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My
Investing Notes

How I Invest in Stocks and Businesses

 

 

Nearly Everything I Know

Stock Market Data

Overview

My notes discuss all the topics below, regarding investing in stocks and businesses.

"If You Are Good at Investing,
Why Would You Need to Sell?"


After talking with friends and family, and asking for suggestions of where to start to learn how to invest, I did not have a book or set of videos that covered everything that was important. This is why I wanted to organize my notes and provide such a source.

 

In addition, the best way to learn, is to teach. I wanted to revisit all the topics that I felt where the most important to investing, and ensure I understood these topics to the best of my ability. 

Finally, I would much rather generate revenue that allows me not to draw down on my investments, and instead allow those assets to compound and grow over time. 

 

This is also the reason I wanted to provide these notes for a cost, rather than make them free. They are valuable to me, I spent years writing them down, and even more time thinking through and determining what is most important. 

Please Note

There are other resources, such as books, podcasts, videos and more that contain similar information. This is simply an aggregation of all the information I have came across and gathered over the years, and felt was most important, all in one central location and organized.

About Me

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Austin Swanson

I'm Austin Swanson, aka "Swany407". I own residential real estate properties, both single family and multi-family, and focus on NNN and absolute net commercial properties.

 

I also invest in public companies. I have a passion for understanding what makes certain companies successful, past and present, and look to use that knowledge to make investment decisions. 

I have degrees in mathematics and actuarial science, and have obtained actuarial credentials of FSA, CERA, and MAAA.

Content

  • Basics

    • Stocks and Market Cap

    • ​“Value Investing” vs “Growth Investing”

    • If Started Over

  • My Investing Approach

    • Companies I Understand by Being a Customer or User 

    • Concentrated

    • Deep Discount to Future Cash Flow

    • Good Management 

    • Process to Assessing Past and Present Ideas

  • Before Buying

    • Plenty of Time to Buy

    • What are you Missing?

    • Do You have an Edge?

    • Simplicity and No Brainers

    • Prepare Mind

    • Write Down Why Buying

    • Margin of Safety

    • Starter Positions

    • Related Sections

  • Before Selling

    • Opportunity Cost

    • Facts Change

    • You Were Wrong

    • Fully Valued

  • What to Avoid

    • Thinking in terms of individual stock price rather than total price / market cap

    • Callable Debt (not all financial leverage)

    • Options - Mind then focuses on short term

    • Day Trading

    • Short Selling

    • Technical Analysis

    • Using the word “Stocks” to keep focused on the Business

    • Using “value” vs “growth”

    • Constrained to any given asset class - miss opportunities

    • Point in Time Metrics

    • Making it Back the Same Way you Lost it 

    • Macroeconomics

    • Buying a Great Business that is not a Great Investment 

    • Short Term Thinking / Earnings

    • Unnecessary Activity

    • Looking at the Stock Price to Determine how the Business is Doing

    • Not holding Cash

    • Too Concentrated

    • Not being Fearful when others are Greedy

    • Stop Losses

    • Luck

    • Interrupting Compounding

    • Fooled By Management

    • Bad Businesses (Even if Cheap) 

    • Poison Pill Threshold

    • Changing Businesses

    • Emotional Buying

    • Bad Tax Planning

  • What to Look for 

    • No Brainers

    • Mispriced bets

    • Low Risk High Reward

    • Low Risk High Uncertainty

    • Irrationality

    • 3G’s

    • Capital Light

    • General

  • Finding Ideas

    • 13fs

    • Screening

    • What You Use Yourself

    • Look through the small companies

    • Other Resources

    • People to Follow

    • Miscellaneous

  • How to Analyze a Business

    • Constituents in the ecosystem

    • Comparison to competitors

    • Where revenue comes from

    • Margins

    • Characteristics of a Great Company

    • Capital Allocation of Management

    • Understand the Basics

    • Metrics

    • One Metric

    • Relationships with Math

    • Opportunity cost

    • Historical data

    • Past Vs Future

    • Hypothesis and Killing Hypothesis

    • Commodity vs Franchises

  • How to Analyze a Business – Specific Industries

    • Insurance, Banks, Financial Services

    • Credit

    • Airlines

    • Banks / Credit Services

    • Auto Parts Manufacturing

    • Newspaper

    • Franchise

    • REIT

  • How to Value a Business

    • Price vs Value

    • Consider Interest Rates

    • What is Intrinsic Value?

    • How to Calculate Intrinsic Value

    • Liquidation Value

    • Ranges of Intrinsic Value

    • Expected Value

    • Margin of Safety

    • Kelly Formula

    • Must value the entire enterprise ( see growth and value comments by Buffett) 

    • Comparable ratios (similar to commercial real estate with cap rates) 

    • Discounted cash flows

    • Buy low, and sell high...in relation to intrinsic value, not past prices

    • Double Dipping

    • Reinvesting

  • What’s Implied by Current Price

    • Reverse DCF

    • Future

    • Low Expectations

    • Unpopular or Unfavorable

  • Competitive Advantages

    • Higher Certainty and Predictability of Cash Flows

    • Miscellaneous

    • Widening Moat

    • CVP

    • Franchises vs Low Cost Operators

  • Behavior

    • Don’t Look at Stock Prices - Focus on the Business

    • Volatility leads to buying opportunities

    • Second Level Thinking Yourself 

    • Stick within What You Know (Circle of Competence)

    • Changing Your Mind

    • Intelligence vs Temperament 

    • Rationality

  • Psychology

    • Commitment and Consistency

    • Authority-Misinfluence Tendency

    • First Conclusion Bias and Doubt-Avoidance Tendency

    • Added 5/1/2020

    • Lollapalooza

  • Destination Analysis / End-State

  • Mental Models

    • Scale Economics Shared

    • 2^10 vs 10^3

    • Think 10 Years from Now

    • Hidden PE of 1

    • Time to Build Company = Time Needed to Destroy Company

    • Economics

    • Penetration of Lower End of Market

    • Reasonability of Assumptions

    • Inversion

    • Aggregators

  • Game Theory

    • Prisoners Dilemma

    • Keynesian Beauty Contest 

  • Probability

  • How to Value a Business / Calculating Intrinsic Value

  • Patience

    • No Brainers

    • Miscellaneous

    • Trading Volume

  • Concentration

    • Diversification vs Concentration

    • Concentration

    • Allocation Sizes

  • Uncertainty

    • Low Risk and High Uncertainty

  • Mistakes

    • Misinterpretation of Outcome (it was not a Mistake)

    • Miscellaneous

    • Relating Multiple Mistakes of Great Investors

    • Selling When Long Runway, or Not Selling with Small Runway

  • Slack

  • Opposition Thesis

  • Kelly Formula and Expected Value

  • Public vs Private Deals

    • Public to Private

    • Private to Public

  • Arbitrage

  • Inflation

  • Leverage

    • Payment in Kind (PIK) and Zero-Coupon Bonds (ZCB) 

    • Convertible notes / convertible debt 

  • Preferred Shares

    • Accounting

    • Cash Flow

    • Leases

    • HTM for AFS

    • Blackline Comparison

    • SEC Staff Comments

    • Factoring

    • The Summary of Significant accounting policies includes changes made

    • Miscellaneous

    • Right of Use (RoU) Assets and Operating Lease Liabilities

    • Treasury Stock

    • Stock Options

    • Accrual vs Cash Accounting

    • Expense vs Capitalized Costs

    • Purchase GAAP Accounting

    • LIFO vs FIFO

    • Miscellaneous

  • Investing Other People’s Money

    • Getting Started

    • Base of Safety

    • Permanent Capital

    • Losing Investors / Pulling Money

    • Potential New Partner Questionnaire

  • Real Estate

    • Single Family and Multifamily Long-Term Rentals

    • NNN Leases

Disclaimer

The information shall not be construed as financial or investment advice. These notes are for informational purposes only. 

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