Podcast 27: Build on What You Know - Resources, Answers to Questions & References:
Pulling the threads together to create a strong tapestry is what makes successful investing work for individual investors. Peter Lynch has repeatedly said that an individual investor has advantages over institutional professionals, but you and I have to use those advantages. That is the focus of today’s podcast.
Resources:
Secrets of the Temple: How the Federal Reserve Runs the Country, William Greider, 1987, Simon & Schuster
Berkshire Hathaway Annual Report. Link: https://www.berkshirehathaway.com/2022ar/2022ar.pdf
Walmart Earnings. Link: https://corporate.walmart.com/newsroom/2023/02/21/walmart-releases-q4-and-fy23-earnings
Kentucky Legislature ESG Story. Link: https://www.nytimes.com/2023/02/24/your-money/anti-esg-investing-kentucky.html
Podcast Questions:
Investing Questions: Are yours getting better? And strategies to make that happen?
My experience has been that a person’s questions are becoming more effective - which is my definition of “getting better” - when 1) they either cover new ground or cover previous ground in greater detail, 2) they combine both overarching concepts and measurable results - linking both together for greater overview and detail comprehension, 3) there is often a mixture of discomfort (usually due to the need to incorporate new facts) and satisfaction (some satisfactory answers and occasionally an “Aha” moment, and 4) it feels like hard work. The strategy to accomplish this is not complicated. It has three parts. 1) Ask 20 questions to get 2 good ones. 2) Ask questions from different angles, which includes consulting resources and people with whom you don’t agree. 3) Research your research. Look for articles, podcasts, books, reports - whatever - that are looking at your subject anew. Then read selectively.
Walmart Earnings Question:
The additional piece of information that is important to me is: “How did the competition do?” My reading is that Walmart is doing better than their competitors.
Kentucky Legislature Question:
My read is that it is the bottom of the 1st inning and that the Kentucky Attorney General and the Kentucky Bankers’ Association will be legally entangled for some time. Other states will follow. Stay tuned.
Podcast 26: Conclusion from Previous Podcast - Assessment Tools for ESG
Environmental, Societal and Governance (ESG) business practices are increasingly part of many investors criteria for buying a stock. Dr. Lehan has examined four alternative ways to assess ESG in previous podcasts and in this episode concludes the analysis with a recommendation that does not require a lot of time while being comprehensive. For simplicity and time sake, this and previous podcasts have focused on the greenhouse gas element of ESG, while the process can be applied to other ESG issues.
Dr. Lehan makes the point that some ESG metrics will grow and become stronger in this developing field, while others will fade and fall away. More importantly, some assessments are insightful and meaningful and others do not add to the quality of insight into the potential investment being examined. Understanding what and how to measure should be a key part of selecting successful investments. This podcast is intended to assist in that process.
This podcast concludes with comments on perspective regarding the development of the ESG arena that investors should keep in mind while focusing on their purposes and their particular investment strengths while the specifics, intent, and application of ESG criteria evolve in the coming years. You might call it keeping track of the buoys, cans and other channel markers on our ESG investing voyage.
Resources Cited in Podcast 26:
United Nations PRI: https://www.unpri.org/
Greenhouse Gas Protocol: https://ghgprotocol.org/
CDP Company Listing Page: https://www.cdp.net/en/companies
CDP 2022 Scoring Methodology: https://cdn.cdp.net/cdp-production/cms/guidance_docs/pdfs/000/000/233/original/Scoring-Introduction.pdf?1615800532
Microsoft Sustainability Report: https://www.microsoft.com/en-us/corporate-responsibility/sustainability
NYU Stern School/Rockefeller Report: https://www.stern.nyu.edu/sites/default/files/assets/documents/NYU-RAM_ESG-Paper_2021%20Rev_0.pdf
Investopedia Sharpe Ratio Definition: https://www.investopedia.com/terms/s/sharperatio.asp
BlackRock Investment Stewardship Primer: https://www.blackrock.com/corporate/about-us/investment-stewardship
Allvue Systems KPIs: https://www.allvuesystems.com/resources/a-complete-list-of-esg-kpis-by-industry/
The Little Book That Still Beats the Market website: https://www.magicformulainvesting.com/Home/AboutTheBook