In the current market situation, I believe it's time to create an introductory series on value investing—a method that focuses on buying businesses at a price lower than their true value.
This won't be an extensive course that teaches you everything there is to know about investing. Think of it more as a guide to help you get started. We'll provide you with the basics, insights, and inspiration to build your own investment journey. The real results will only come when you do the extra work yourself—researching companies, learning to value stocks, and developing patience and discipline.
The lessons are designed to give you a foundation in what value investing is and what you need to learn to become a value investor. This, without drowning in complicated jargon or complex calculations.
A Look at the Lessons
Here’s an overview of what you can expect:
Lesson 1: Why Invest
Why is investing a necessity? How can you beat inflation and make your money work for you?Lesson 2: Investing vs. Speculating
What's the difference between long-term investing and gambling on short-term gains?Lesson 3: Being a Value Investor
The core principles of value investing.Lesson 4: Every Stock Is a Business
How to view stocks as ownership in a business rather than just numbers on a screen.Lesson 5: Circle of Competence
Why you should only invest in what you understand—and how to define your own "circle of competence."Lesson 6: The Language of Business
Balance sheets, income statements, cash flow: how to read a company’s financial health.Lesson 7: Finding Ideas
Where to discover interesting companies and how to spot hidden gems.Lesson 8: Intrinsic Value
What is a company truly worth?Lesson 9: Valuation Methods
An introduction to tools like discounted cash flow and other valuation techniques.Lesson 10: Moats
How does a company protect its competitive advantage, and why is that critical?Lesson 11: The Margin of Safety
Possibly the most important concept in value investing.Lesson 12: Mr. Market Is Your Friend
How the market’s ups and downs can create opportunities rather than panic.Lesson 13: Watch Your Behavior
The psychology of investing: how emotions like fear and greed influence your decisions.Lesson 14: Checklists
The importance of a structured approach when analyzing companies.Lesson 15: Evaluating Management
How to recognize a strong leadership team and why it’s essential.Lesson 16: Knowing When to Sell
How and when to let go of a stock—and why.Lesson 17: Stocks Won't Make You Rich
Understanding why stocks are a tool, not a goal in themselves.Lesson 18: Famous Value Investors
What can we learn from greats like Buffett, Munger, and others?Lesson 19: What’s Next
How to continue after this series and keep growing as an investor.
How Will This Series Work?
We’ll publish these lessons, not weekly on Tuesdays, but alternating with other content. In between, you can also expect insights on European companies and our 3P checks.
For paying members, we’ll continue to follow all the companies in our selection (earnings season has started), provide a weekly overview on Thursdays, and remain on the lookout for new investment ideas.
An Invitation to Share
Do you have friends, family members, or colleagues who are just starting out with investing and want to learn more? Feel free to share this series with them—it could be incredibly valuable.
Investing may seem intimidating, but with the right guidance and a little patience, anyone can learn. If you’re already on the mailing list, you may be further along in your journey, but hopefully, this will serve as a nice refresher.
Let’s start at the beginning: Why Invest?
Lesson 1: Why Invest? Why the Stock Market? And Why Individual Stocks?
This is the very first step in our journey. Let’s begin with an essential question:
Why should you even bother to invest?
The Challenge of Personal Finances
Everyone has a list of financial goals. Some are short-term, like covering monthly expenses, buying a new laptop, or saving for a vacation. Others are bigger and more challenging: a new car, a dream home, children’s education, or a comfortable retirement fund.
These goals evolve over time. When I was 19, I started investing to get rich quickly. Five years later, with more knowledge and experience, my goal changed—it was no longer about wealth but about creating a good home and a stable future for our children. Now, as our eldest daughter graduates from university this year, the second considers further master's programs, and the youngest starts her studies in September, my goal is shifting again. It’s now about securing a comfortable retirement and supporting our daughters as they take important steps in their lives.
But here’s the problem: Many of our ambitions and goals surpass what we can achieve with income alone. Even if you work hard, optimize your earnings, and save carefully, inflation and unexpected expenses will likely take a bite out of your progress.
Let Your Money Work for You
Most people spend their lives working to earn more and achieve their dreams. But have you ever considered that you can get help from someone—or rather, something—to reach your goals? That “someone” is your own money.
Money earned today can make more money for you in the future. That’s the power of investing. It’s not a magical formula, but a proven way to grow your savings. Unfortunately, this isn’t something we’re often taught in school, and many parents don’t pass on this knowledge either.
Most people know how to save, but saving alone isn’t enough. Inflation can slowly erode your savings, meaning you’ll need more and more just to buy the same things. This makes investing a necessary complement to saving.
Why Not Just Save?
It may feel safer to put money in a savings account or invest in "safe" assets like gold or silver. But do you know how much those options really earn you?
Savings account: 0.5% to 1% interest per year (at least where I live).
Gold and silver: No income until you sell, and prices fluctuate significantly.
At first glance, these figures may seem reasonable. But when you factor in inflation—typically 2-3% per year—it becomes clear that you’re actually losing money. For example, if your savings account earns 1% interest but inflation is 3%, you lose 2% of your purchasing power every year.
The Problem of Inflation
Inflation is a silent problem that reduces the value of your money. Imagine this: a basket of groceries costs you €100 today. With 3% inflation, that same basket will cost €103 next year. If you don’t grow your money, you’ll be able to buy less and less over time.
Here’s a concrete example:
You’ve saved €10,000 for the next 10 years. If you keep it in a savings account earning 1% interest, it will grow to about €11,050. But with 3% inflation, the purchasing power of that €11,050 will be equivalent to just €8,200 in today’s terms. In other words, you’ve effectively lost money.
Why Invest in the Stock Market?
The stock market offers a solution to this problem. Historically, investing in stocks has been the most effective way to beat inflation and build wealth. Stocks have delivered average returns of 6-8% per year after inflation (including dividends)—significantly higher than saving or traditional investments.
The Power of Compound Interest
Compound interest is one of the most powerful concepts in finance. The longer you let your money grow, the greater the effect.
Here’s a simple scenario:
Start with €5,000.
Invest it for 20 years at an average return of 7%.
It grows to €19,348—nearly quadrupling in value.
Why Invest?
Secure your future: Investing ensures you’re prepared for major financial milestones.
More control: Financial independence opens doors to opportunities that might otherwise be out of reach.
Make your money work for you: Instead of only working for money, let your money work for you.
Investing isn’t a luxury; it’s a necessity in a world where inflation eats away at your savings. The earlier you start, the better your chances of reaching your goals.
Homework (If You Want):
Make a list of your financial goals.
Find three companies you’re interested in and read their annual reports.
Calculate how much you’ll need for one of your long-term goals, factoring in inflation.