Learn about Business | The Stoic Investors

In this section of The Stoic Investors, I aim to share my business experiences, ideas around business, and business concepts to help investors understand more about, you guessed it, business. Many investors and analysts become so fixated on the numbers, valuation, modelling, DCFs, and the teaching of academic finance that they forget they are investing in operating businesses.

I 💯% resonate with Warren Buffett’s quote, “I am a better investor because I am a businessman and a better businessman because I am an investor.”

Over my journey, I’ve learned more about investing from running companies than studying how to invest better. Not everyone has the experience of running companies to be able to take the lessons and apply them to investing. So, within this, I aim to distil timeless business concepts and principles to guide investors in learning more about the businesses beneath the pieces of paper they invest in.

Shares are not mere pieces of paper. They represent part ownership of a business. So, when contemplating an investment, think like a prospective owner.”
Warren Buffett

The characteristics that make certain companies great will always be a contributing factor to making great companies. Investing strategies, philosophies, and valuation techniques are forever evolving in a dynamic financial world. However, the principles of business seldom change.

🚫 Never invest in a business you cannot understand.

This is the one investing rule that should be adhered to before any other. The best way to understand what you are investing in is to learn more about business. I’ve outlaid some thought-provoking ways to look at business and will continue to layer on this section over time.

I am grounded in the belief that investors should spend time understanding the engines of capitalism that drive economies and companies. This can aid in making better investment decisions. Having started and scaled over a dozen companies, it has prepared me with a level of scepticism around “the next big (enter whatever it is here)”.

Business plans are easier to execute on paper than implemented in the real world. I believe today’s investors have such a short-term orientation to markets. They are unforgiving when a company does not meet their expectations within a quarter. Businesses take time to deliver a strategy, a lot of time. There are so many milestones, challenges and stages before a business “crosses the chasm” into greatness.

I believe in authentic capitalism. If a business, founder, or entrepreneur creates and adds value to society by disrupting and creating solutions, then whoever “supports” these enterprises with capital should be rewarded.