Q: When it comes to investing, your philosophy is “keep it simple.” You don’t like highly complex investments. Can you explain why?
A. Investment Complexity
a. Low Repeatability
b. Warren Buffet if you don’t understand it, don’t buy it
c. The math tends to be in the houses favor
Q: When it comes to investments, you worry about individual investors making their own investment decisions. Tell us why.
B. Balance Sheet Manipulation
a. Earnings can be manipulated
b. Balance Sheet (Financial Engineering)
c. Example Owning vs Leasing
d. Example Future Sales
Q: So with all that goes on in corporate America’s financial statements, what do you look for when investing for your clients?
C. Cash Flow is King
a. Free Cash Flow is sign of health
b. Hard to Manipulate
Q: You have written that the Recession is already here. What does that mean for investors? And, what should they do?
D. Redefining the Gauge of a Recession
a. Reduction in Corporate earnings
b. Reduction in future earnings estimates
c. Why would you want to own a shrinking asset