Free cash flow is a key metric in value investing. It provides a more reliable view of a company’s financial health than its earnings, which can be influenced by creative accounting. By focusing on free cash flow, investors can identify financially solid companies with long-term potential and reduce reliance on speculation. As we close out 2024 and as InvestED nears its 500th episode, this week we’re looking back on an episode from very early in the show’s run. This Vault pull serves as an excellent primer to anyone who’s new to the show and gives a great overview of Rule #1/Buffett-style investing. For some great year-ending insights into the mind of the Oracle of Omaha, click here for a free copy of Phil’s Warren Buffett Book of Quotes: https://bit.ly/3OEPXjL Topics Discussed: Humanizing companies Crowdfunding and regulation Cash flow vs. earnings Certainty in investing Resources Discussed: Payback Time Learn more about your ad choices. Visit megaphone.fm/adchoices

Season’s greetings, value investors! Phil and Danielle check in to reflect on the holiday season and express gratitude for the support of all InvestED listeners throughout the year. As our hosts prepare for some vacation time to close out 2024, we want to share a warm reminder to cherish the season (while staying mindful of long-term financial goals). Whether you’re new to InvestED or just looking to revisit some classics, click here for curated playlists featuring some of the best episodes from over the years: https://bit.ly/3MUOiFn Learn more about your ad choices. Visit megaphone.fm/adchoices

So a business you own is undergoing an event that’s made the future less certain—so what’s your next move as a value investor?  Finding the right time to sell can be difficult when the M.O. is to buy and hold, but knowing when to break with an investment can be just as important as knowing what to buy in the first place. Investing success hinges on finding antifragile companies—those that thrive in adversity and compound growth over time. Focusing on a few resilient businesses, rather than over-diversifying, leads to better long-term returns, especially during downturns. Rather than timing the market, investors should prioritize companies with strong fundamentals and compounding potential. Patience and discipline are vital to benefit from their growth through adversity. On this week’s show, Phil and Danielle discuss how to approach your investments having events and what the Rule #1 philosophy can tell us about these situations. For help in planning out your investment journey in the year ahead, don’t miss your free copy of Phil’s 12-Month Financial Success planner:  https://bit.ly/45AP6Xh Topics Discussed: Chipotle’s E. coli outbreak San Diego real estate problems Intrinsic value Antifragile businesses Emotion in investing Sprouts FOMO Tulipmania Resources Discussed: All In Rule #1 Learn more about your ad choices. Visit megaphone.fm/adchoices

Your circle of competence is the cornerstone of smart investing. Expanding your knowledge as you grow keeps your skills sharp and your strategy strong. When you focus on what you know best, you gain a clearer view of potential investments. This clarity can help you navigate market shifts with greater confidence and resilience than when you’re taking on an investment with more unknowns. In this episode, Phil and Danielle discuss how your perspectives can change over the years, and how expanding and refining your circle of confidence can use that change to your advantage. If you’ve found your circle of competence and you’re ready to invest, click here for your free copy of How To Pick Stocks: The 5-Step Checklist for help with identifying which businesses are right for you: https://bit.ly/3ros8mU Topics Discussed: Figuring out “wonderful” Qualitative vs quantitative analysis Continuous education Circle of competence Finding your “one thing” Rule #1 of investing Resources Discussed: Groundhog Day City Slickers Learn more about your ad choices. Visit megaphone.fm/adchoices

To novices and outsiders, the practice of investing can appear intimidating and overwhelming.  However, despite the seemingly high barriers to entry and understanding market dynamics, an investor’s IQ matters less than their ability to be disciplined, patient, and emotionally detached from their investments. In fact, this applies even more to newcomers than it does to seasoned investors, as working with more capital can make it difficult to find impactful investments compared to a modest portfolio.  As you grow in your investing practice, those added complications can be countered by an expanded circle of competence and deeper market knowledge. This week, Phil and Danielle discuss how an investor’s mental state and learned habits can aid their investing journey more than their sheer brain power.  They also dig into the ongoing antitrust trial over Google’s practices and what the outcome could mean for the tech world. For more insights on the fundamentals practiced by Buffett and other investing greats, make sure to get your free copy of these 6 Market Crusing Investing Principles :  https://bit.ly/45szJ2v Topics Discussed: Jim Simons/Renaissance Technologies Amazon founding Buffett’s change of heart re: Apple Reliance on China IQ vs hard work Circle of competence Google antitrust cas Lina Khan Differentiating between short- and long-term problems Fiat/Ferrari Resources Discussed: Mohnish Pabrai on Ferrari Gemini (Google AI) Learn more about your ad choices. Visit megaphone.fm/adchoices

As value investors, we aim to identify and monitor exceptional, well-managed companies that dominate their industries, effectively operating as unique monopolies. A good starting point is using Google to gather basic insights—stock charts and financial summaries provide a broad overview. From there, explore their reports to assess transparency: are they forthcoming with information, or does it seem like they’re withholding details? Finally, conduct a deep analysis to determine whether the company aligns with your values and investment philosophy. In this follow-up to the previous episode's discussion, Phil and Danielle return to Terumo to talk through a recent application of their research process. For help to find the right business to start your own deep dive, don’t miss your free copy of the “3 Circles” Exercise Guide:  https://bit.ly/3LOexg2 Topics Discussed: Buffett selling stock Treasury bonds and P/E ratios Boeing woes Rule of 72 Terumo OTC companies Resources Discussed: All In podcast Rule #1 by Phil Town Invested by Danielle and Phil Town Learn more about your ad choices. Visit megaphone.fm/adchoices

Modern tools and technology have transformed company analysis and given the general public easier access to a wealth of information to inform their investments. Determining the true metrics of a business is indispensable in value investing, which relies on balancing long-term trends with short-term market spikes. Discover why thorough research and decisive action are key to uncovering value in today’s fast-paced markets, offering timeless insights for smarter investing. Join Phil and Danielle as they analyze Terumo, a leading medical technology company, and explore its fundamentals via key investment principles and the impact of consistency in financial data. To learn more about the philosophy behind Rule #1, click here for sample audiobook chapters from our NYT best sellers: https://bit.ly/3N21M18 Topics Discussed: Thanksgiving Terumo Increased access to information Rule of 72 Windage Resources Discussed: InvestED on YouTube Learn more about your ad choices. Visit megaphone.fm/adchoices

We all know the ever-popular key to financial success in the 21st century: just get your coffee/avocado toast at home and quit wasting all of your money! While there’s something to be said for limiting unnecessary impulse buys, the benefit of small wins in our daily lives isn’t something that we should overlook.  While the #1 rule of investing is “don’t lose money,” it’s important for each investor to decide what “losing” money means to them. Join Danielle as she checks in for the beginning of this holiday season and talks through her idea of what it means to set yourself up for success no matter what. For a better understanding of your own investing profile, click here to take the Rule #1 Investing Personalities Quiz:  https://bit.ly/468F8eW Topics Discussed: Gift giving “Either way” account Learn more about your ad choices. Visit megaphone.fm/adchoices

We’re back! After several weeks away from the podcast studio, our hosts are back together to cover their tumultuous October. From incapacitating sickness in Europe to lively nuptials in Belo Horizonte, all set against the backdrop of one of the wildest election seasons in recent US history, it’s been an eventful autumn. Phil and Danielle also speculate on the potential economic forecast under the next administration, and what deficit spending from either party could mean for future markets. Following years of high inflation, what results could more government spending bring in the years ahead? Valuation is a critical part of the investment process. For help with calculating a company’s market capitalization so that you can make smarter investing choices, click here for your free copy of Understanding Market Capitalization: https://bit.ly/44p1xE9 Topics Discussed: The Algarve COVID-19 Brazilian weddings Chuckwalla Valley Raceway Porsche Owners Club The 47th presidential administration Government spending Inflation hedges Nixon and the gold standard Carter and interest rates Learn more about your ad choices. Visit megaphone.fm/adchoices

If there’s one thing that can be said for certain in the closing months of 2024, it’s got to be that we’re seeing the fulfillment of an apocryphal Chinese curse: “may you live in interesting times.” Although global events like wars in Ukraine and the Middle East have shaken the stock market, Phil argues that uncertainty in the investment climate presents the best opportunities for investing. Tune in to this episode of InvestED where Phil and Danielle discuss when and if you should invest in an uncertain investing environment, how to take advantage of lower prices, and how to find antifragile companies. Learn where to find antifragile companies with Phil Town’s Ultimate Stock Market Crash Survival Guide. Get your free copy of the guide now: https://bit.ly/3xNXFlf Topics Discussed: Investing with uncertainty Finding antifragile companies Markets responding to the war in Ukraine Depressions and recessions Inflation and buying power Resources Discussed: Ray Dalio signaling 100 year depression Antifragile: Things That Gain from Disorder Learn more about your ad choices. Visit megaphone.fm/adchoices

As we rapidly approach November, one topic seems to suck up all of the oxygen in terms of current events—and it’s not Thanksgiving. No one knows what will happen after the election, but given the razor-thin margins and the heated political climate in America, turbulence is likely. To succeed in investing long-term, focus on buying solid companies that meet Rule #1 criteria and are “on sale.” Many people struggle with this due to stress, market fluctuations, or other distractions. Managing your emotions is key to making rational investment decisions, which depends on how well you take care of yourself. Stress and fear lead to poor choices, so practice staying mindful, whether through meditation, exercise, or reading, to keep a clear head and avoid emotional decisions. On this Vault episode pulled from the last presidential election cycle in the US, Phil and Danielle discuss the negative effects of stress on one’s investing practice and how mitigating that stress can improve your well-being in addition to your portfolio. For more help with avoiding costly investing mistakes, click here to get a free copy of 10 Do’s and Don’ts of Successful Investing: https://bit.ly/3XyEDbD Topics Discussed: COVID-19 Li Liu Self-improvement and self-discovery Ralph Lauren Tesla Circle of competence Dealing with stress Transcendental meditation  Resources Discussed: The Seven Storey Mountain For Love of the Game Turtles All the Way Down Learn more about your ad choices. Visit megaphone.fm/adchoices

It’s a tricky practice for value investors to navigate through the sea of potential investments. While large, successful businesses can be tempting at the right price, the steps taken to achieve or maintain that success might come with negative environmental and/or societal costs. Given the global dominance of some of the big tech companies in 2024, it might seem like the Amazons and Googles of the world are here to stay. However, issues like misplaced investments, anti-competitive behavior, and a myopic view of the future have seen industry giants topple in the past. This week, Phil and Danielle grapple with the growth dilemma faced by successful companies, and what that can mean for your portfolio as a value investor. To see more sustained growth in your own investments, click here for your free copy of the Rule of 72 Cheat Sheet: https://bit.ly/47awVb6 Topics Discussed: The American Dream Investing in “big” companies City life vs small town life Competition and ethics Sprouts TikTok Resources Discussed: The Anxious Generation by Jonathan Haidt Learn more about your ad choices. Visit megaphone.fm/adchoices

For any publicly traded company, the bottom line is going to be the driving factor in every major decision that gets made at the corporate level.  With US tax rates fluctuating between administrations and shake-ups in the Eurozone, it can be like a game of cat and mouse between governments seeking to collect taxes and the companies doing everything they can to avoid those taxes. As stakeholders in a business, investors don’t just own a stock—we own a portion of the actions that are taken by that company.  With the rise of the internet and easier access to up-to-date information around the world, the social component of investing has become a major factor for many in the market. In this continuation of last week’s topic, Phil and Danielle discuss the headquarter dilemma that some corporations are wrestling with and weigh the costs and benefits of activism in the corporate sphere. If you’d like to gauge your own investing knowledge and learn how to improve your investing practice, click here to take the Rule #1 Investing IQ Quiz:  https://bit.ly/3XL7URR Topics Discussed: Corporate tax rates Companies moving out of the US Apple’s Ireland woes Business ethics in investing DEI initiatives/reversals Bud Light controversy ESG Learn more about your ad choices. Visit megaphone.fm/adchoices

Cryptocurrency, as a volatile and emerging technology, is used by millions around the world. Some of those users are trying to find security amidst unstable financial situations, while others seeking to avoid government oversight or conduct more nefarious activities. Its decentralized nature offers both opportunities and risks. The ultra-wealthy, facing heavy taxation, often protect their assets through investments, relocating funds, or even engaging in deception. Meanwhile, multinational corporations hold immense power, frequently manipulating markets and governments, creating widespread challenges for economies and individuals. Staying abreast of developments in this nascent field is beneficial to investors, as the volatility in crypto markets can distort valuations and complicate the search for long-term investments. In this week’s episode, Phil and Danielle delve into the crypto scene and discuss how the tech sector seems to always be a step ahead of regulators. For further resources in identifying a company’s long-term trajectory, click here for your free copy of The 5 Moats Investment Guide: https://bit.ly/3Kmb33J Topics Discussed: Daily dives into trade publications Tether Goldcoin Apple’s Ireland tax troubles Coach/Michael Kors merger Resources Discussed: WSJ NYT Barron’s All-In Podcast Learn more about your ad choices. Visit megaphone.fm/adchoices

Debt plays a significant role in determining the value of a company. But how can you accurately assess the worth of a business you're interested in when it's burdened with debt? In last week’s Vault episode, Phil and Danielle explored this issue through the lens of Liberty Media Corporation’s acquisition of Formula One Racing. Building on that discussion, they take a deeper dive into using the 10 cap formula to uncover a company’s true value—debt included—and help investors make smarter decisions. They also touch on the inherent unpredictability of investing, using Tesla’s past and future as a prime example of the uncertainty you should always anticipate. For some Rule #1 tips on dealing with debt in your own financial life, don’t miss your free copy of our Get Out of Debt Checklist: https://bit.ly/3TjolSK Topics Discussed: Value Investing Factoring debt into investment opportunities The 3 Fs of shorting Unpredictability in investing Resources Discussed: InvestED by Danielle and Phil Town Investing Lessons from Formula 1 Learn more about your ad choices. Visit megaphone.fm/adchoices

When you invest in a business, do you really know who’s pulling the strings? Are you aware of the leadership team and how their choices could significantly influence the outcome of your investment? Take Formula 1, for example. Owned by Liberty Media Corporation, it stands out as a rare opportunity for sports fans to invest in the sporting world. But is it a wise addition to your portfolio? Phil and Danielle explore the increasing popularity of Formula One and discuss the factors that could make stocks like this a good fit for your investment strategy. They break down the first step of their investment approach, using Formula One's background as a case study to demonstrate why it’s essential to fully understand the business behind any stock before making a purchase. If you want a greater degree of certainty with your next investment, download The Four Ms for Successful Investing for help finding the right business at the right price: https://bit.ly/3LhVUAR Topics Discussed: Warren Buffett’s investing strategies Value investing Real-life investing Investing in Trusted Management Formula 1 Stock Resources Discussed: The Innovation Stack Bill Ackman’s 8 Principles Phil’s Go-To Investing Checklist Learn more about your ad choices. Visit megaphone.fm/adchoices

In an era of fast fashion and planned obsolescence, companies that stand behind their products in the long run seem to few and far between. A company’s warranty policy can be enlightening as both a consumer and an investor, and can also inform us about the customer base in that industry. With some businesses updating their former “lifetime” warranties to cover shorter periods of time, how can we know whether those changes are due to declining quality or potential abuse from customers trying to take advantage? Join Danielle as she takes a look at a new policy from one of her favorite companies, as well as some other examples from well-known companies, and what that means for the value investor. If you’re in the early stages of your investing journey, click here for a free copy of The Complete Guide to Investing for Beginners: https://bit.ly/3MBzewf Topics Discussed: lululemon warranty policy change Aldi Dr. Martens Patagonia return/repair policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Investing in a great business can sometimes feel like a personal relationship, and much in the same way as breakups can be incredibly difficult, making the decision to exit a position can cause the same doubt and heartbreak as splitting with a romantic partner. Likewise, the same issues that can arise in interpersonal relationships–keeping secrets, communication breakdowns, divergent goals–can lead to deterioration of trust and change the dynamics of what would otherwise be a long-term investment. It is critical for successful value investors to have the ability to reevaluate positions when new information comes to light, regardless of their prior feelings about a given company. This episode of InvestED finds Phil and Danielle offering a candid analysis of recent developments in Phil’s own investments, and what lessons can be learned when you’re buying into a business with the objective of holding it through the ups and downs that come over the years. Whether you’re seeking a new company to buy or deciding whether an existing investment is staying true to your initial assessment, get your free copy of the Must Have Investing Checklist to avoid unnecessary risk in your portfolio: https://bit.ly/49bSWZ7 Topics Discussed: Paris Olympics Athletic sponsorships Bank OZK concerns Difficulty in reevaluating positions VIX Learn more about your ad choices. Visit megaphone.fm/adchoices

At the end of the 1970s and the early 1980s, a decade of financial instability and high inflation rates led Warren Buffett to ponder the correct path forward for Berkshire Hathaway in his letters to shareholders. His solutions in those years could hold some valuable information for investors as we find ourselves once again in turbulent times. While the financial, societal, and cultural contexts have drastically changed over the course of three and a half decades, the underlying business principles and inherent behavioral characteristics can offer insights into how wise investors can find success during times of uncertainty in the modern world. This Vault episode offers us a glimpse into both the recent and not-so-recent past as Danielle considers how a post-pandemic world can benefit from Buffett’s wisdom following one of the most volatile decades of the 20th century.  For help with protecting your investments in unstable markets, get your free copy of the Rule #1 Inflation-Ready Checklist: https://bit.ly/3yyrDdS Topics Discussed: Berkshire Hathaway shareholder letters Inflation in the 70s/80s Indexing investments to inflation Investing into companies with little debt Prioritizing gains in purchasing power over earnings Post-housing bubble concerns related to 30 years prior Anti-fragility Resources Discussed: DanielleTown.com Buffett’s 1979 letter Buffett’s 1980 letter Buffett’s 1981 letter Buffett’s 1983 letter Buffett’s 2010 letter Learn more about your ad choices. Visit megaphone.fm/adchoices

Investing in companies that interest you can be more engaging and rewarding on a personal level, but it may not always align with long-term financial success. A core aspect of value investing lies in identifying companies that are undervalued but have strong potential for future growth, even if their business is less fascinating. Additionally, aligning investments with personal values and the way you see the world ensures that your portfolio reflects your beliefs and principles. With a limited lifetime portfolio, it’s crucial to balance passion-driven investments with those that have a solid track record of stability and growth. It makes sense that many people are drawn to flashy consumer-facing businesses, but those aren’t necessarily the best move for every investor. In this continuation of the utility of expert networks, Phil and Danielle discuss how and why value investors might place restrictions on their research process in order to find the best companies to buy, even if it doesn’t fully match their personal passions. If you’re searching for the next business to add to your portfolio, click here for an assortment of Rule #1 investment calculators that can help you identify key metrics in your research process: https://bit.ly/3A57OeC Topics Discussed: Expert help “Buying companies” vs buying stocks Buffett’s punch card 10-K reports Resources Discussed: SBA SCORE network Learn more about your ad choices. Visit megaphone.fm/adchoices