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How does compounding work when you invest in the stock market?

It appears many people are not exactly clear about HOW compounding ACTUALLY WORKS when you invest. It is easy to see in terms of our bank deposits, where we are paid interest upon interest and it just goes on (although it is just a pittance these days!) What about when you invest? When you invest in a company, how does that investment actually compound? The key is understanding how effective the company (actually its management) is in DEPLOYING THE CAPITAL it has on hand. Obviously, this depends...

December 2, 2020

Ruth Truth 7: Look for great leaders

"...she happened to come to the portion of the field belonging to Boaz, .... Now behold, Boaz came from Bethlehem and said to the reapers, “May the Lord be with you.” And they said to him, “May the Lord bless you.” Ruth 2:3-4Still on the same verse for the 3rd week in a row!Remember, we are looking into Boaz. What might be the "secret" of his success? Last week we learned how he is a generous and gracious man who obeys the command to look out for the poor and needy among us.Today, notice...

November 29, 2020

Investment Lessons from Spring

I love drawing investment and life lessons from nature.Spring is a lovely season. It is full of life, new opportunities, growth. At the same time, it is quite unsettled and can be windy, even turbulent at times. At a time when plants are supposed to be growing, some branches get broken by the wind, pruned by nature if you will.Does the pruning serve a purpose?How do we take advantage of "pruning times" to grow?What investments can we prune, so that others may grow?Don't waste the pruning ti...

November 27, 2020

What to look for in a potential investment?

I'm often asked what to look for in an investment. My standard reply is:1. Great Company2. Fair PriceWhat qualifies as a Great Company?+ It generates high returns on capital+ Regularly Increase in earnings (or operating cash flow)+ Growing dividends (if you want a dividend growth strategy)+ Compound intrinsic value (a growing book value is a good proxy)Btw, that sequence is important, and actually logical. And it all starts with a high ROIC. Meaning, the capital allocation skills of the manageme...

November 25, 2020

Incredible Journey to Mortgage Freedom

This is the recording of the interview we did with Bourne and Brittany and we had so much fun! There was SO MUCH GOLD in what they shared! Definitely worth a listen! Bourne is only 32 and Brittany 28 but they have paid off their house mortgage this year! Their journey?- Bourne had $24k in debt 5 years ago when they got married- He started on almost minimum wage, and actually lost his job!- They bought the house they live in now about 3 years ago, and it is in a very nice suburb - 3 years later, ...

November 24, 2020

Ruth Truths 6: Being gracious

"...she happened to come to the portion of the field belonging to Boaz, .... Now behold, Boaz came from Bethlehem and said to the reapers, “May the Lord be with you.” And they said to him, “May the Lord bless you.” Ruth 2:3-4We all know in the story that Boaz was a wealthy man. That is why he was able to redeem Naomi's land and also have workers under him.But notice that he was obedient to the commandment to not pick everything from his field. He obeyed the commandment to leave whatever ...

November 22, 2020

Investing in the Past Tense or Present Tense?

It is easy to get excited about how a company has done well and therefore chase winners. Indeed, good historical financial results will form the basis for shortlisting what could be a great company. Good results show a company has DONE well. Its moat tells you whether it will continue DOING well. Of course, the above only answers the 1st of 2 questions I always ask. WHAT to invest in. There is still the PRICE to pay (ie valuation). Are you living in the PAST TENSE, or investing in the FUTURE T...

November 18, 2020

Ruth Truths 5: Right Place Right Time - The importance of favour in your career, business and investments

I seriously cannot contain my excitement when I read the book of Ruth. It seems I can't read more than a few verses before it seems to jump at me and we're only scratching the surface! "...she happened to come to the portion of the field belonging to Boaz, .... Now behold, Boaz came from Bethlehem and said to the reapers, “May the Lord be with you.” And they said to him, “May the Lord bless you.” Ruth 2:3-4 Of ALL the fields, the field of Boaz. Of ALL the times, at this TIME, when Boaz h...

November 15, 2020

Looking for good management

How do YOU gather information about companies that you want to invest in? For me, QUALITY of management is very important, but there is an art to it as well. What do I mean?I list some of my properties on AirBnb and just received the following email that was sent to all hosts : https://loom.ly/J6hJE40.Also check out this letter sent to employees in May this year: https://loom.ly/9-ruOK0Serious, go read the letters. Why am I highlighting a letter from a CEO? This company isn't even list...

November 13, 2020

Not taking risks is now risky

"Not taking risks is now a risky strategy." Cameron Bagrie True, but take sensible risks. Don't rush to invest blindly. 1. Know WHAT you are investing in. 2. PRICE it properly. Is the challenge you might be facing a risk you should consider taking? How does it turn from a challenge into an opportunity?  Bless you! You can: Get free training: https://bit.ly/JF-TrainingPage Join the conversation at: http://bit.ly/FaithFinanceGroup Get more articles like this: https://www.joshuafong.com/ ...

November 11, 2020

Ruth Truths #4: What's in your hand?

"And Ruth the Moabite said to Naomi, “Let me go to the fields and pick up the leftover grain behind anyone in whose eyes I find favor.” Ruth 2:2 I love this verse! Ruth and Naomi are now back in Bethlehem, having no fields or any form of livelihood. But Ruth does not sit still, waiting for a handout! She is now actively looking for some way to provide for herself AND her mother-in-law. She is not wallowing in self-pity, instead she looks at what she CAN do. I especially like the 2nd part of ...

November 5, 2020

How does TIME factor in investment decisions?

Time! One of the most important four letter words for humans!  Today, I want to introduce you to 2 very simple but extremely time related questions I ask myself before I make any investment. And they are super easy questions! Question 1: Am I willing to hold this investment / company for at least 10 years? Well, if you are not willing to hold it for at least 10 years, you shouldn't be holding it for even 10 minutes!   Implicit in this question is that:- It is high quality- It is s...

November 4, 2020

Ruth Truths #3: Will you flee or cling?

"...and Orpah kissed her mother-in-law, but Ruth clung to her." Ruth 1:14As mentioned previously, names are very significant in the Bible. They often give us deeper insights into meanings etc. Here, Orpah means gazelle whilst Ruth means friendship.  Remember Elimelech and his 2 sons have now all died, leaving behind 3 widows, Naomi, Orpah and Ruth. In those days, it was bad enough to have a famine. As a widow, you literally have no one to take care of you and will often be bullied. Alt...

November 1, 2020

Should we "Invest" in Luxury Goods?

I was recently asked this question! And it's actually a good one, so please don't pre-judge the question. :) Also, there are several layers to the question.  Let's take a step back, and first define what a luxury good is. It's definitely not a "need". It is probably very high quality and expensive. A handbag could be a need if you need it for work purposes and just getting your stuff organised. A Prada handbag would be a luxury as you don't really need a branded one.  But hold on. What...

October 29, 2020

How you can get a "regular paycheck" as an Investor

How many of you got "paid" to be a shareholder recently!?  One of the companies I bought (please, not a recommendation to invest in this or any company mentioned) during the sell down just paid its quarterly dividend (again) on 15 Oct and it actually INCREASED from the previous payout. At this rate, the gross yield on purchase price is about 10% per annum. COVID? Some companies are able to keep on keeping on. :) That's the beauty of investing:- No headaches- No worries about sales or invent...

October 27, 2020

Provision, Sowing and Reaping

“Then this shall be the sign for you: you will eat this year what grows of itself, in the second year what springs from the same, and in the third year sow, reap, plant vineyards and eat their fruit." Isaiah 37:30 The context of this verse is that Judah, at that time King Hezekiah, was surrounded by the Assyrians. Just imagine being surrounded by a vast army, running out of food and water, low in morale. Feels like covid? I think it was easily 100 times worse! But check out the prom...

October 25, 2020

What matters most in investing?

"The big money is not in the buying and the selling, but in the waiting." Charlie Munger Seems easy eh? Unfortunately, that is one of the most difficult for many people because we are "wired for action". We want to be in control, be doing something. As if in doing SOMETHING, we could make our investments go up faster.  In all my years of investing, one of my biggest regret has been not holding on to great companies once I found them and invested. If you are early in your journey, don't repe...

October 19, 2020

What does it really mean to commit your plans to the Lord (especially in the area of money and investing)?

"Commit your actions to the LORD, and your plans will succeed." Prov 16:3 NLT This is an often quoted verse and there are various perspectives you can draw from it.  But I was recently drawn to the word COMMIT. One interpretation would be that we have to be 100% committed to whatever we are doing. That it is something WE have to work hard at doing. Almost like the story of story of Cortés and the burning of his ships in 1519 so there is no turning back. Sometimes there is a place for that,...

October 16, 2020

Ruth Truths on Faith Money and Investing #2

Names are important. In many ways, it is often prophetic and almost "defines" the person's identity. Remember the father, Elimelech? His name meant "My God is King". Interestingly, he named his 2 sons Mahlon and Kilion (Ruth 1:3). These names meant "weakling / sickness" and "destruction" respectively.  Would YOU call your children names like these? I wonder what happened to Elimelech, that when the children were born, that he would give them such terrible names.  Sadly, Elimelech died ...

October 15, 2020

Mainfreight Investor Day

Visited Mainfreight's latest facility in Tauranga today. Will make a post soon about why MFT is one of my favourite companies. One of the main reasons is the culture they have created, and the people focus.Special People, Special Company. What a tagline!...

October 14, 2020

Ruth Truths on Faith, Money and Investing #1

Hi! I am going to take a new slant for the next few days / weeks. The book of Ruth is one of the most beautiful stories in the Bible and rightly so. There are many nuggets of truth in those 4 chapters. However my focus will be to collate some thoughts as they relate to money and investing. Let's start from the beginning! Ruth 1:1-2 says there was a famine in the land. They originally lived in a place called Bethlehem, which means "House of Bread". (interestingly, the Bread of Life, Jesus, would...

October 13, 2020

In investing you must either create value or find it

As most of you know, my passion is investing, in both real estate and the stock market. In real estate you can CREATE value, by doing things like what I've done in this video. In the stock market you don't have control, so you will need to FIND value. But the commonality is this: VALUE. either create it, or find it, preferably both!PS: Video produced by my amazing friend Andre who has taken this project from dream to reality!...

October 3, 2020

The importance of Mental Models for an Investor

A friend sent me this link (Farnam Street) yesterday on Mental Models and how to think. Loved it! You should check it out.  https://loom.ly/M9KYXjU As investors we need to learn "how to think" and that requires mental models. Not only that, you need to be able to see issues from different angles. That is why it is important for investors to read widely and get an understanding of how different spheres work. Otherwise, we tend to just stick to our own preferences and what we are comfortable ...

September 29, 2020

Will New Zealand House collapse by 50% in a very severe scenario?

Ha! Got you there. That's what that headline was. CLICKBAIT. Came across this exact headline last week https://loom.ly/uH9I-l0 talking about how house prices could collapse by 50% in a very severe scenario.  Of course! If things get bad, anything can happen. And of course, things CAN get very bad, because it has happened before.  BUT, does that mean we just sit around and worry? No one can predict the future. If the numbers make sense (ie you really need to know WHAT and WHY you are in...

September 25, 2020

Behind the scenes....a day in my typical Investing and Business life :)

What a day!Started at 630am, visited 3 different towns across 2 regions, drove 400km in total, 5 hours driving, meeting the team, checking on piling progress, checking out another development site, connecting with a fellow Kingdom Builder, checking in with accountant and getting fresh ideas.All in a days work I suppose!Oh, the 5 hours driving is something I actually enjoy. Listened to 1 sermon and completed an audio book. Nourishing!...

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