Understanding good & bad investment behaviour

Tough October

It was another tough October—famously the most difficult month of the year for the stock market. There once was a rational explanation for this phenomenon. In the old days, October was the month when the rural banks drained their deposits from the urban banks to pay the farmers for the harvest, which created seasonal credit… Continue reading “Tough October”

Marshmallows and the Cost of a Moat

The VIEW from BURGUNDY One of the most frequently mentioned research studies in the field of developmental psychology is the “marshmallow test”. Conducted in the late 1960s and early 1970s, the experiment considered how children’s ability to exercise delayed gratification would affect their success in life. The test was designed like this: children were offered… Continue reading “Marshmallows and the Cost of a Moat”

Lazy Fund Managers

When we started Burgundy 26 years ago we had some basic principles and values in mind. We would aim to make significant investments in well run businesses run by trustworthy, capable and honest management teams. We would work hard to deeply understand how these businesses worked and what the fundamental drivers were in order to… Continue reading “Lazy Fund Managers”

Stoic Training for Private Investors

Philosophy seems to be trending these days. In 2013, Burgundy sought investing inspiration from ancient Greece, publishing a View on Stoicism and the Art of Portfolio Intervention. Several tech entrepreneurs, such as Peter Thiel (co-founder of PayPal) and Reid Hoffman (co-founder of LinkedIn), proudly hold philosophy degrees. Charlie Munger, partner of Warren Buffett, has also… Continue reading “Stoic Training for Private Investors”

Are You Faking It?

Have you ever found yourself in a conversation about finance and, in a moment of incomprehension, rather than ask a question you simply nodded along? Perhaps it was a conversation with friends or colleagues, or perhaps it was even with your financial advisor. Much of the investment industry is built upon moments like these full… Continue reading “Are You Faking It?”

Parents, Beware

“Parents, Beware: Your Children Will Invest Like You Do.” This headline caught my attention in The Wall Street Journal last week. In all my studies, I have never come across any research that demonstrated a link between the investing behaviours of parents and children, until now. The author of the article1 highlights a July 2015… Continue reading “Parents, Beware”

How to Avoid Common Investment Mistakes

The VIEW from BURGUNDY As investors, each day we face triggers. Whether they manifest in our conversations with friends and colleagues, or in the barrage of daily media messaging, we are constantly surrounded by information that triggers hard-wired, internal “fight or flight” emotional responses. These responses originated as a means of survival for our ancestors… Continue reading “How to Avoid Common Investment Mistakes”