I started Junto with the idea of finding terrific public businesses to invest in over the long-term and assemble a community of like-minded investors who don’t find that idea all too bad. Simple, right?
Investing intelligently is quite simple. But that does not mean it’s easy – at all. According to Howard Marks; people who think investing is easy overlook substantial nuance and complexity. In fact, investing has only gotten much harder over the past 50 years.
The stock market is a marketplace where asset prices reflect and depend on the expectations of the participants – a pari-mutuel system. And since competition has gotten more numerous, intelligent, and aggressive, the net result is that people are getting worse results.
What works in investing and business valuations have changed as well. How value is perceived has gotten to be much more about the intangibles than tangibles, and there are no net-nets to be found in the stock market anymore. Cash flows for many businesses are generated from sources not found directly on the balance sheet. And because a pari-mutuel system in reality separates what makes for a “good company” and a “good investment”, it’s not getting any easier.
The facts are on the table, but should we lose our encouragement? Not at all. If you’re smart, the stock market is probably the only place where you’re equal to everybody – and can be positioned better than the institutional investors. In other markets, it’s tough to see the opportunities if you’re not with the right clique. They go to others. The stock market’s always open.
I would argue that there are massive opportunities to be found in the stock market in the future – just as big as the ones experienced in the past century. The market ebbs and flows, and valuations will go up and down because they always have. Buffett has said before that he envies the next generation of investors.
The right opportunities will come to the very few who know where to look and are willing to wait while learning in the process. It starts with adhering to sound principles and philosophy. Remember there is no best practice in domains with multiple dimensions. Principles outlive tactics.
I encourage you to read this page on our investment philosophy but here is a list of some of the principles that we adhere to at Junto:
- We aim to be business analysts – not market, macroeconomic, or security analysts.
- We are lifelong self-learners through voracious reading. We cultivate curiosity and strive to become a little wiser in multiple disciplines every day.
- We separate randomness from determinism. We assess the correctness of a decision based on the process, not the outcome.
- We take the mispriced bets and only seize our best opportunities. We avert from unnecessary activity.
- We aim not to pay attention to things that matter too little.
- In an uncertain world, it pays to keep things simple. Exceptional investing is not about the size of the calculator.
- We set direction over speed.
- The way to minimize risk is to think.
- We enjoy the process along with the proceeds. The process is where you live.
To accomplish our pursuit of becoming intelligent investors, we will not lie idle. The Junto illustration at the top of this Note represents our means to our goal. We eagerly dissect everything we can get our hands on from company reports and filings, books, newspapers, periodicals, trade journals, and much more. We learn voraciously, tear out the most important, connect the dots, write about it, and occasionally take action when the opportunity is right. Our goal will be to have our own reference library of complicated topics expressed in an easy-to-understand form on the web for access to all readers.
That said, we will always keep in mind the human tendency to overconfidence bias and to speak with an incomplete argument. Most of all, we will at all times be attentive to the lurking commitment and consistency bias that often comes with writing thoughts and opinions down. When facts change, we will change our opinions as fast as possible.
That is why we follow this modernly underfollowed wisdom:
“He that would live in peace and at ease must not speak all he knows or all he sees.”– Benjamin Franklin
“Never fool yourself, and remember that you are the easiest person to fool.”– Richard Feynman
We only speak when important things are to be said or learned from. Our purpose is to help self-directed, independent-thinking, skeptical individuals become the best they can be in investing and business analysis. Thus, we do not publish content at fixed intervals to remain relevant.
The main part of Junto is our Notes section, which you are reading now. It’s the place where we write about what’s interesting in the companies we look at, case studies, the world, the books we read, tangential topics like philosophy and mental models, among other lessons. The Investment Portfolio is where you can directly follow our portfolio, read all our research, and invest right alongside us.
Lastly, we treat all Junto Members as family. We’re all part of the same path and pursuit of growing knowledge to make more intelligent investment and life decisions. And to learn best, we believe in being completely open and transparent in our community, thus we truly expect the same from our Members. We admit to our mistakes (and there will be many), call them out, and learn from them. If not, we have lost our cause.
You may be wondering why this business is named Junto. We didn’t come up with the name. It originates from a hero of ours and the person who came up with the first quote above; Ben Franklin. Franklin founded “The Junto” in 1727 as a club for mutual improvements for its original 12 members. The club’s purpose was to discuss business affairs, politics, and philosophy to improve its members and their community, and its affairs and commitments have had a tremendous impact on American history.
I think Franklin’s wit, virtue, and polymathic sense fit perfectly with what we are attempting to do at Junto to become better investors, better at life, and better at any relationship we encounter.
Welcome to Junto. We look to partner with like-minded investors who are interested in a patient, long-term investment approach that is rooted in the principles of value investing. I gladly hope that you will follow us on this journey!