GMR 162: Become a Better Investor with Alex Mason

Show Notes


What you will hear in this podcast:


This thing that we call the stock market is really just this
auction system of buyers and sellers for these companies that you
and I use every day.


Learning that I can be a part-owner in these companies just by
buying a stock was just amazing to me, and that is what really
set me off on the journey.


Mental models are these thought experiences or ideas that can
help explain a concept, and the reason I find them important is
that they can really inform rational decision making.


In this life, there are maybe 100 or so really big ideas that, if
we grasp those ideas, will make us way better thinkers and
decision-makers.


One of the mistakes we new investors often make is we’re looking
strictly at the past performance to inform a decision about the
future.


We can’t pay for yesterday’s growth. We can’t also punish
yesterday’s declines either.


There’s a big difference between a company that has a big brand
name, something you recognize that you’re very familiar with
their products and services, and the actual steadiness of the
cash flow of that business.


What helps me is not forgetting as an investor what we’re
actually buying, what is the source of these returns, and where
is the money actually coming from.


One of the main sources of how I do my research is the 10K;
that’s an annual filing with the Securities and Exchange
Commission that every public company has to file on a yearly
basis.


You learn so much, even just sitting down and reading the annual
report for half an hour.


Combining that basic sense of valuation (PE ratio) with what I’ve
learned already about the company is what informs my decision.


If you’re a new investor and you want to get into the Market, by
all means, explore Index Funds and start putting money away for
your future, but if you do have an interest in learning about
individual businesses, I definitely encourage that as well.


At the end of the day, I want my families portfolio to exceed the
rate of the Market’s return, and if I can get 2 or 3% compounded
annually, that may not seem like much, but if you look over a 40
or 50-year period you’re looking at double or triple your net
worth, and that’s life-changing.


Resources


Alex Mason Website - stockstoryteller.com
Companies Studied -
https://stockstoryteller.com/podcast/companies/
Mental Models -
https://stockstoryteller.com/podcast/mental-models/
Budgeting tools and other free resources -
https://leosabo.com/resources
David’s website - www.stewardshippastors.com