Jump to content
House Price Crash Forum

Rule #1


Recommended Posts

0
HOLA441

Been reading Rule #1 by Phil Town. In this book he constantly make's references to Buffett and Rule #1 -"Don't lose money".

He also talks about 15% returns year on year and how compound interest will make you rich. I understand all this but still have a problem with the ease at which Phil thinks talks about never taking losses. :blink:

I can't help thinking that guys like Buffett knew more than us mortals - like being inside.

Does anyone know exactly how Buffett became the most successful investor to have walked the earth??

Rule #1

Edit - tt :rolleyes:

Edited by Wait & See
Link to comment
Share on other sites

1
HOLA442
Been reading Rule #1 by Phil Town. In this book he constantly make's references to Buffet and Rule #1 -"Don't lose money".

He also talks about 15% returns year on year and how compound interest will make you rich. I understand all this but still have a problem with the ease at which Phil thinks talks about never taking losses. :blink:

I can't help thinking that guys like Buffet knew more than us mortals - like being inside.

Does anyone know exactly how Buffet became the most successful investor to have walked the earth??

Rule #1

Population growth

Link to comment
Share on other sites

2
HOLA443
3
HOLA444
4
HOLA445
5
HOLA446
6
HOLA447

Well Buffett lived all through the biggest bull in history, he also had the common sense to invest in undervalued areas others avoided (ie bear market pessimism). Part luck, part skill.

Edited by domo
Link to comment
Share on other sites

7
HOLA448
8
HOLA449
9
HOLA4410
Been reading Rule #1 by Phil Town. In this book he constantly make's references to Buffet and Rule #1 -"Don't lose money".

A far more enlightening quote that I'm aware is a saying of Buffet's (rephrased owning to a poor memory):

Buy, or - if possible - invest in what you need/want.

I thought that was quite insightful - it recommended buying the things you think would benefit yourself at some point in the future rather than predict what will benefit other people and hence go up in price.

It stood in stark contrast against the BTL mantra at the time: "I know you wouldn't want to live there - but that's not the point with BTL."

I like that buffet wants to invest in equities that he wants to keep for their own worth - not because he believes someone else will be willing to bid a higher price in future... that's a side effect.

Edited by A.steve
Link to comment
Share on other sites

10
HOLA4411
11
HOLA4412
12
HOLA4413
Boxes and boxes of OPM.

(Other Peoples Money)

Yes "OPM", AKA levergae to most people, the acronym that seems always to go with "financial freedom". I have seen so many times in BTL sites - they really think that the writers of self -help books and those the pay money to listen to at seminars invented leverage. I mean, I have had several people tell me that property is better asset class because it is the only one you can use "OPM" with. The ignorance is breathtaking - when I tried to tell them that leverage was far more efficient in other asset classes, and was the basis for all derivatives, they simply wouldn't believe me... There is no oncvinction stronger than one which someone wants to have.

Link to comment
Share on other sites

13
HOLA4414
A far more enlightening quote that I'm aware is a saying of Buffet's (rephrased owning to a poor memory):

Buy, or - if possible - invest in what you need/want.

I thought that was quite insightful - it recommended buying the things you think would benefit yourself at some point in the future rather than predict what will benefit other people and hence go up in price.

It stood in stark contrast against the BTL mantra at the time: "I know you wouldn't want to live there - but that's not the point with BTL."

I like that buffet wants to invest in equities that he wants to keep for their own worth - not because he believes someone else will be willing to bid a higher price in future... that's a side effect.

Nice idea but I don't really buy it. Warren Buffet is the most successful investor ever quite simply because it has to be someone . Of all the people in the world investing over the past 40 years: someone got it wrong all the time and failed miserably, someone got it wrong more often than right and failed a lot, someone failed as often as they succeeded and made nothing, someone succeeded more often than they failed and so end up with something, someone succeeded most of the time – and his name happens to be Warren Buffet. It seems remarkable that someone is so successful but that’s simply because no one knows the names of all the failures.

The same could be true of tossing coins – someone, somewhere is the world’s biggest tosser.

Link to comment
Share on other sites

14
HOLA4415
15
HOLA4416
16
HOLA4417
Nice idea but I don't really buy it. Warren Buffet is the most successful investor ever quite simply because it has to be someone .

With this, I agree. I also think that Buffet shows such significant above-average returns mainly because Buffet is the most successful investor - which subliminally affects market participants.

While his status doesn't make his advice (the bit I remembered) ill founded. I think that is a universally good idea - simple and effective as a philosophy. It won't make you as rich as Buffett, but it might save you from the sort of fate facing over-leveraged BTL scumlords.

Link to comment
Share on other sites

17
HOLA4418
Yes "OPM", AKA levergae to most people, the acronym that seems always to go with "financial freedom". I have seen so many times in BTL sites - they really think that the writers of self -help books and those the pay money to listen to at seminars invented leverage. I mean, I have had several people tell me that property is better asset class because it is the only one you can use "OPM" with. The ignorance is breathtaking - when I tried to tell them that leverage was far more efficient in other asset classes, and was the basis for all derivatives, they simply wouldn't believe me... There is no oncvinction stronger than one which someone wants to have.

Exactly, man!

Nice idea but I don't really buy it. Warren Buffet is the most successful investor ever quite simply because it has to be someone . Of all the people in the world investing over the past 40 years: someone got it wrong all the time and failed miserably, someone got it wrong more often than right and failed a lot, someone failed as often as they succeeded and made nothing, someone succeeded more often than they failed and so end up with something, someone succeeded most of the time – and his name happens to be Warren Buffet. It seems remarkable that someone is so successful but that's simply because no one knows the names of all the failures.

The same could be true of tossing coins – someone, somewhere is the world's biggest tosser.

This is such an excellent point. I haven't read the book, but believe this concept is covered in Nassim Taleb's "Fooled by Randomness".

Someone is going to walk in to the Las Vegas Sands with $20.00 and walk out with $1,000,000. It could be Joe Schmuck or Sweet Fanny Adams. The difference is that in Las Vegas, we all know it is down to luck. On Wall Street though certainly skill is a prerequisite, the role of luck is disregarded - wrongly in my view.

Buffett has great priciples for investing, but certainly there are folks whose skill is equal or superior,who never achieved the success, because of "happen-stance".

Link to comment
Share on other sites

18
HOLA4419
19
HOLA4420
Rule #1 -"Don't lose money".

Its quite a common concept.

When I were a young lad my basketball coach would tell of his proudest game - when the person he was marking didn't score a single point. He'd then go on to point out that if the opposition never score the worst result you have is a draw. Applies to all sorts of situations.

Of course the trick is how to guarantee you never lose money. Bet the book doesn't tell.

Link to comment
Share on other sites

20
HOLA4421
21
HOLA4422
22
HOLA4423
The first book is better IMO

Thanks Noel, maybe I should give it another go.

Did you find that in TBS he takes about 15 pages to say something really obvious, having taken care along the way to repeatedly point how many languages he can speak, how loaded he is and that everyone he's ever met is completely wrong about everything?

Link to comment
Share on other sites

23
HOLA4424
The first book is better IMO

Really, I read both back-to-back (chronological order) and found the first to be a bit dull slow... the second (The Black Swan) seemed to revise all the ground from the first in a clearer more succinct way.

Both were interesting, but I'd recommend The Black Swan if you've only time to read one of them.

P.S. While some of the stuff Taleb said was obvious, I liked it still. I don't think he taught me any new mathematics - but he did bring maths I'd learned as if by rote in the past to life - and made me feel comfortable when faced with the challenge of establishing whether mathematics has been applied correctly to a practical situation - or otherwise. I think it's a book that presents an overall intuition - as opposed to a book that gives you a jump start with facts and theorems.

Edited by A.steve
Link to comment
Share on other sites

24
HOLA4425
Thanks Noel, maybe I should give it another go.

Did you find that in TBS he takes about 15 pages to say something really obvious, having taken care along the way to repeatedly point how many languages he can speak, how loaded he is and that everyone he's ever met is completely wrong about everything?

Yes. I'm not sure if he deliberately attempt to rub people up the wrong way. When I get the chance I'm going to go along to one of these

http://paul.wilmott.com/seminar.cfm

to see what he is like in person

Others are also not overly impressed with his latest work

http://www.nuclearphynance.com/Show%20Post...ostIDKey=115922

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information