As we merrily watched the stock market fall out off the wall today, we began to surf the Web a bit to console ourselves. And sure enough, we found two absolute gems on the topics of Value Investing and Psychology of Human Misjudgment.
AZ Value Investing is a two-post blog, founded less than a year ago. Its second, current post is a total analysis of a company named Valeant (NYSE:VRX). In that long, long post is a link…
to a 1995 talk by Charlie Munger, of Berkshire Hathaway fame, on the Psychology of Human Misjudgment. This link is an audio recording posted on YouTube of a talk Mr. Munger gave at Harvard.
Both of these gems will give you amazing insights into a more complex form of stock analysis that is well beyond that of IFO’s simple method. Our way has been devised for our own peers, mainly widows. It’s main focus is on maintenance of value and a safe income stream, done independently, without assistance from financial analysts and their ilk.
The other, more sophisticated approach is aimed more at major wealth BUILDING while endeavoring to understand the nuances of company financial reports and SEC filings, and the broader view of the fallacies of human thinking, which we ALL engage in. Recognizing those fallacies is one giant step toward rationality, a key element in successful investing.
What IFO has learned already, and she hasn’t even finished listening to Mr. Munger’s talk, is that irrationality is all around us and we are all subject to it. [Except for our DDFIL, the most rational person she has ever known. And even he was a bit weird at times.]
So, good reading folks!