Richer, Wiser, Happier 
William Green

Summary

Timeless investing lessons from some of the greatest investors in the world

Notes

The crowd is always wrong

Watch out for momentum

Never borrow money to buy stocks

Pick your 10 best ideas, study them like crazy

Hope is not a method - know exactly what you’re buying

Know where your edge is (healthcare)

As long as you have faith in you, nothing will abstract you

Just copy the best ideas other people have figured out

Know the rules of the game

• You’re buying a business
• The market is a voting machine with prices that don’t make sense
• Only buy a stock when it’s less than your conservative estimate

Only buy stocks when values are so low relative to what you think

Fish where the fish are. Go to where there’s value, everything else is noise

Be patient and let the bargains come to you

Keep a solo investment advisor - you. As soon as people come onboard, you’re going to change how you act

Say no to almost everything

If something is not an obvious double in a short period of time, leave it

Avoid anything w/ financial statements that are too difficult

Simplicity rules

Be patient and selective

Make bets w/ minimal downside and significant upside

Never deal w/ leverage and impatience. Compound over long periods of time

Don’t meet w/ CEOs you’re investing in, understand the numbers

Take a simple idea and take it seriously

You have to have a willingness to be lonely and take positions other people don’t like

When you stick your neck out, you have to be self-confident enough to do it

Don’t listen to experts and trust their opinions

In the darkest of times, never forget the sun always rises

Templeton’s 6 investing principles:

• Beware of emotion is investing
• Because of your own ignorance - research as much as you can
• Diversify to protect against your own ego
• Successful investing requires patience
• Study assets over the last 5 years to find bargains
• Do not chase fads - focus on value

Choose where to place your focus because what we focus on expands

Change is inevitable, the only constant is impermanence 

Being intelligent is nothing but luck

Always buy cheap and never overpay

Don’t invest in dreams, invest in what’s tangible today

The cycle of the market is always predictable

The environment is what is it - act accordingly

‘Skepticism calls for pessimism when optimism is excessive. But it calls for optimism when pessimism is accepted.’

Cycles always reverse and reckless excess will be punished

Humility, skepticism and prudence are key to long term financial success

Because the future is uncertain, always minimize risk

Many shall be restored that now are fallen and many shall fall that are now in humour

Do not cave to external pressures

Create a closed end vehicle so you can’t have redemptions

Always keep enough cash on hand so you can never go bust

Secret to investing is ‘safety’. Always think how much you could lose

Build a portfolio that can withstand various states of the world

Don’t add fragility to your portfolio (bad balance sheets, too much leverage, too much debt, bad mgmt teams)

Beauty lies in the mundane businesses, not the glamour

Invest when the company is 30% less than intrinsic value

Rules of resilience:

• Respect uncertainty
• Eliminate debt, avoid leverage and don’t spend excessively
• Become shock resistant, avoid ruin and stay in the game
• Beware of overconfidence and complacency
• Beware of exposure to risk and require a margin of safety

Figure out what something is worth and pay a lot less

STOCKS FOLLOW EARNINGS

The way you’re going to find bargains is search for places others don’t want

Buy good businesses at bargain prices

Scale economies shared can turn into great business (amazon, costco, etc.)

Resist the external and internal forces that make you act impulsively

Make your mistakes non-fatal

Live on less than you make. Invest the difference

To attain knowledge, add things. To attain wisdom, subtract things

Figure out what not to do first

Know what you own

Think about your own limitations

Find disconfirming evidence against your ideas

Start with ‘why am I wrong?’

Everyone messes up or gets unlucky, it’s part of the game

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