Invested audiobook

The author of this book Danielle Town is the 36 year old daughter of the succesful investor and 2 New York bestseller author Phil Town. Although Daniele Town is the daughter of Phil, she is a total dimwit in the investing world. This book is mainly focused on Novice investers, like myself which barely touched on the subject before. Danielle is a total beginner herself so she makes sure to break down every concept passing by into detail. Her background as a lawyer and law practice is very useful for her writing, because she is trained to write in great detail.Now I describe the various themes that passed by during Danielles 1 year story and touch upon what I learned from it.JanuaryThe first month starts off with Danielle battling her fears and reluctancy towards the finacial service complex. After some twisting she gets to the conclusion that she has to take care of herself. “Putting her nose to the corporate grindstone” wouldn’t provide her the happiness and financial freedom she is searching for. She wants to have choices, freedomBut her reluctancy wasn’t searching for a way out to get financial freedom without having to invest in the financial complex. There popped up two stategies to her mind1. Hoard. Just save money and only make the most conservative investments.2. Abdicate. Give her money over to a fund manager. These professionals were able to her money properly. The fee you have to pay is fair by abdicating the risk to lose all your money by your ownt fault.Phil explains the first option is not viable at all. This has to do with the general inflation rate (which compounds!) being higher than the interest on saving accounts.The second option ‘abdicate’ isn’t viable either. Because you’ll have to put in such a high minimum stake, the most of us even can’t bring to the table. This also applies to Danielle. Even when she wouldn’t want get her toes wet, her bank account was insufficient to meet the treshold criteria of fund corporations. Apart from that investing funds make barely more money than the “market” generally spoken. On top of the poor performance of fund corporations you have to pay a fee over the profit the make for you, which makes your actual profit even shrink more. This option is better than hoarding, but not adequate if your endeavor is real financial freedom, with a minimum principal to start with.FebruaryThe second month is about finding your “number”. This term is Phil using to give Danielle some insight and perspectives of amounts of money she needs to make in order the life she wanted. With various examples of calculations. Danielle gets straight how she approximately;1. Spend minimal a year to support her current lifestyle2. How money years she should invest3. How much money she should invest4. What the required rate of return should beMarchThe third month is about a aspect of investing which really resonates with me, namely voting with your money. Voting with your money basically means that you choose for products, services and missions from companies you like personally. This means bringing in your money is a form of empowering your favourite companies to expand even more and bring their products and/or services to even a broader audience. There can be specific industries or products on your list though or industries were you’re against.Some tips are provided to brainstorm about which products you’re concious or onconciously already voting for and which values you’re supporting.AprilIn April begins the eloboration on value investing, which is a red thread running through the book.We start off with a sprint through the first three principles, which are getting described more granular in the months following.There are 4 principles, which should be respected by a value investor1. One should understand a business to start2. The business should have intrinsic characteristics that give it a durable competitive advantage3. The business has preferably a management with talent and integrity4. It must be a business that can be bought for a prince that makes and gives a safety of marginSo first things first, Danielle is starting to draw a so called “Circle of competence”. Here you have to fill out three circles for yourself.1. What do I vote for with my money?2. Where do I make my money3. About what am I passionateAfterwards you’ll just look to where the circles are overlapping and tadaa you have a starting point of businesses you might invest in.MayThe second principle is hugely important. Once one understand the business is it time to determine if the business has a durable competitive advantage. There are a few characteristics to determine if a company has a durable competitive advantage and are referred to as moats.The five and (half) moats1. Brand. Some companies have such a strong brand, they can’t be wiped out from our landscape. Think of companies like Coca Cola, Microsoft and Amazon.2. Switching. It can be very difficult to switch or get away from a product for a customer. Think about the Apple products with their OS which is fully integrated through all their products. Sure you can switch from Apple to microsoft, but one will be deterred.2.5. Network effects. Is a subset of the switching moat. It has to do with the switching moat, but refers chiefly to the access to a particular network that one uses. You can unsubsribe from Linkedin for example, but you lose access to an powerful network and potentional connections when you do.3. Toll Bridge. A toll bridge refers to a company which has a monopoly in a niche market. Usually created by government regulations/intervention. But the cause can be geographic as well or driven by incredible costs to enter the market.4. Secrets. Some companies have proprietary secrets. The most well known in the secret recipe of Coca Cola. Although the recipe might have leaked multiple times, but Coca Cola can still held up the mythe that the recipe is secret and thus desirable. 5. Price. The last moat is the price moat. Some low-cost providers try to offer their products just a cheap as possible and have therefore a durable advantage relative to their competitors. Think about a companies like Ali Express or Costco.They touch lastly on the third principle; Management with integrity and talent.The following aspects can be taken into account when one assesses the management of a companyBiography: What is the background of the founder? How did he/she get there? What connections does the founder have?Management style: There is a lot of difference between Richard Branson and a “keep growth steady and low” typeFounder: When the founder already left a company, the current management could react to the departure of the founderBoard of directors: The board of directors hire and fire the management team. So it is necesarry to determine how they have handled those.Ownership: Some CEOs just want to leave the ship, before hell breaks loose. One should therefore ideally search for companies where CEO’s have a large shareholder stake.At the end Danielle presented a checklist to at least assess the first three principles against a company to determine if this company is wortwhile for investing purposes. JuneIn June Danielle investigates the companies which are in her circle of competence. In May Phil already teached about the big four numbers one should consider and assess a company against.These are the big four numbers:Thereby you have the following management numbers which are very relevant:1. Return on Equity2. Return on Invested Capital3. DebtSo Danielle started to assess her companies against these numbers and the management style, to give the reader more practical insight. Thereby she described how she started to look in her direct environment for companies where she might want to invest in. This month ends with Danielle facing her preconceptions about money and wealth by describing how her family history/past events have affected her relationship with money. Some of them were absolutely helpful, but some of them were hindering her to fully immerse herself in this investing practice and should get reduced/be taken away. One should determine for her- or hisself if any preconceptions are hindering them to fully immerse in their investing practice. This is not something I can relate with, but for others it might be helpful.JulyJuly is about the fourth principe of investing, namely pricing. One should only buy a price for a share that makes sense and has a margin of safety built in.Three methods of pricing/valuation are getting addressed:1. Ten Cap price (based on Owner Earnings)2. Payback Time price (based on free cash flow)3. Margin of safety valuation (based on earnings)These first two pricing methods are getting described in combination with some easy to follow examples. Normally you have the numbers which need to be filled in, already at your disposal from applying the first three principles. AugustAugust is all about value and calculating it with the margin of safety method. How can one determine the value of a company? The Margin of safety method is a very viable one for this.Purpose:Required numbers:- Earnings per Share- Windage growth rate- Price to earnings ratio- Minimum acceptable rate of returnThis method will explained thoroughly with different numbers and different kind of companies, before moving on to the next month.SeptemberAfter the calcultations of August, this month was dedicated to the inverting the story of a company. Necesarry to competely be certain if a company is the right one the invest in. Phil tries to keep Danielle away from making common investing mistakes by offering a list of expensive common errors which one should avoid at all costs.Before one could invert a story it is essential to write a story in the first place. A story should be written on the hand of the four principles mentioned earlier. So you have to basically write a story for a wonderful company you love and try to rebut it afterwards. Every reason to buy it, should get rebutted. It is recommended to ask for advice/discuss this with fellow investors or family members, because it is quite hard to invert a story you made for a company you love. But reasons to not buy a company should be absolutely clear.OctoberOctober is about building a antifragile portfolio.The underlying thought is that you as a value investor should wait till shit hits the fan and the prices of companies you have on your wishlist start to drop. Making use of fluctuations is where value investing is all about.When the moment is there, according to Phil it’s a best practice to buy in tranches (i.e. slices or portions). In the middle of an event its incredibly hard to call the bottom of a share price. An investor is not an fortune teller in any way. So if the price starts falling it is recommended to buy a first portion and to wait to see what the market is doing. If its dropping even more you can go ahead and buy a second tranch before you wait on how the market reacts, and so forth and so on. NovemberThe first month were selling comes into play. An value investor will actually never sell a company. This premise is advocated very frequently by Warren Buffet and Charlie Munger. However there is a reason when one have to sell a company. This moment is there, when the story of a company changes. Think about emerging technologies like navigation apps on the mobile phone, which replaces the TomTom entirely or the rise of Uber which had a big impact on the traditional cab driver industry. Thereby there can be a major shift at the management leading the company, which can one make lost trust in the company.But once again, one should try to stick as long as possible to stocks already bought.Initially it recommended to reduce the basis of the principal you brought to the table. So when you have invested for example $10.000 in a wine company, ongoing dividend payments can reduce this basis. But on the other hand it is not a good plan to buy shares for its dividends, because companies that are unhealthy can pay dividends just to give the impression they are financially stable and try to attract even more shareholders. In reality they can be in shambles and not trustyworthy at all (with the risk of losing all of your money cause of bankruptcy for example). Your basis gets reduced as well if companies buy back their own shares on the market. The value for the remaining shares will only rise as a result.So one sells only when inverting the story of the company leads to the conclusion that the story is not longer tenable.DecemberThe last month of Danielles practice is dedicated to provide tools to get her practice ongoing and being thankful for what she has achieved.An investor should always be aware of what is unknown, but this isn’t a constraint to be a succesful investor. When following the provided principles you’re not likely to make serious blunders, investing in multiple companies and well-vetted checklist are also a part of responsible investing. Danielle ends with a ongoing practice checklist which could be serve as a guidance once one has run through a investment practice.Conclusion:To me this book was very beneficial. I have never touched a book upon investing, so most of what I read was new to me. The reading style and supporting math examples and the reiteration of concepts made really clear what value investing is all about. Even when you don’t have a particular interest in investing this book will be probably also kind of compelling, because its so lively written and tangible.Rating 5/5

* One of the best books I have ever read* Largely Phil Town repeating his valuation techniques based on how Warren Buffet value companies but described by Danielle Town who gives valuable insights into common problems new investors face* Danielle writes beautifully and has a wonderful ability to put the reader at ease which is so usefel when talking about investing which often brings up a lot of emotions in beginners

I enjoyed the approachable tone that helped me to digest information and knowledge with ease from this book. I thoroughly appreciate how the author dumbs the information down for novice readers without any prior exposure on investing world. My fear of Mathematics did not put me off from my enthusiasm to learn about baby steps of investing. Satisfactorily, that counts for something!

This is the one-year journey of how Danielle learning to become an investor. It's a very good book for all people who's interested in investing, I highly recommend this book for beginner investor because of the storytelling format where we get to be peers with Danielle. It teaches the basics of investing, understanding stock market, how to do value investing and also the four-principles by Charlie Munger. The book is divided into 12 chapters in relative to 12 months, with each month focusing on one topic and also includes investment practices. The only problem I have with this book is the lack of examples for the complicated calculations(especially the Margin of Safety), but it's not a deal breaker.

more like 3.5/5

I can not express how much I love this book. It is for anyone who has been afraid of taking control of their own money story and actually setting out and planning how to invest your own money yourself. Danielle goes through an entire year learning how become a values investor like Buffett, Munger, and her own father, Phil Town by following the Rule #1: Don't Lose Money. She (and her father) explains her whole process, breaks it down into easily followed monthly steps, and explains how she overcame her own emotional hang-ups over money and the relationship with her father. She does it all with humor and not just a little bit of sass. I am a big fan of sass. I'm also a big fan of watching a father daughter relationship grow into a relationship between adults (that's hard) - I certainly teared up and then lol'd on the same page. (Gchat conversation with my book buddy can confirm said occurrence.) As a burgeoning Financial Fitness Coach, I read this book because it seemed to hit on a lot of issues that clients would have, and I hoped that in reading it I would, if nothing else, have another resource in order to give clients some answers regarding their own personal finances. I found that I am so glad I read it for ME. I now have a way of actively choosing, valuating, and managing my own investments without having to depend on a fund manager. I can choose companies that align with my personal values and interests and be able to ascertain if those companies will meet the necessary returns to reach my investment goals. And the MATH, as Danielle calls it, is not hard - you will just have to learn it, and it might be slow going, and just like any other new skill the more you practice the more you will understand and the easier it will get. A big part of why I love this book is that it not only shows you how to evaluate a company for stock investment, but also how you would evaluate ANY investment - a whole company or even a real estate investment purchase with easy to understand math examples. I am excited to begin my own values investing practice and see where it will take me for my future.

This book is written from the point of view of the novice learning at the foot of the master. In this case, a very bright, educated daughter has finally figured out that she has to make her money work as hard for her as she worked to get that money. And, even though her father has a reputation for being a financial guru, she had no idea how to make her money work that hard until she started talking to him about what he does for a living.It's a pretty cute and well-tried theme when adult children decide it's time to give their parents a little bit of credit for knowing something that they don't. The conversational exchanges go tangential to "growing up memories" where family interactions that we all have are laid bare--in this case, both sides get to give their version of what happened in those growing up memories. And, it's a good thing when the confronting of that conflict occurs in an atmosphere of common sense, good judgment, and adult behavior. Throw in a little empathy by each party and have an audience who can identify with father/daughter interactions can lead to an enjoyable read where you might get an understanding for more than just value investing.As stated above, the plot of this book is the "coming of age" of the novice learning these tips of the trade for financial management and investing from the master. Like any other "how-to" book, the description of that "how-to" can read like any reader can enjoy wonderful success if that reader will just follow these simple steps. But, simple doesn't mean easy. Success is not guaranteed.Regardless, this is an introductory book describing one method of finding and evaluating stocks from a value investing approach. The prescribed activities for following this method are understandable. The operational steps are clear...there is a pathway and that is what is laid out in this book. If you try this method, then good luck.Just to let you know, I've read it twice already.

In this book Danielle teaches the principles of value investing through the journey she had made. Her personal story with her dad is less important but she definitely gives tips on the general practises someone should do on a daily basis in order to make it a habit. She also simplifies the concepts.

This should be the first investment book to read easy to understand and follow and it already has one year of Developement plan for your reference if you follow after one year you will be so much better making investment decisions.

Great stuff for total beginners in investingGreat story told in a really simple and easy way. I recommend it to all investing noobs. Nice way to start a long life in investment :)

As a (relatively) experienced investor, I enjoy reading basic investment books as it allows me to 'fill in the cracks' of things I previously missed/forgot about. This book did a great job in that regard. Consequently, I would recommend it to any novice investor. The book does a good job of outlining Munger and Buffett's investment philosophy, but it does not add anything new. There is also a lot of superfluous information about the author's personal life, which I found exceedingly dull. Overall though, a worthwhile read.

This was another great read for someone who is just starting to think about investing. It was very helpful to read this along with listening to the podcast to get a sense of how her knowledge is growing. This also spells things out pretty clearly in terms of what numbers to look for and which calcul

I put it down after first 3 chapters but am so glad that I picked it up again.First 25% is about her story and relationship with money /investing (that section is **)next 75% is her learning the concepts of value investing and providing examples of applying the learnings to both real and theoretical companies (this part is 4****)I recommend the read as it does in fact teach you about the principles of value investing and, if you're willing to do the work- does teach you the concrete steps to take to get started. Although other references are needed to learn. more

A good beginner value investing book if you remove the fluff. A lot of father-daughter relationship talk which I wasn't particularly interested in but had to bear through.