Chapter 3 of the book margin of safety/ Klarman doesn't like index funds.
Margin Of Security Playlist
Chapter 1
Chapter 2
Overview of what I do (Research Platform, Efficiency, Portfolios, Method).
What is this channel everything about? Worth Investing:.
My 5 Core Stock Market Investing Beliefs.
YouTube Portfolio Playlist.
My enthusiasm is to try to find low risk high reward investment chances with a long-lasting business owning like focus. I use my accounting abilities and investing experience in order to discover the best services to own that use the possibility to lead me towards my financial objectives.
If you are a sophisticated financier searching for in depth, independent stock analyses and investing concepts, here is my STOCK MARKET RESEARCH PLATFORM (service research and threat benefit analysis, stocks to purchase from my covered stocks list, my portfolio):.
STOCK EXCHANGE RESEARCH STUDY PLATFORM (STOCKS COVERAGE, FINANCIAL INVESTMENT METHOD, MARKET COMMENTARY & MORE):.
Are you an investor that is just beginning? Sign up for the FREE Stock Exchange Investing Course – a detailed guide to investing talking about all that matters:.
You can DOWNLOAD THE TOTALLY FREE COMPARATIVE STOCKS LIST AND INTRINSIC WORTH Design Template on my Stock Market Research Study Platform (with YT STOCKS PORTFOLIO):.
I am also a book author:.
Modern Worth Investing book:.
Check my website to hear more about me, read my analyses and about OUR charity. (YouTube advertisement cash is contributed).
www.svencarlin.com.
Listen to Modern Value Investing Podcast:.
I am about long-term investing however my better half is about something a lot more important; long-lasting health! Naturally Ana YouTube Channel:.
The listed below links are from third parties or channel sponsors where I get a fee from:.
I frequently get asked about brokers, here is a low cost broker, a worldwide one that allows you to purchase on worldwide markets, and likewise provides complicated services like options for when your investing skills grow. For now, it is one of the best services I have found for international financiers, also based on your remarks and inputs:.
For a $140 discount rate on SeekingAlpha Premium Yearly Plan (From $239 to $99), please utilize the following link:.
Brokers video:.
Constantly remember: "Investing involves risk of loss".
Wealth Builders Club Secrets Revealed – Click Here to Discover the #1 Investment Resource!
Dobar dan Sven! I really appreciate your videos. Have a great weekened.
HVALA!
There are ETFs with value factor, which have margin of safety, also you can invest into ETF according value – PE and PB ratio and choose historically best performing factor ETFs and geo ETFs with high return to risk ratio and low correlation between ETFs.
that is again not really value investing, or better to say, just an ancient form:-)
@Value Investing with Sven Carlin, Ph.D. I specified it in simple way, but ETFs like UBUS or EMVL choose value and quality stocks. Historically index funds beat active investors and value ETFs, small cap (value) etfs and emerging market ETFs, consumer staples and healthcare sector ETFs and their combination can beat SP500 even when return to risk is evaluated, as is in the research on engineeredportfolio. Most active investors can not beat even SP 500. With factor ETF like on website engineered portfolio you can have higher return to risk ratio, especially invest in value ETFs and ETFs with low correlation to bubbled SP 500 and MSCI World, furthermore you can rebalance between ETF or other assets and achieve even higher return.
Ofc there are, just it doesnt fit the narrative. Average or even skilled investor will most likely underperform the market over the long term, even before costs, taxes and transaction fees. And when you add factor etfs to the mix, chances to beat them are miniscule and sheer luck. I can buy ETF and pay zero taxes in EU. Investing in individual stocks bears severe headwinds (manager/advisor fees, gains tax, estate tax, concentration risk, psychology etc).
@Massa Felipe Exactly, even most professionals in hedge fonds can not mostly beat even SP500, to beat factor etfs is almost impossible for them, and even more impossible for normal person. Costs, taxes, psychology and other things, you mentioned are next disadvantage for active investors and most negative part is loss of time, stress and life. I agree there can be bubble in SP500 and MSCI World, but SP500 is just small part of my portfolio, most of portfolio are factor ETF like value, small cap, certain regions or sectors.
I really like this series Sven! Thanks for the quality content.
Glad you enjoy it!
The thing with indexing: you get the winners. In value investing: you have to pick a winner. You have to pick a winner because most stocks/business will do poorly/underperform, but hopefully as a value investor you also have fewer of the underperformers. Value investing is hard: you have to be a business analyst and you have to be willing to look wrong for a very long time. Thats why so few do it, but also why it works.
good point, thanks for sharing!
Comcast, Intel, ATT,VZ, WBD. Learning that “value investing” is a thing of the past, people don’t have patience anymore for theoretical recoveries or improvements, if a company is a “value stock” that means management has failed and will most likely continue to fail. Every youtuber channel parades out there deadbeat value stocks and small retail investors get screwed.
@Loudlevin I think value investing is a good idea in principle, but in practice it’s very easy to fall for value traps.
The way I view it is like this: most stocks that fall, probably deserve to fall when a company has bad news surrounding it, such as a bad earnings call.
However, in some rare instances, the market does seem to overreact to bad news, and that’s where value investors should strike. But then again, most people will THINK they have uncovered a market overreaction, when in reality it’s just a value trap. I have come to accept that the market is more often closer to being right than being wrong.
@William Read No, they don’t. Sven has outperformed the market for a very long time.
I agree. Value investors do outperform the market, but how do you know you are in fact a value investor. Thinking you are a value investor VS being one. Although the market might not do well for a very long time from now. We had 60-70 years of what, 10% on average? What if we get 5% for the next 30 years? What if the market doesnt crash but also doesnt move? We had a 40 year bull market. It’s not going to continue for another 40, that’s for sure.
Index funds can be bought under intrinsic value. But I get it, probably most don’t estimate index intrinsic value and margin of safety like they should.
very interesting!
To be fair investing in low cost ETFs that track broad markets is one of the safer methods of investing if you have a long horizon and the discipline to dollar cost average every month. Value investing is clearly more profitable if you can do it correctly but most folks would be best off investing in MSCI world or something similar then satelliting with some quality individual stocks if they feel confident.
Value investing vs low cost ETFs or other passive investing strategies! KEY DIFFERENTIATING FACTOR – a great video topic! Thanks!
True, index funds outperform svens portfolio but his ego likes to try to beat them
Yeah. Add no time to the equation. A bloke working 8-10h a day, then spending time with family cannot outperform a low cost etf.
@Value Investing with Sven Carlin, Ph.D. or a mix of the two!
This is a wonderful idea to summarize chapters in your favorite investment books. Keep it up!
Thank you! Will do!
@Value Investing with Sven Carlin, Ph.D. – Awesome idea!
Such a privilege to be reading the book and after it getting a summary from Sven!
🙂
Thanks for another video Sven, it’s always a good day when I get to hear your advice or perspective 👍 Due to the current interest rates on the rise in Sweden on the horizon and my current financial situation, I sold a big chunk of stocks and index funds and paid off a majority of my loan instead. I’m still gonna invest monthly moving forward but not at the same level as I did the past few years. Next year I will become completely debt free and then I will increase my monthly investments into stocks and index funds again.
For me this was the right decision at the moment for my own peace of mind.
Mortgage loan, student loan, car loan, will always be the best loans you can get. The govt. even pays you back money if you have a mortgage loan. Never pay off these loans if you can avoid it.
@TheBooban yes I understand what you mean, but the loan I’m talking about is a different type of loan due to some bad naive economic decisions combined with health issues some years ago. It’s at 6% interest currently due to rising rates and would keep rising in interest over the next few years. So the way I see it is paying off the principle is “guaranteed returns” because of the reduction of interest being paid etc, and when that goes over a certain treshold it just makes more financial sense to pay it off for me.
Great overview of the chapter. Keep them coming
Thanks, will do!
I think index funds make sense for a lot of investors, but without investors picking individual investments we can be sure that markets would become less efficient
🙂
So it would be a good thing for value investors if more and more people index?
Yes it is! The more dumb money is in the markets, the better (paying any price for an asset is just stupid, or?). Now, there are huge bargains all around just because few care about (except insiders – they buy a lot!), like bank stocks, broadcast media, german “old” industry (yes, energy prices are high, but most companies operate worldwide) etc. The more passive money goes in, the more pump in the megacaps (because the obsolote structure of marketcap weighted index funds – big reason for the “bubble-character” of these prouducts), while bargains get dumped more and more until it becomes too obvious and the bargain hunter can collect nice profits.
Hey Sven good video but could you provide a record of your returns? People like Joseph Carlson provide transparency which gives his videos more legitimacy. I am not criticizing I am just suggesting.
I really like this video, and don’t really care for ETFs but understand why people like them especially pension fund type investors. I really appreciate you contrasting the benefits and drawbacks of ETFs thanks.
That’s an amazing photo of Pula, Croatia! It’s cool to see where you went to school. That’s so neat that your school was right by ancient ruins!
Thank you for another great chapter summary from this book. I am learning so much and it remains so relevant today!
P.S. Have you visited Plitvice? It looks beautiful in photos.
yes, Plitvice are beautiful, just go off season when there is a lot of water and fewer tourists!
@Value Investing with Sven Carlin, Ph.D. Thank you for the tip! I hope to see it someday!
Stock picking is increasing your risk profile and widening the tails of your investment outcomes. DCA’ing into index funds is taking the central limit theorem and making it your friend. One of these has a lot less “margin of safety” than the other.
Thanks Sven. Having never bought any stock – after your analysis of it – I have always learned something from each of your videos. Also, I suspect that your recent ‘portfolio dump’ has precious little to do with financial ‘value investing’ and way more to do with physical wellbeing. Finding the right way and place to live is way more fundamental than making a profitable bet; imho.
Thank you for your comment••
Be sure to contact the What’sap line above for more information and consultation on investment. I have a new investment I am sure you will like to be part of it.
It’s interested that unlisted private debt has significantly outperformed bonds over the last decade or so, yet many investment advisors write it off as a bad type of investment. I like this type of debt because of the low correlation with listed equities, the increase in yield as interest rates rise, and the low default risk in an era of low unemployment.
In contrast, low unemployment is bad for many listed equities and bonds, since it contributes to inflation, which in turn leads to higher interest rates and stock sell-offs.
After value stocks, private debt and private equity are probably the best assets classes to be in with the current macro environment.
thanks for sharing – interesting point on private debt, but you need to know it well to navigate it!
Thank you Sven. What’s very interesting is that the book was written by Seth when he was just 34 years old, how quickly he understood the correct way to go about investing is very interesting. 👍 👍
What an amazing series this is, I feel i don’t need to read many books now. Each chapter has single video, wow! Thanks Sven!
Thanks for the video. I’m just thinking: people thought amazon and facebook was sure investments. How’s that better than index funds?