “dollar-cost averaging into a low-cost S&P 500 index fund” is something everyone can do to achieve/maintain financial independence.
This is a short personal finance/investing guide by William Bernstein, a neurologist turned investing author. I don’t agree with 100% of what it says, nor have I read all the books it recommends (I don’t expect you to read any of them), but overall I think the guide itself is a solid starting point for anyone wanting to learn about personal finance/investing.
Now that you’ve read a bit about passive/index investing here are some articles/lectures relevant to “active” investing. This article is Warren Buffett’s refutation of the efficient market theory, which theorized that stocks are always priced perfectly by the market (based on all available information about them), and therefore anyone who beats the market is lucky rather than skilled. The main ideas to take from this article are that stocks are just “pieces of businesses”, the market often misprices these “pieces of businesses”, and if you want to be a good investor/outperform the market you simply need to buy businesses when they’re selling for meaningfully less than a reasonable estimate of their intrinsic value (which is simple, but not easy).
If you’re going to actively invest you need to know what free cash flow (FCF) is, because those are the true “earnings” that matter to an owner of a business. FCF = Net Income - Maintenance Capital Expenditures (maintenance capex is the money a business has to reinvest in itself each year just to sustain its existing operations, as opposed to growth capex, which is the money a business chooses to invest in itself to try to increase its earnings power).
In this talk Akre shares some investing stories and explains his simple but powerful framework for looking at companies, “the three-legged stool”. The three legs of the stool of a great company or “compounding machine” are 1) some kind of durable competitive advantage 2) a high skill & high integrity management team, and 3) a wide & long runway for above-average returns on incremental capital. Chuck has used this framework to hit three 100-baggers in his investing career and achieve legendary success as an investor.
Phil Fisher was a legendary investor, author of the investing classic "Common Stocks and Uncommon Profits", and a pioneer of growth stock investing. This is Fisher's basic checklist to help identify companies with the potential for long-term above-average growth of free cash flow per share.
This is an article Buffett wrote for Fortune Magazine back in 1977 (1965-1982 was a period known as “The Great Inflation”) that's unfortunately very relevant today given the historically-high inflation the US and the rest of the world have been experiencing lately. Additionally, appended to this article is a great blog post by Geoff Gannon that discusses inflation’s effect on maintenance capex (a business’s reinvestment requirements) and thus its annual free cash flow.
This is a short article Buffett wrote for Fortune Magazine in 2012. As titled, it explains why investing in stocks, like the S&P 500 (i.e. a diverse collection of high-quality American businesses), are almost always a better long-term investment than gold or bonds. This is important to understand because the better you understand that fact the more likely you'll be to invest in stocks for the long term.
This is a transcript of a talk Buffett gave to Notre Dame undergrad and MBA students back in 1984. This talk is full of timeless business, investing, and life wisdom and will implicitly and explicitly teach you a lot of simple, but powerful ideas in those areas.
This video lesson was narrated and produced by Ray Dalio, the founder of Bridgewater Associates, the largest hedge fund in the world by assets under management. This video lesson will give you a better understanding of how economic cycles work by explaining how consumer/business/gov't spending, debt, interest rates, employment levels, wage levels, asset prices, and more are linked together.
This is fundamental knowledge that basically everyone should know, but too few people actually understand. Having an adequate grasp of how financial statements work will allow you to better understand and manage your personal financial situation and the financial situation of any business or organization you are involved with.
This psychologically-oriented speech was given in 1995 at Harvard University by Charlie Munger, a polymath billionaire investor and fmr. Vice Chairman of Berkshire Hathaway. Munger was a huge proponent of achieving success by avoiding irrationalities and large blunders (rather than doing extraordinarily difficult things), so he naturally took an interest in psychology to try to identify the most common irrational behaviors to avoid. In this speech, Munger shares his list of the most types of human irrationality/misjudgment and a few mental models to add to your mental toolkit.
When you think of a personality test you probably think of the Myers-Briggs Type Indicator (MBTI) assessment which is frequently administered at schools and corporations. However, unfortunately, the MBTI has some critical flaws and therefore provides very little predictive utility. Fortunately, there's a drastically better framework for conceptualizing human personality and that's the Big 5 personality traits model, which has a lot of predictive utility, is the most academically- and clinically-supported personality framework, and is one of the key tools a psychologist would typically use when conducting a personality assessment. In my opinion, the Big 5 is something everyone should know so they can understand themselves and others better and structure their investments, career path, relationships, and life accordingly.
Here's an example of a quick/free online Big 5 personality test. By averaging your scores from a couple quick/free Big 5 personality tests you should be able to get a decent estimate of what your Big 5 scores would be if you had the test administered professionally.
This booklet by the Hennepin County Bar Association is a good resource for a lot of different life/legal FAQs.
This brochure explains some of the legal basics for "common interest communities", which are imperative to know if you ever plan on buying real estate that exists within this very common legal structure.
This informational brochure by the Office of the MN Attorney General describes the rights and responsibilities of landlords and tenants, according to the laws of the state of Minnesota (though some counties or cities may have additional ordinances that supplement what is required by the state). If our education system wasn’t so devoid of pragmatism this would be covered in school (given nearly everyone will be a renter or landlord at some point in their life); however, it’s not, so if you want to protect yourself as renter or landlord you should familiarize yourself with the basics via this brochure.