Rule #1 Finance Blog

With Investor Phil Town

InvestED: Ep. 179- Amazon Author’s Fishbowl Interview

This week we are discussing our Amazon Author’s Fishbowl interview, which is now available on our show notes. We’ll talk about what our Amazon trip tells us in the context of the Rule #1 style of investing. This week we’ll take some hypothetical numbers, do some math, and show how Rule #1 investing benefits our investing practice. For show notes and more information visit www.investedpodcast.com.


Watch the Facebook Live:

In Episode 179 You’ll Learn:

What does our Amazon experience tell us about investing?

  • By visiting the company and having “boots on the ground” we can learn more about the companies we are interested in buying.
    • Fisher refers to this as “Scuttlebutting”.
    • Digging in deep is a vital process in the Rule #1 style of investing.
  • Amazon’s current growth rate and owner earnings make it difficult to purchase Amazon, as it is already priced high.
    • Despite the quality of the company, we need to be wary of high priced stocks because of the constant potential of any business to crash.
    • It doesn’t do us any good to purchase a small amount of an over-priced business, as opposed to buying a high-quality company on sale.
  • Emotional Rule of Investing:
    • If you put all of your money in the market now, it will drop like a brick.

Owner Earnings

  • A different way of looking at the same numbers.
    • Helps us look at the price we can and should pay for a business.
    • Calculations found in InvestEd can help us determine the implications of a company’s owner earnings

Danielle and Phil Recommend:

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On the InvestED podcast, Phil and his daughter Danielle shine a light on the successful investing strategies that gurus like Warren Buffett have used for 80 years. Listen in for a great stock market education on basics, learn how to invest on your own, and follow along with real-time examples and investing tips from week to week.

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