Warren “the Buff” Buffet and Charlie “Mung Man” Munger – Investors and Gurus

It is not unusual for Warren Buffet to expand on his thoughts on investing. Every year his investment company Berkshire Hathaway reviews the last 12 months and gives a fair chunk of investment thinking according to Warren Buffet and his distinguished offsider Charlie Munger. The full 2019 year letter is here.

Year after year the advice is remarkably constant.

“What we can say is that if something close to current rates should prevail over the coming decades and if corporate tax rates also remain near the low level businesses now enjoy, it is almost certain that equities will over time perform far better than long-term, fixed-rate debt instruments.”

Warren Buffet

Paul Keating – Ex Prime Minister, financial reformer and Australian Superannuation founder

Paul Keating is an established Slack Investor hero for helping to modernise Australia’s economy and also introduce compulsory superannuation back in the early 1990’s. He has certainly not lost his ability to cut through with memorable quotes. In amongst the barbs at his latest Press Club interview was a compelling message for the need to feel comfortable with Australia’s place bordering Asia. Keating stressed the positive aspects of Australia’s potential for engagement with the region, particularly with Indonesia and China.

Jack Bogle – Founder of Vanguard

Farewell John C. (Jack) Bogle … and great thanks

An established Slack Investor hero, Jack Bogle died this month aged 89. The founder of Vanguard, he was a great friend to all investors. Warren Buffet was asked to comment on his passing
“Jack did more for American investors as a whole than any individual I’ve known”

A fitting tribute to his achievements can be found on the Vanguard site.

The finance industry has for a long time gouged the ordinary folk with fees and layers of complication. Before Jack Bogle, mutual funds were setup to manage other peoples money for a profit. In 1975, it was common to charge the punter 1-2% for the privilege of managing their money – This is $100-$200 for each $10000 invested for yearly management! There was also a range of other investment fees which could amount to 4% of your initial sum. Investments would be have to be arranged through “brokers” who would also take a slice. The “Vanguard Experiment” set up an independent mutual fund that operated “at cost”. He introduced the first low-cost index fund that followed the top 500 US stocks. Vanguard now has 20 million investors and manage over $5 trillion in assets.

“If a statue is ever erected to honor the person who has done the most for American investors, the hands down choice should be Jack Bogle. For decades, Jack has urged investors to invest in ultra-low-cost index funds … In his early years, Jack was frequently mocked by the investment-management industry. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.”

Warren Buffet – from his February 2017 Letter to Shareholders

Karen Chester – Productivity Commission

I have been a fan of Australia’s Productivity Commission (PC) ever since I read their 2010 report into the sorry state of Gambling in Australia. The report is full of thought provoking and shameful material like- Australia is the world leader in  number of poker (slot) machines per capita and Australia leads the world in gambling losses per person – but I digress…

The PC have just delivered their draft report on the state of Superannuation in Australia. God bless them .. they have put in “black and white” the rorts that exist in Australia’s good but not great superannuation system – and they have created a new Slack Investor hero.

The lead author in the report is the Productivity Commission deputy chair Karen Chester who has delighted Slack Investor with the following refreshing quote. Ms Chester’s attitude  was like a snowball in the face after the my last depressing post on the mostly self interested world of banks and financial advisers.

“the only thing I care about is member outcomes” 

Karen Chester from source

Sir John Templeton – Fund Manager and Investor

John Templeton (1912 – 2008) was a great investor, fund manager and philanthropist. He is best known for setting up the Templeton Growth Fund which averaged returns of over 15% per year for 38 years. Slack Investor salutes this kind of behaviour and listens when great investors say something. 

“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”

 Sir John Templeton

Mr Money Mustache – Blogger

One of the original bloggers about Financial Independence. Under his real name, Pete Adeney, he “retired” at age 30, The great financial blogger Mr Money Mustache was a pioneer in financial blogging. He was one of the first to publish the simple mathematics of retiring early. The effect that savings rate has on the number of years that you have to work until you can sustainably generate your expenses from your investments.

Colin Nicholson – A Great Australian Investor

I have a few people that have greatly influenced my investing life – One such figure is Colin Nicholson. I have never met him, but he has taught me a vast amount through his long running website “Building Wealth Through Shares” (bwts.com.au).

This great Australian investor Colin Nicholson, has been investing for over 50 years and documenting his adventures with shares since 2001 on his site. Colin has only stopped actively contributing at the end of 2019. Fortunately, this website is still running and his knowledge and experience keeps on giving. As well as education material on technical and fundamental analysis, he often discusses the psychology necessary to be a successful investor.

We tend to have an impulse to snatch profits quickly and to let losses run, hoping things will come good if we hold on. This natural impulse is the exact opposite to what a successful investor must do.

Colin Nicholson

Kenneth Hayne and Rowena Orr – Australian Royal Commission into the Financial Services Industry

Established Slack Investor Hero Royal Commissioner Kenneth Hayne wraps up his enquiry into the finance sector after 8 gruelling months and 770 000 documents. and concludes his epic and momentous gathering of evidence. His interim report has suggested big changes to a flabby and rorting finance industry.

Through persistent effort, a new Slack Investor rolled gold Hero has also emerged. Senior counsel assisting the commission, Rowena Orr QC has covered herself with glory from the Royal Commission fray (With a special mention to her alternate senior counsel Michael Hodge, QC).

Through persistent effort and an understated forensic style , Ms Orr has been responsible for grilling a parade of witnesses to reveal a shabby record of commissions, bribery, unfair payments, improper board oversight and rorts that have brought shame to the Australian Finance Industry.

… marshalling her facts patiently, leaving people in the witness box with nowhere to run from her logic, where they don’t know they’ve been filleted until they leave the room 

 from The Guardian

Isaac Newton – Physicist and Mathematician and Genius

A hero of Slack Investor’s, and not a bad scientist and mathematician, Isaac Newton became involved in this saga as an investor – and as it turned out, an extremely bad investor. The quote below comes from the updated version of Benjamin Graham’s  “The Intelligent Investor,” by Jason Zweig.

“Back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he ‘could calculate the motions of the heavenly bodies, but not the madness of the people.’ Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price — and lost £20,000 (or more than $3 million in [2002-2003’s] money. For the rest of his life, he forbade anyone to speak the words ‘South Sea’ in his presence.”

Albert Einstein- Physicist and Genius

Everyone has heard about Albert Einstein – The theoretical physicist that came up with the famous relationship between Mass and Energy ( E = Mc² – where c is the speed of light in metres per second). He also came up with ground breaking work in relativity and quantum mechanics. As a student of physics in my younger days, Slack Investor was in awe of this wild-haired genius but, even understanding the very basic concepts of general and special relativity at university … just made my head hurt.

“There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle.”

Albert Einstein

Einstein had a brilliant mind, the 1921 Nobel prize winner was instrumental in developing new ways of looking at energy, time, space and gravity. He often would construct a “thought experiment” to help him visualise the difficult concepts that he was tackling.

Chris “The Brick” Brycki – Investor and founder of Stockspot

Chris (and Stockspot) have come up with the breathtakingly simple, yet genius, strategy. By researching thousands of ETF’s and, based on exposure, performance and low fee costs – selecting just 5 of them as the building blocks for a range of different portfolios that are based on risk tolerance, financial situation and appetite for volatility. The five building block ETF’s are in Australian Shares (VAS), Global Shares (IOO), Emerging Global Markets(IEM), Australian Fixed Income (IAF), and Physical Gold (GOLD).

Slack Investor has written about Stockspot before in terms of Robo Advice and their Superannuation reports. By using these 5 ETF’s in various combinations, Stockspot is able to give their customers the best possible combination of returns, risk and costs.

Stockspot does not earn fees from or have a commercial relationship with the ETFs we recommend. We don’t pay professionals for recommending our service to their clients.

Stockspot

Well done Chris Brycki (and Stockspot), for advancing the investing cause with particular attention to keeping the fees down … you are a Slack Investor Hero.