Bilbel Capital

Investing Insights

Clarity, Focus & Leverage

Leverage is the ratio between inputs and outputs.

The difference between what we do, and what we get.

One of the greatest levers is focus.

The focus gained by saying no to all things, except the 1 thing that matters most.

But to focus on it, we must first know what it is.

This means there’s 1 more important thing than focus…

Clarity.

The clarity gained by wanting to understand the 1 thing that matters most. 

…

When we truly want to understand, we gain clarity. 

Once we have clarity, we know what to focus on. 

When we focus on the right things, we achieve our goals.

What Matters.

Many people see investing like the weather.

When it’s rainy, they play it safe.

When it’s sunny, they take more risks.

The problem here is that they assume that the weather will not change.

No matter the environment,

If you buy businesses for less than they’re worth, you’ll make money.

If you buy businesses for more than they’re worth, you’ll lose money.

We have limited time and attention. We must focus on what’s important.

The importance of something in a business depends on:

  1. How likely it is to change profits.
  2. How big the change in profits can be.
  3. How long that change in profits will last.

The best business people focus on what matters most.

Strategy

Strategy is a big word. But we don’t like big words.

We have limited resources, and unlimited things we can do.

Strategy is prioritising the resources that get us the highest return.

Wealth

Wealth is the set of physical transformations that one is capable of causing.

The Most Important Investing Trait 

There are over 100,000 stocks in the world. Their prices change daily in an auction-style market.

If we look through them all, we’ll surely find at least one great investment.

This investment might be obvious, or it might not.

But, 

No matter how small our circle of competence,

No matter how bad the environment seems to be,

No matter how strict the rules we use to find them… 

If the desire is great enough, we’ll definitely find:

AT LEAST 1.

Investing, fundamentally, is a treasure hunt.
“Start with the A’s” ~ Warren Buffett

Dividends, Stock Buybacks, Re-Investing Internally, Paying Down Debt?

“Intelligent people make decisions based on opportunity cost” ~ Charlie Munger

How Important Is Accounting Knowledge for Investing? 

Accounting must be understood until all the limits of accounting are visible.

How Important Is Accounting Knowledge for Investing? 

Accounting must be understood until all the limits of accounting are visible.

Risk & Reward, Are They Correlated?

Most of the time, risk and reward go hand in hand—like in Roulette. 

But with stocks, it’s often the opposite. 

Let’s say a company is worth $1B. 

Is it riskier to pay $500M, or $200M?

If we pay 200M, the risk is lower and the reward is higher.

In 2019, Reysas Logistics had warehouses worth $800 million. But anyone could buy the stock for just $20 million—a 40x difference! 

People said the stock is risky because of Turkey’s volatile market and currency. 

But they were wrong.

If the stock fell to $10 million, it would be less risky, and the potential profit would double.

Competition In Business 

Who do you think will have a better business?

The one who is focused on other people’s business? 

Or the one who is focused on his own?

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