Investment Foundation

The GOAT book list.

After unacceptable personal losses in 2008, I spent many years attempting to understand the nature of investment cycles and the characteristics of companies and valuation metrics that drive superior long-term returns. The books listed below have guided my investing philosophy, and that of many investors on our GOAT list. Notes can be accessed by clicking the links, which may help understand how we think about and attempt to understand market cycles and company prospects.

The notes are not a substitute for reading the books, but highlights that remind us of key philosophies and metrics.

Digital analysts

Ideas, then 13Fs.

We have created digital analysts that use our Investment Foundation notes, and all publicly available information about the investment process of the investors on our proprietary GOAT investor list, to generate ideas. We then cross-reference those ideas with recent and historical 13F filings.

The list

Highlights we keep in view.

Click through for the working notes. The notes are not a substitute for reading the books, but highlights that remind us of key philosophies and metrics.

“Antifragile: Things That Gain From Disorder” (Nassim Nicholas Taleb, 2012)

Notes of Nassim Nicholas Taleb, not the book.

“Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor” (Seth Klarman, 1991)

Notes of Seth Klarman, not the book.

A collaboration of Howard Marks notes and books

Notes of Howard Marks, not the books.

Baruch: My Own Story (Bernard Baruch, 1957)

Notes of Bernard Baruch, not the book.

“Jesse Livermore: World’s Greatest Stock Trader” (Richard Smitten, 2001)

Notes of Richard Smitten, not the book.

“Security Analysis” (Benjamin Graham and David Dodd, 2009 Sixth Edition)

Notes of Benjamin Graham and David Dodd, not the book.

“Competition Demystified” (Bruce Greenwald and Judd Kahn, 2005)

Notes of Bruce Greenwald and Judd Kahn, not the book.

Competitive Advantage Key Points

Notes of Bruce Greenwald and Judd Kahn, not the book.

Competitive Advantage Checklist

Notes of the Greenwald framework, not the book.

Working filter

Competitive Advantage Checklist

The questions, verbatim. Must be answered on every name. Open the checklist page.

  1. Competitive advantage: Supply, Demand or Economy of scale?
  2. Is the customer local, bounded either geographically or in product space, or large and scattered?
  3. Is the market fragmented to the extent that high fixed costs per unit advantage are eliminated?
  4. MKT by MKT assessment of existence and source of competitive advantage; if there are none is operational efficiency sustainable?
  5. If barrier to entry exists, what does the company do that the competition does not?
  6. Is barrier to entry incumbent or entrant? If it is entrant than the C/A is transitory.
  7. What is the captivity? How can that be challenged?
  8. What are the switching costs, time, $, familiarity? What other risks are there in switching?
  9. Does the incumbent understand its competitive advantage, and is it savvy enough to defend it?
  10. Is it a high growth MKT? If so, then barriers to entry are nearly non-existent.
  11. Is the company cheap/hated enough where operational effectiveness can alter the investment thesis?
  12. Is the company focused enough to be operationally efficient?
  13. Can EOS be developed because there are significant fixed costs and the market is fragmented? If there is a degree of customer captivity then this could be defensible.
  14. Examine CEO’s comments and whether they are synchronous with action? Growth, product, capital allocation history.
  15. Is the management stake continually allocated and redeemed b/c then not true stakes and are simply company expenses?
  16. ROIC past and projections? Over 25%?
  17. If MKT share stability and profitability indicate the existence of c/a, the third step is to identify the source. Do dominant firms benefit from prop. tech or other cost advantages, is there a captive customer thanks to consumer habit formation, switching costs or search costs, are there economies of scale combined with at least some degree of cust. captivity?

Open the checklist page

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