My inflation strategy:

Own businesses with recession-proof demand and pricing power

I asked, “What book do you re-read the most?”

I received 441 replies

Here are 20 books that should be read again and again:

1/

7 Habits of Highly Effective People

by Steven Covey

2/

A Short History of Nearly Everything

by Bill Bryson

3/

As A Man Thinketh

by James Allen

4/

Atomic Habits

by @JamesClear

The 🔟 Most Important Money Lessons

I Wish I Could Teach My Younger Self 🧵

1⃣ ALWAYS live below your means

2⃣Developing a long-term mindset

is the foundation of financial success

3⃣In the beginning, your savings rate is all that matters

Eventually, your investing returns are all that matters

Focus your time accordingly

4⃣Financial freedom is achievable

The price is ~10 years of hardcore saving/investing

I asked, “What's the biggest valuation mistake you've ever made?”

I recieved 135 replies

Here are the 6 biggest valuation blunders to avoid:

1: Overemphasizing growth

No surprise to see this one at the top of the list

Many investors (including me) focus too heavily on top-line growth

Growth is important, but ONLY when combined with other factors like business model, financials, management, & moat

2: Not understanding the “hype cycle”

AI. Metaverse. 3D Printing. Cannabis. Fintech. IoT. Plant-based meat.

There are dozens of promising markets on the horizon

If you choose to invest in them, you should study this picture intensely

3: Buying bad companies because they are “cheap”

Just because a company has:
▪️A low P/E ratio
▪️A high dividend yield
▪️Fallen sharply from its 52-week high

Doesn’t mean it's "cheap"!

A "cheap" valuation won't save you if the business is crumbling

4: Not buying because of a “high” P/E ratio

I’ve made this mistake many times

Companies in phases 3 & 4 are not optimized for earnings, so the P/E can look “expensive”

You must consider where a company is in the business growth cycle before you judge the valuation

@SantiagoAuFund No. This is what they will likely eventually be forced to do to avoid such an outcome.

The last time inflation was this high was Nov 1990

Then:

Inflation 6.3%
2 year treasury yields 7.8%

Now:

Inflation 6.2%
2 year treasury yields 0.4%

Which scenario is worse?

I guess it depends if you're a saver or a borrower?

Smart-sounding reasons to sell as the market rose:

h/t @morganhousel

Hello $29 trillion...

https://t.co/XgZmSZVGu0

The reported national debt has been stuck at $28.9 trillion as we hit the new "debt ceiling" back in October, only a few days after it was raised. It now needs to be raised again, with the next debt ceiling "deadline" on Dec 3. When that happens, we'll quickly hit $29 trillion.

@evan_lorenz Exactly this.

Plus in a gold-based system, smaller entities (SMBs or sole proprietors) could presumably even self-custody to reduce the carrying cost of gold to zero.

This is not possible with bitcoin, in which one owns a share of a collective and equally distributed liability.

The hilarity of all this, to me, is that Bitcoin makes the most sense if viewed as a Marxist worker’s rebellion.

The central promise is UBI: buy tokens that increase in value forever, granting you wealth for doing nothing.

And the cost is the future.