285- Allan Mechams Investing Philosophies
b'Allan Mecham is a well-known investor who runs a hedge fund called Arlington Value Capital. Allan has had a phenomenal track record, and implements the values and philosophies of Rule #1 investing. In 2012, Allan sent out a letter to his investors that covered some of his core investing philosophies.\\n\\nOne of those philosophies included that in order to be successful in the stock market, you must look for the rare combination of business safety, an attractive price, and a clear understanding of the business that leads to a low-risk and market-meeting return.\\n\\nHis principles also focus on the idea that you\\u2019re not trying to make money in investing, but the objective is to not lose money. This doesn\\u2019t mean the stock price never goes down from where you bought it, but rather, the value of the business never decreases from where you bought it.\\n\\nDetermining whether or not a business\\u2019s value will decrease comes down to finding a safe company at a great price, and making sure you understand it fully. This is one of the core Rule #1 investing principles.\\xa0\\n\\nIn Allan\\u2019s letter, he also stated that he has one goal in mind when structuring his policies. That is, to make rational decisions in investing which will lead to wonderful returns. This includes staying within your circle of competence and thinking objectively.\\n\\nThe most important thing I can tell you about becoming a great investor is to focus on your circle of competence. Try to buy businesses that really mean something to you. What are you passionate about? What do you actually know something about? Those are the questions that will make you connect to your investments, and the more you connect with your investments, the more you will own it as if you own the whole business. The more you understand the meaning of the business, the better investor you are going to be.\\n\\nWhat Allan means by staying objective in investing is not being influenced by your emotions, and sticking to the data and facts in your researching process. Only buy into a company with the mindset that you are owning the business as if it were your own\\u2014and that you plan to own that company for the long-term. This is also aligned with Rule #1 investing philosophies.\\n\\nIn today\\u2019s podcast, Phil dives deeper into Allan Mecham\\u2019s investing philosophies, and discusses what investors can learn from them.\\xa0\\n\\nLearn more about buying stocks within your circle of competence with my 3 Circles Exercise Guide! Click here to download: https://bit.ly/3ieOJbp\\n\\nLearn more about your ad choices. Visit megaphone.fm/adchoices'