The Entrepreneurial Investor: The Art, Science and Business of Value Investing

The Entrepreneurial Investor: The Art, Science and Business of Value Investing is a book by Paul Orfalea, Lance Helfert, Atticus Lowe and Dean Zatkowsky. How to be an entrepreneurial investor? Let the authors show you.

The Entrepreneurial Investor

If you run short of time and would love to get the gist of the book, go to the epilogue.

There are four main parts, namely, (1) Think like an owner, (2) Companies worth owning, (3) The owner’s manual and (4) What’s it worth – To me?

  1. Think like an owner

    Concentrate your investment in a few stocks in different sectors (e.g. 10 to 15) that you know and understand so that you don’t panic like everyone else when market moves but there are nothing fundamentally wrong with the stocks you are holding. Do like what Warren Buffett do: “Concentrate in your circle of competence”.

  2. Companies worth owning

    Think great brands that customers love that have competitive advantage and great management. A point that’s new to me that I like to share is that the authors said to look for companies that value their people and have great culture. I guess this is based on the idea that happy employees translate into great service and happy and repeat customers.

  3. The Owner’s Manual

    Do note that financial experts who are interviewed are rarely spot on, so take what they say as entertainment rather than financial advice. Cash is king whether it is to an individual or company, so check the amount of cash and cash flows of the company. When you read the contracts, small prints are important. Similarly, this applies to financial reports, so read the footnotes. Inventory might not necessarily translates into cash, especially if inventory is perishable or get outdated fast. So when inventory rises, be concern and check the reason.

  4. What’s It Worth – To Me?

    “Buy low and sell high?” But how low is low? Valuing a company is tricky and subjective. But going back to what you understand (see Point 1) might help. If you want to invest long term, consider what’s the long-term trend.

For those who would like to borrow the book from National Library Board, here’s the call number: 332.6 ENT – [BIZ]