Are quick decisions bad when you are an investor? Do you research a company until you get the last drop of info before you act? This presentation will help you make decisions w/o all the facts.

1. Making Decisions Without All The Facts
By Jae Jun
www.oldschoolvalue.com

2. Foreword
Recently, as I continue to analyze my investing
habits, I’ve noticed a couple of things I was and
was not doing. One aspect that I had always
adhered to was to “always invest in businesses
that you understand”.

3. Somewhere along my investing journey, I
slowly started to morph the philosophy to a
new meaning; “don’t invest in anything
unless you know everything”.

4. Here is why I am wrong.

5. What You Will Learn
● Is investing an art or a science?
● How to apply the 80/20 rule in investing
● How to invest w/o all the information
● Are quick decisions always bad?

6. Art Vs Science
I’m sure you have all heard that investing is
more of an art than science.

7. Since we are valuing the future prospects
of a business, where the future is always
misty, murky and mystical, there is always
a point in our research where we know
that no amount of study and diligence will
uncover all the facts.

8. The 80/20 Rule
The 80/20 is a nice ratio to remember. It may
even be more helpful than the infamous PE.

9. “By the numbers it means that 80
percent of your outcomes come
from 20 percent of your inputs.”
- Yaro

10. Tying it in, it means that the first 80%
of the information comes from the
first 20% of research.

11. Investing Without All The Information
This brings me to my main point.
How many of us have missed many no brainer
opportunities because we were spending the
remaining 80% of our time to gather the last
20% of information?

12. When Buffett was asked about his worst
investment ideas, his response usually
referred to the missed opportunities, and
boy am I feeling that these days.

13. “High uncertainty is frequently
accompanied by low prices. By the
time uncertainty is resolved, prices
are likely to have risen.”
- Seth Klarman

14. Quick Decisions Aren’t Always Bad
Spending time on research is a good habit, but
sometimes, we can make good quick decisions
by quickly visiting the latest annual report and
the research done by others.
As with all things, I’m realizing that being fluid
is important.

15. One example is my experience with Dolby.
I’ve missed my margin of safety
price for Dolby twice because I
was trying to wring out every
piece of information in the midst
of many other to do actions.

16. I spent an hour or
so every couple of
days trying to
listen, re-listen,
read and re-read
the conference
calls, reports, past
reports and
discussions.
I was basically
determined to stick to
my discipline of
researching everything
before investing.

17. When Dolby came within my margin of
safety again, I again spent more time trying
to catch up on what was different, what
could happen and so on. Needless to say, I
wasted too much time.

18. I think I should learn how to do something
similar with a thousand dollars.
If Buffett can purchase an entire
company within a couple of hours on a
napkin...

19. Jae Jun (jae.jun@oldschoolvalue.com)
http://www.oldschoolvalue.com
Old School Value improves your investment
decisions and performs deep fundamental
analysis and valuation for you. Just like a
personal stock analyst.