306 episodes

Phil Town is a hedge fund manager and author of 3 New York Times best-selling investment books, Invested, Rule #1, and Payback Time. On the InvestED podcast, Phil and his daughter Danielle shine a light on the successful investing strategies that gurus like Warren Buffett have used for 80 years. Listen in for a great stock market education on basics, learn how to invest on your own, and follow along with real-time examples and investing tips from week to week. Subscribe and leave a review. Questions? Email questions@investedpodcast.com.

InvestED: The Rule #1 Investing Podcas‪t‬ Phil Town & Danielle Town

    • Investing
    • 4.5 • 1.3K Ratings

Phil Town is a hedge fund manager and author of 3 New York Times best-selling investment books, Invested, Rule #1, and Payback Time. On the InvestED podcast, Phil and his daughter Danielle shine a light on the successful investing strategies that gurus like Warren Buffett have used for 80 years. Listen in for a great stock market education on basics, learn how to invest on your own, and follow along with real-time examples and investing tips from week to week. Subscribe and leave a review. Questions? Email questions@investedpodcast.com.

    The Role of Shorting in the Market

    The Role of Shorting in the Market

    “There’s nothing evil, per se, about selling things short. Short sellers—the situations in which there have been huge short interests very often—very often have been later revealed to be frauds or semi-frauds.” — Warren Buffett

    Short selling, or shorting, plays an important role in public markets as it improves prices, rational capital allocation, prevents bubbles, and shines a light on fraud.
     
    If investors think a stock's price is dropping, they can short the stock. They borrow shares and sell them with hopes of buying them back at lower prices. However, stocks can theoretically keep rising, which could cause losses. So the investors that short the stock will either have to put more money up to secure their position or close their positions.
     
    Essentially, short selling exposes which companies' stock prices are too high. In their search for overvalued firms, short-sellers can discover inconsistencies or other questionable practices before the entire market does. Short sellers can almost be regarded as the “watchdogs” of the market.
     
    A recent example of this is the Gamestop event which caused many investors to either gain or lose money, as shorting isn’t ideal for all investors. This is why it’s important to invest with your values—so you can invest with confidence and reduce your risk of making bad investing decisions. 
     
    When looking for companies to purchase, always consider the Four Ms: meaning, moat, management, and margin of safety. This is the first step you need to take when building your watchlist of companies you are interested in.
     
    In today’s podcast, Phil and Danielle discuss the important role short sellers play in our market and why it’s important to invest with your values.
     
    Learn about the Four Ms and how they can help you invest in the right businesses at the right time with this FREE guide I've created for you: http://bit.ly/3btAqhM
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    • 46 min
    Li Lu’s Speech and Investable Assets

    Li Lu’s Speech and Investable Assets

    Every type of investment has its upside and downside, and some are riskier than others. Cryptocurrencies, for example, are the newest type of investment. They are unregulated digital currencies bought and sold on cryptocurrency websites. 

    Cryptocurrencies such as Bitcoin have gained a lot of interest in recent years as an investment vehicle—some people even think it may replace gold in the future. However, cryptocurrencies remain an incredibly risky investment due to the fact that there are many unknown factors. For example, there is the possibility of government regulation and the possibility that the cryptocurrency will never see widespread acceptance as a form of payment.

    At this point, no one knows for sure what the future holds for cryptocurrencies, so investing in cryptocurrencies is little more than speculation. Rule #1 investors don’t invest in things they don’t know. That’s not investing, that’s gambling.

    On the other hand, cash and commodities are typically considered low-risk investments. So if you’re new to investing or risk-averse, one of these options could be a good place to start. However, these low-risk investments also tend to have low returns. 

    Gold is an example of a commodity, so its price is based on scarcity and fear which can be impacted by political actions or environmental changes. If you are investing in gold, be aware that your protection against a price drop, your moat, is based on external factors so the price can fluctuate a lot, and quickly. 

    The price tends to go up when scarcity and fear are abundant and down when gold is widely available and fear is abated. If you think the world is going to be a more fearful place in the future, then gold could be a good investment for you. 

    Everyone’s reasons for investing and personal risk tolerance are different, so you have to decide which investment types suit your lifestyle, timeline, goals, and risk tolerance best. What a good investment is for one person isn’t necessarily a good investment for you. Listen to this podcast today for more information on your different investment options and the risk related to each.

    Learn more about your investable asset options with my Beginners Guide to Investing in 2021. Click here to download: http://bit.ly/37ldvE2
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    • 33 min
    Jim McKelvey and The Innovation Stack

    Jim McKelvey and The Innovation Stack

    Square is a financial service, merchant services aggregator, and mobile payment company based in San Francisco, California. Danielle has openly expressed her excitement for this company—but what makes it so special?

    In 2009, Square initially started as a solution to mobile businesses without mobile payments. It took Founders Jim McKelvey and Jack Dorsey about 3 years to understand the market at the time, and how they could make an impact in this space. 

    They entered the market and were able to provide a small device that could be easily inserted into the audio jack of smartphones. With this convenient hardware and only a 2.75% transaction fee, they quickly divorced the merchant from the shackles of digital wires. 

    The successes of these innovations were multi-faceted. The infrastructure for payment processing was no longer costly for a specialized machine, but a small add-on to devices we already own. This also meant that as long as someone had the Square app, they could be a transaction node as well. Square continues to show viral growth, with revenue up year over year.

    This week on InvestED, Phil and Danielle welcome podcast guest Jim McKelvey, the co-founder of Square. Jim talks about his book, “The Innovation Stack,” and how innovation ultimately is what impacts a company’s success. What does it take for a start-up to turn into a successful business? Listen to the podcast today to find out. 

    Interested in getting your own copy of "The Innovation Stack?" Order it at https://www.jimmckelvey.com.

    Learn how to find high-performing, innovative companies with my Four Ms checklist! Click here to download: http://bit.ly/2LzEBQ2
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    • 51 min
    GameStop and Short Squeezes

    GameStop and Short Squeezes

    This is an exciting time to be an investor in the stock market.

    As you know by now, Reddit investors just launched an "attack on Wall Street" by purchasing shares in GameStop. This pushed the stock price up over 480% in a week. 

    The investor who helped direct the world’s attention to GameStop is 34-year-old Keith Gill. Gill used Reddit’s WallStreetBets message board to promote GameStop, and used the identity of Roaring Kitty on his YouTube channel and Twitter page to help engineer a short squeeze against the hedge funds that were betting the price of GameStop would drop. But what is a short squeeze?

    If investors think a stock's price is dropping, they can short the stock. They borrow shares and sell them with hopes of buying them back at lower prices. However, stocks can theoretically keep rising, which could cause losses. So the investors that short the stock will either have to put more money up to secure their position or close their positions.

    If they choose to close their position, they are buying the stock to exit their position. This can drive the price higher and force other short sellers to do the same. 

    This creates a continuous cycle of buying and pushing the price up even higher. This is the short squeeze, as those short the market essentially get "squeezed out.” And it's exactly what happened with GameStop.

    Hedge funds and other short-sellers have lost an astounding amount betting against GameStop, and there has been a regulatory response to this event. Robinhood limited the number of shares each user can purchase, stating that the trading restrictions were risk management decisions to protect Robinhood and its clearinghouses.
     
    In today’s podcast, Phil and Danielle discuss the GameStop situation and explain why the market should be free—where regulators stay out of the “little” guy’s way.

    Learn more about the basics of investing in the stock market with my Beginners Guide to Investing in 2021. Click here to download: http://bit.ly/39EOFR0 
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    • 46 min
    Phil and Danielle Answer Fans’ Questions!

    Phil and Danielle Answer Fans’ Questions!

    Are you one of the winners of the InvestED 300th podcast episode giveaway? Listen to this podcast to find out! 

    Investing in stocks is one of the best things you can do to set yourself up financially, but you have to first understand the company valuation process in order to actually make money.

    When a company decides to go public, an investment bank helps determine what the price of the company’s stock should be at their Initial Public Offering (IPO), when they become available to purchase on the stock exchange. They determine the initial price based on the value of the company and early interest from investors before the stock is available to the public. 

    After the company goes public, the stock price is based on supply and demand. When the demand for a stock goes up, its price goes up. The demand can increase if the company is doing extremely well and its value is increasing, or it can increase simply because of excitement from other investors. 

    It’s important to remember to not get the “value of the company” confused with the “price of the stock.” The market can be incredibly emotional and price a great company way under their true value and vice versa. Ultimately, the stock price is determined by greed when the stock price is going up and fear when the stock price is going down.

    This is why it’s important to invest with certainty within your circle of competence. Love what you own, and put your money where your values are. Most of us have the intention to make the world a better place, but seem to forget that the businesses that they invest in have a direct impact on what is going to exist in the world in 10-20 years.

    In today’s podcast, Phil and Danielle announce the winners of the InvestED 300th podcast episode giveaway and discuss rational investing in 2021.

    Learn more about using your Circle of Competence to pick stocks with my 3 Circles Exercise Guide. Click here to get started: http://bit.ly/3pn4Bgj
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    • 57 min
    Li Lu's Speech & Episode 300!!

    Li Lu's Speech & Episode 300!!

    This week, we are celebrating the 300th episode of InvestED by doing a prize giveaway!

    Here’s how to enter:

    Go to investedpodcast.com

    Click the button “Click here for details!”

    Follow the steps for a chance to win:


    A FREE ticket to a 3-day Virtual Investing Workshop (a $300 value!)

    A signed copy of Invested*

    A $100 Amazon e-gift card

    Your question featured on the 301st episode of InvestED

    Danielle’s Bundle: A yearly subscription to the Invested Practice Newsletter and access to the Mostly Invested Online Course


    In this episode, Phil and Danielle bring great insights to their analyses of Li Lu’s speech from 2015, “The Prospect of Value Investing in China”. 

    Li Lu opens this speech by describing the ethics he believes all investors should follow:

    Make it your ethical obligation to seek truth and wisdom

    Be a really good fiduciary for your investors as if it’s your own money or your parent’s money


    He further implies that as a value investor in China, you will reap the benefits of finding wonderful companies because even then you can take comfort in the huge margin of safety or choose to exit.

    What was their biggest takeaway from his speech? Listen to the podcast today to find out.
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    • 30 min

Customer Reviews

4.5 out of 5
1.3K Ratings

1.3K Ratings

ruler1989 ,

Retail investor

You lost me at eliminating option trading

_DavidCatch ,

I Enjoy This Podcast

I really enjoy this podcast. I’m trying to better understand how investing works (in general) and it’s like overhearing a dad talking to his daughter about investing. I find it to be personable. Keep up the good work!

Caelotm ,

One of the BEST Investing Podcasts!

I found Danielle’s book first. As an ex attorney who is now trying to learn to invest wisely- I could relate to Danielle’s story. I decided to start listening to the podcasts from the beginning.

Danielle plays devil’s advocate because well, she’s an advocate in real life and it’s how she’s been trained to think. If she didn’t question her dad and express when she doesn’t understand something the show wouldn’t be nearly as good! (Cut her some slack folks- she’s an attorney and part of the reason I got out of the biz is because attorneys can be difficult and argumentative even when they have hearts as huge as Danielle’s)

I listened to the gamestop episode and man; It’s why I love both of these people! They are conscientious kind and wise folk and I am super grateful for this podcast. I have a feeling that in the current episodes Danielle is much more of a partner with her dad now. I can’t wait until I’m at her level of investing knowledge!

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