William Ackman: Everything You Need to Know About Finance and Investing in Under an Hour | Big Think

Here is the link.

It is best one hour lesson to take. I like to take more notes later on. The lecturer is a harvard graduate, and a billionaire hedge fund manager.

I also like to take some time to think about how he presents the information. The way he put together the slides, and topics he covers.

I watched the video first time in 2019, at that time, I had not went back to the stock market. I was totally naive and no idea who is the lecturer.


How to evaluate risk?


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Equity:

Comes in man forms:

• Preferred equity
• Common equity
• Options

Only has a residual claim

Can only collect on its claim ...

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Assessing risk

Investment risk:
The probability of the permanent loss of capital


The riskier the business, the higher the rate of return demanded

Government bonds:

1. The lower risk investment
2. Issued as 10, 5, and 3 year debt
3. Earn a 3% return on 10 year debt

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How to be a successful investor?

• Don't invest in startups
• Invest in public companies
• Understand how the company makes money
• Invest at a reasonable price
• Invest in a company that could last forever

What can you own forever? 

For example, 

Coco cola - easy to understand

McDonald's - 50 years - royality

Find a business that: 

• You understand
• Has a record of success
• Makes an attractive profit
• Can grow over time

Businesses that last:

• Sell a product people need
• Sell a unique product
• Elicit brand loyalty consumers are willing to pay for

Keys to successful investing:

1. Invest in public companies
2. Understand how the company makes money
3. Invest at a reasonable price
4. Invest in a company that could last forever
5. Find a company with limited debt
6. Look for high barriers to entry
7. Invest in a company immune to extrinsic factors
8. Invest in the company less reinvestment costs

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How to withstand market volatility:

1. BE financially secure
2. Don't get spooked by short-termed fluctuations
3. Do your own work
4. Invest at a reasonable price

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A good money manager:

1. Can easily explain investment strategy
2. Has a good reputation
3. Has value approach
4. Has a successful track record of at least 5 years
5. Has a consistent approach 
6. Invest own money in the fund