Scuttlebutt with Paul Lountzis

At the start of my investment career, few thoughts which made obvious sense to me were received from few amazing resources of knowledge. Besides the usual Buffett letters and Graham’s Security Analysis and many other books, a favorite of mine was ‘Common Stock and Uncommon Profits’. Philip Fisher always referred to Scuttlebutt ( Original term for a Ship bucket where sailors would meet to discuss latest gossip of the sea) as the main edge of investors who are relentlessly looking for the information on the ground to create the edge over so called ‘Armchair Investors’. I observed that even though it was commonly referred to by most of the investors, the quality of this activity was not great and thought of penning down my thoughts on the same. There have been countless articles written on the theory of it and hence I will refrain from that. I will write few practical issues I faced and how I learnt the art of scuttlebutt but that’s for later.

 

Thankfully , my job is made very easy by Miguel Barbosa of Simoleansense. He recently conducted an interview with Paul Lountzis where Paul explained the process of Scuttlebutt with great panache and infectious passion. I immediately made notes of few key points and thought of sharing the same with the readers. It benefited few of my twitter followers, hope this benefits you too. The picture is attached below. In case you use mindmap software, please download the file here.

 

Thanks. Happy Investing.

 

Paul Lountzis



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15 Comments

  • Raja Panda

    Fantastic post Puneet.

    I did struggle with similar things for sometime in my initial years and it used to appear very confusing. For example one question newbie’s struggle with in initial years is about portfolio concentration. I kind of assumed, i have to find the guy with best returns and then carbon copy his style be it concentrated or diversified. The variable of knowing yourself in the portfolio building was missing in that quest.

    Similarly, in initial years, my first indoctrination was from the school of “quality business even, if at expensive valuation”, took some time to understand it pro’s and con’s and start appreciating ideas of other kind.

    One thing i could suggest for newbie readers is, in addition to reading different things, try to interact with lot of different kind of investors with an open mind and listen to their stories and processes. Real life stories often tend to open up our mind and heart well as we can relate to some of the stories much better.

    Regards
    Raja

    • Puneet Khurana

      Thanks for the appreciation, Raja.

      Yes, you are absolutely correct. It is very essential for the newbie investors to get in touch with other investors. This is one thing I didn’t do much in the initial phase of my career and paid a price for that. Had to learn a lot of things by hit and trial which costed time and money and in hindsight I could have saved on both if only I was open to discuss with various sensible investors.

      But there is a caveat too : Don’t be over or under-impressed by some investor and try to over or under-weigh his experience over others. This generally happens if that particular investor’s personality is more impressive. Well, personality has nothing to do with making money in stock markets.

  • Varenya

    You are damn right.

    My reading list just keeps expanding!

  • Ashish Golechha

    Fantastic stuff Puneet !! Liked it especially the way you have summed it up. Especially the idea point. Money masters of time is a superb book. Many people start with heavy stuff like big books and lose interest in so called “Value Investing” theme. We all have to see what suits our personality !!

  • Krushnakumar

    Hi Puneet,

    Fantastic stuff

    Who is the author of More Money Than God ?

    Thanks for your help in advance

  • Vinay Arya

    Awesome post Puneet!! You have infact very nicely captured the dilemma of every investor who is not a newbie but hasnt seen many cycles of the market yet.
    Great work!!

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  • Warren Buffett, himself, was strictly a Graham disciple, until his mind was opened to a blend of value and growth. This was due to Charlie Munger’s influence, who taught Buffett that it is better to buy a good company at a fair price than a fair company at a good price. Buffett kept his mind open to new ways of thinking.

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