The stock market’s daily liquidity — stocks being priced continuously throughout the day — is both a feature and a bug. If you unintentionally let the market into your life, it will ruin you. The human mind is not built for it; it interprets frequency and loudness as authority.

The productivity of software engineers will go up a lot. This is a deflationary force — and one that will displace a lot of jobs.

In the past, developed markets traded at a premium to emerging markets; we had a stable political system, a stable and more diverse economy. That premium was earned, not given. And it is quietly eroding.

Some things are within our power — our values, our character, our decisions — and some aren’t. We can control what we do. We cannot control when the stock market will stop pricing fast-growing companies as priceless and slower-growing companies as worthless.

The right decisions usually come with a certain amount of discomfort, and for good reason: you are making them against the grain of the market. Selling when everyone else is excited and enthusiastic is incredibly difficult.

DCF is a foundational concept of the valuation of a company or any asset that generates or will generate cash flows in the future.

A dollar in seven years is worth less than a dollar in your pocket today. So you need to discount all these cash flows at an appropriate rate back into today’s dollars. This tells you how much the cow is worth.

Diversification is the only free lunch an investor will ever get, as risk reduction doesn’t need to lead to subsequent reduction in return.

The story of Noah’s Ark comes to mind: gather two of every kind to survive the flood. This is how Wall Street and academia approach diversification; but as Warren Buffett put it, that’s how you create a zoo. We are not in the zoo business, just intent on picking the right animals.

Equity returns come from the sum of three variables: earnings growth, P/E change and dividends. Focusing exclusively on dividend yield causes investors to ignore earnings growth and valuation changes.

In the quest for value, we seek gems that have collected the dust of confusion and misunderstanding.