The Schwar Report - Issue 8

Monday 7th October 2024

Welcome to this weeks edition of The Schwar Report, your weekly primer featuring three interesting reads, two thought-provoking quotes, and one actionable step to start your week on the right foot.

Three Reads to Inspire Your Week

1. "The Most Important Thing Illuminated" by Howard Marks

   • Why read it: Howard Marks' book offers invaluable insights into successful investing, emphasising the importance of second-level thinking and market cycles. His wisdom on risk management and contrarian investing provides a solid foundation for any investor looking to improve their decision-making process and long-term performance.

2. “#9 Zen Investor Diary" by

   Business Invest

   • Why read it: In this article, Business Invest provides insights into their investment strategy and key learnings. Emphasis is on three core concepts: quality, asymmetry, and behaviour, which align closely with our own investment philosophy at Schwar Capital. Overall the piece offers valuable lessons on patience, the power of a temporal edge, and the importance of simplicity in investing.

#9 Zen 📖 Investor Diary

3. "Becoming Berkshire 1969 Part 2: Illinois National Bank & Trust" by

   The Weekend Investor

   • Why read it: This analysis of Berkshire Hathaway's 1969 acquisition of Illinois National Bank & Trust provides a fascinating look into Warren Buffett's early investment strategies. It offers lessons on identifying undervalued assets and the importance of management quality in investment decisions, principles that remain relevant in today's market.

Becoming Berkshire: 1969 Part 2 - Illinois National Bank

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Two Quotes to Reflect On

1. "The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological."

   — Howard Marks

   Reflection: This quote underscores the importance of emotional discipline in investing. It reminds us that successful investing is not just about having the right information, but also about managing our own biases and reactions to market fluctuations.

2. "Experience is what you got when you didn't get what you wanted."

   — Howard Marks

   Reflection: Marks highlights the value of learning from our mistakes and setbacks. In investing, as in life, our failures can often teach us more than our successes, provided we approach them with the right mindset.

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One Action Step: Create a Quality Watchlist

This week, challenge yourself to create a quality watchlist inspired by the "9 Zen Investor Diary" article. Each day:

• Research and add one high-quality company to your watchlist

• Define your criteria for what makes it a quality investment

• Set a target price at which you'd consider investing

• Identify potential catalysts for future growth

At the end of the week, review your watchlist. Reflect on the common characteristics among these companies and how this practice has sharpened your ability to identify quality investments.

Quick Tip: Focus on companies with strong fundamentals, growing businesses in rising, need-based industries, and potential opportunities that the market may not be fully pricing in yet.

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That's it for this week's Schwar Report. As always, we're here to help you stay informed, grounded, and focused on your long-term success.

Have a productive week,
The S.C. Team

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Disclaimer: The content provided in this newsletter is for informational purposes only and does not constitute financial, investment, or other professional advice. While we believe the information to be reliable, we cannot guarantee its accuracy. The opinions expressed are those of the author and do not necessarily reflect the views of Schwar Capital. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. The author may or may not hold positions in the stocks or other financial instruments mentioned. Always do your own research or consult with a qualified financial advisor before making any investment decisions.