The Boring Invstr - Your Simple, Digestible Weekly Investing & Finance Newsletter

3 General News Headlines:

1. 21-year-old Massachusetts Air National Guard member Jack Teixeira was arrested on Thursday for leaking classified US Military documents on the messaging app Discord. He is set for his second appearance in court on Wednesday.

2. The Supreme Court did not block a settlement agreement surrounding 151 for-profit institution attendees canceling their student loans.

3. A 2007 energy law that requires all new and remodeled federal buildings to be completely free of fossil fuels by 2030 may be implemented after a 15-year standstill. The law was passed but it failed to create implementation rules.

3 General Finance News Headlines:

1. On Thursday, Amazon released CodeWhisper, a free, AI code generation tool in hopes of rivaling Microsoft's CoPilot AI tool.

2. Campbell Harvey, a Canadian economist stated this week that although the inverse yield curve (an indicator that has predicted every recession in history) is pointing towards a recession may be wrong due to a strong labor market and the fact that “everyone knows to watch out for it.”

   a. The yield curve measures interest rates on government bonds. An inversion happens when the interest on short-term bonds pays more than the interest on long-term bonds.

3. Elon Musk recently filed a new AI company called X.AI Corp in Nevada aiming to be an everything app. X.AI Corp is under the holdings of X Holdings Corp. In 2000, Elon Musk merged X.com (an online banking software company) with Confinity. The merger led to the creation of PayPal.

Welcome Back to The Third Edition of The Boring Invstr!

I want to thank you for your continued support over the past few weeks. We have grown to 27 subscribers in just over three weeks with a 76.2% open rate. Over a 50% open rate is unheard of for any publication! I also want to hear from you. Is there anything I can improve, or do you have any ideas for the next week’s edition? Please let me know! This week’s newsletter is a little longer, but it is worth the read!

Warren Buffet is one of the most successful investors the world has ever seen. Many times, people refer to his tremendous ability to turn Berkshire Hathaway around and his rare ability to invest in companies at the right time. However, many people misunderstand his investment approach, assuming that he simply bought and held stocks for an extended period of time. While he did execute this investing strategy to almost perfection, most people don’t understand how Buffett created most of his money.

After receiving his undergraduate degree at the University of Nebraska-Lincoln, he pursued a graduate degree at Columbia Business School. After getting his graduate degree, Buffett worked as an investment salesman for his father’s investment firm Buffett-Falk & Co before working for Graham-Newman Corp. At Graham-Newman Corp, he learned under who would become his mentor and business partner, Benjamin Graham.

In 1956, Buffett started his own investment firm Buffett Partnership Ltd. From his time at Graham-Newman Corp, Buffett learned to maximize returns through value investing. In 1964, Buffett saw an opportunity in an undervalued (Lower market value than its intrinsic value or what it is worth) American Express. Multiple opportunities like these allowed Buffett to turn investors’ initial investment of $105,100 into over $100 million in just over a decade. Between this time, he averaged a yearly return of 23% outpacing the stock market by double-digit percentage points.

During the last five years of his investment firm, Buffett saw an opportunity to buy a high cash flow or high float company in Blue Chip Stamps. Buffett saw that he could use the excess cash that the company generated to invest in other businesses. Over the next couple of years, Buffett would continue to find undervalued, high-float businesses where he could use the excess cash to buy other businesses. This was the foundation of how Warren Buffett would amass his wealth over the coming decades.

Although his investing firm was a massive success, he decided to close his firm in 1968 to focus solely on Berkshire-Hathaway. At the time, Berkshire-Hathaway was a struggling textile company. After winning a tough takeover battle Berkshire-Hathaway, he knew he needed to spend more time on the company. At this time, Berkshire recently merged with Blue Chip Stamps and other various companies Buffett acquired from his investment fund.

As any investor would encounter, Buffett encountered setbacks. Buffett's time working for investment firms and Berkshire-Hathaway allowed him to develop a strong reputation. This would come in handy when he was on the brink of an investigation by the Securities Exchange Commission (SEC). In the 1990s, Saloman Brothers pleaded guilty for placing false bids to influence the treasury securities market. As Buffett criticized Salomon Brothers, they also started buying up shares of Saloman Brothers at an undervalued price. As Berkshire bought more shares, the SEC became skeptical of insider trading. The SEC chose not to open the investigation because of the outpour of support from investors and employees to not open the investigation. Buffett barely avoided a detrimental effect on Berkshire-Hathaway and his reputation.

I tell you this context not to outsmart you or overwhelm you, but to help you make simple and actionable steps to increase your investments in the long term.

Here Are a Few Items You Can Pull Away:

1. Although I hated on people who think Warren Buffett just put money away every month and let it grow, time is your best friend. This is Warren Buffett’s all-time number-one investing advice. You must have time for your investments to grow.

2. While you may not have the money to invest in assets that can generate as much cash flow as Buffett, there are smaller-scale assets you can invest in to start generating more cash for more investments.

   These are…

   1. Dividend Stocks

   2. Alternative Investment Crowd Funding Companies - There are funds for real estate, art, farmland/land, and private equity (Business investing)

   3. High-Yield Savings Accounts (Liquid if needed)

   4. Annuities (Long-term insurance contracts that pay you interest; they are tax-deferred and have no contribution limit)

3. Warren Buffett often only bought when he saw the right opportunity. He was patient and did not try and make a play on a company he could not make successful. While you are not buying companies at the size Buffett does, do not be afraid to buy in a down market. Don’t try and time the market but look for opportunities in companies or in index funds that are undervalued than their normal value.

4. Reputation is everything. While the SEC is most likely not opening an investigation for insider trading on you, you never know what investment opportunities or relationships you form just because of your reputation.