Here are 5 great investing resources for June:

• Resource 1: The Why Wait? Podcast – I appeared on Rob Berk’s podcast last week to discuss how I started investing, entrepreneurship and why we don’t need to settle for average returns as individual investors. Tune in for a surprise announcement during the show!

• Resource 2: Money, Investing & Stock Market Book Lovers Facebook Page – We created this Facebook page to start a community around recommending some of the best investing books. Join the conversation; we’d love to hear some of your picks.

• Resource 3: How Short Selling Works – For those looking for further clarification on how the Gamestop chaos ensued this year, this video simplifies the concept behind the madness — Short Selling. It also compares short-sellers to long-term investors to demonstrate risk and rewards.

• Resource 4: Concentrated Compounding with Shree Viswanathan – I recently stumbled upon this podcast by Capital Employed. The guest described his perspective on concentrated compounding, a strategy our team uses when making investment decisions.

• Resource 5: The Intelligent Investor: The Definitive Book on Value Investing – Originally written by Warren Buffett’s mentor, Benjamin Graham, this latest version has invaluable commentary by Jason Zweig from the Wall Street Journal.

This book is considered the value investor’s Bible. It’s comprehensive and somewhat dry but contains a wealth of profitable information.

Like Peter Lynch, Graham discusses metrics and ways to calculate intrinsic value while breaking down what to look for when analyzing companies. This book is for serious fundamental investors and number crunchers. You’re looking for companies that have been unjustly discounted by the market, buying them cheap and holding them until they become profitable.

This book is essentially a college course, in and of itself. If you pair this with a few YouTube videos, you can level up your investing knowledge without paying for tuition!

What are the best resources you’ve come across recently? Whether it’s a website, book, podcast, video, or app, I’d love to hear about it and may even feature your pick in a future email!

Hit reply and let me know…

Thanks,

Karl

The post Your 5 Monthly Investing Resources (June 2021) appeared first on American Dream Investing.

Here are 5 great investing resources for May:

• Resource 1: Wall Street Crime And Punishment: The Salad Oil Scandal Of 1963 – Scams, soybeans and Warren Buffett: this story from Benzinga’s Phil Hall was a fascinating read.

• Resource 2: Amor Fati! – Amor Fati is “The Love of Fate…used to describe an attitude in which one sees everything that happens in one’s life, including suffering and loss, as good or, at the very least, necessary.” This Twitter thread from “Decade Investor” shows how you can apply this mantra to investing.

• Resource 3: Financial Insights w/ Billionaire Jeffrey Gundlach – I’ve interviewed Tony Robbins and Jeffrey Gundlach, so it was a real treat to hear them speak with each other. They talk about taxes, asset allocation and inflation (Gundlach mentions that the U.S. has spent a staggering $8.1 trillion over the last 12 months, 56% of which is debt).

• Resource 4: Why Some Risk is Good for You – Risk gets a bad rap when it comes to investing, but you need to take on some risk to generate returns. This Investing Daily article from Scott Chan breaks down the last 20 years of S&P 500 total returns. It shows how “over the long run, despite occasional, and sometimes scary, corrections, the stock market trends upward.”

• Resource 5: Gen I: What Investing’s New Class Looks Like – This Kiplinger article reports on a Charles Schwab survey. According to the survey, 15% of investors got started in 2020. Schwab is calling this group “Generation Investor” or “Gen I.” That’s nice for their marketing purposes, but what’s really interesting is how varied this group is (11% are Baby Boomers!).

What are the best investing resources you’ve come across recently? Whether it’s a website, book, podcast, video, or app, I’d love to hear about it and may even feature your pick in a future email!

Comment below and let me know…

The post Your 5 Monthly Investing Resources (May 2021) appeared first on American Dream Investing.

They read…a lot.

William Green’s extraordinary new book Richer, Wiser, Happier: How The World’s Greatest Investors Win In Markets And Life is based on his interviews with investing luminaries including Charlie Munger, Sir John Templeton and Bill Miller. 

As an avid reader of investing books old and new, I can say that Richer, Wiser, Happier easily slides into my personal list of the best books I’ve read (I’ll be sharing more with you in future resource lists).

I first read an excerpt in Barron’s last month and immediately pre-ordered a copy (something I’ve never done before). When the book was released on April 20, I devoured it over the next few days, despite dealing with two children under two years old and high fever from my second COVID vaccine! 

Green has written for Fortune, Forbes, The New Yorker and The Economist, and his writing style is warm and relatable. He writes with the individual investor in mind, clearly summarizing sage advice from the world’s greatest investing minds without overcomplicating things.

As the title suggests, the book is not only about making money and often wades into philosophical territory. “How can we make smart decisions when nothing stays the same and the future is unknowable?” writes Green at the beginning of one chapter. 

On the surface, the chapter is ostensibly a profile of Howard Marks, the legendary hedge-fund manager. Digging deeper, we find that much of the investment advice offered within these pages is also applicable to our everyday lives. By embracing the impermanence of life and accepting all that we don’t know, we can become better investors and happier people.

After reading the book, I knew I had to find a way to contact William Green. With some persistence and unconventional thinking (traits that have served me well as an investor), I was able to track him down. 

I’m happy to report that I’ll be interviewing him tomorrow for Forbes. I’m looking forward to that conversation and will be sharing it with you once it’s published.

I can’t recommend this book enough and urge you to get a copy of it (note: American Dream Investing may get a small commission from any Amazon purchases you make from this link. I’d be just as happy, though, if you borrow it from the library and invest the $20 instead). Reading it will surely help make you richer, wiser and happier!

Have you read the book yet? What questions would you like me to ask William when I speak with him tomorrow?

Here’s to many happy returns!

Karl

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I consume a ton of content – articles, podcasts, videos, apps, etc. I’ll be sharing a list with you each month of the best resources I’ve found that will help you on your journey to becoming a better investor. 

Here are 5 great resources for April:

• Resource 1: PSA: understand the stages of investor psychology – This Reddit page reminded me a lot of the cycle of emotions I know every investor has experienced at some point. Here’s a fun reminder that you’re not alone in feeling the ups and downs of an emotional rollercoaster while investing. Enjoy this light, witty read.

• Resource 2: Stock Analyst Accuracy – Why Ratings Can Be Wrong & When to Listen – Analysts are consistently wrong with their predictions (as I’ve written about previously). Despite their iffy track record, their opinions hold enormous sway over the market. This MoneyCrashers article takes an in-depth look at what analysts do and why you shouldn’t blindly follow their ratings.

• Resource 3: The Robinhood Generation Is Debating Old School Investors on Trading Stocks – Experienced investors are troubled by the risky strategies young investors use when dabbling in the stock market. This fascinating article shines a light on the thought-process of the “new-school” and the generation gap between investors, some within the same family.

• Resource 4: Shopify: The E-commerce On-Ramp – Patrick O’Shaughnessey is one of the best financial commentators on Twitter. He recently launched a new venture, Colossus, that provides deep dives into the world of business.

The premier episode of the Colossus podcast covers Shopify, a company that has boomed during the pandemic. You can listen, read the transcript or explore additional content on his site.

• Resource 5: One Up On Wall Street: How To Use What You Already Know To Make Money In The Market – “One Up On Wall Street” holds a special place on my bookshelf.

My father gave me this as my first book on investing and the stock market. He told me to read it and come back to him to discuss some investing ideas. I’ve been referring to Peter Lynch’s methods ever since.

This is the granddaddy of investment books for the individual investor. Its popularity is due to its readability and accessibility for an investor just starting out or even a seasoned vet. It gave people the tools and confidence to invest themselves and not rely on a mutual fund or money manager. Lynch touted the “invest in what you know” concept, which became extremely popular.

“One Up On Wall Street” breaks down different industries and financial metrics while guiding the reader toward intelligent ways to find value in investments. His tone makes this an entertaining, straightforward and essential read.

What are the best resources you’ve come across recently? Whether it’s a website, book, podcast, video, or app, I’d love to hear about it and may even feature your pick in a future email!

Let me know in the comments below…

The post Your 5 Monthly Investing Resources (April 2021) appeared first on American Dream Investing.

My family and 18,000 strangers started cheering as they saw me on the Jumbotron in the arena. Blinded by the light, I dropped to one knee and tried not to drop the ring from my pocket…

Five years ago, I proposed to my girlfriend at a Bruce Springsteen concert, with a little help from ‘The Boss’ himself. It was one of the greatest thrills of my life! 

Thankfully someone caught the event on camera (you can see it on YouTube), and the Miami Herald later wrote about it.

At that point, American Dream Investing was still in its infancy. My father, Richard, and I founded the company just a month earlier. My first article, about fees, was written a few months later.

A lot has changed over the last five years. Rachel and I are married and have two kids. I became a Forbes contributor and fulfilled my dream of being a published writer. 

Sadly, my dad passed away last year, and I’ve made it my mission to continue his legacy by teaching his investment philosophy.

To commemorate the fifth anniversary of my (very public) engagement, I wanted to share with you five quick investing lessons based on the songs of Bruce Springsteen:

• Atlantic City – Many people believe the stock market is like a casino, but investing is not gambling if you approach it the right way. 

An investor owns shares in a real business, usually with a long-term goal of getting a return on that investment.

I consider day traders and get-rich-quick speculators to be the real gamblers in the market. 

There’s nothing wrong with that, as long as they understand which camp they fall into. 

Personally, I prefer to limit my downside by carefully choosing investments, studying them in-depth, and steadily growing my portfolio over time.

• Brilliant Disguise – Unfortunately, accounting fraud and irregularities happen from time to time. 

Companies can ‘massage’ their earnings, which is why we like to focus on free cash flow, which is very difficult to manipulate.

We have no tolerance for fraud and need to know that we can trust a business’s management. 

If we suspect that one of the stocks in our portfolio needs to restate its earnings due to accounting irregularities, we will always cut ties with that stock, even if it means taking a loss.  

To dive deeper into this topic and learn how you can use financial disclosures to spot irregularities, I highly recommend the book Financial Shenanigans by Howard Schilit.

• Glory Days – It’s important to estimate whether a business has become complacent and its best days are behind it or if it’s still capable of growing its earnings. 

The market expects constant innovation and growth; companies that don’t fulfill these expectations see their glory days pass them by.

Understanding a company’s financial picture and analyzing its fundamentals is the backbone of our investing approach. My team and I do a lot of this hard work and share our analysis with our Members. 

We invest in companies that generate a lot of cash and are not just resting on laurels.

• If I Should Fall Behind – The economy is cyclical, and some businesses and sectors fall out of favor with the broader market. The market may be punishing a stock unfairly because its specific industry is currently unpopular. 

The trick is spotting an out-of-favor stock that has a good likelihood of turning things around.

We like to find high-quality dividend stocks with strong balance sheets that are unloved by the market. 

If we have a strong conviction that the company will rebound, we “load up the truck,” buying more shares and collecting income while waiting until the market comes around. 

It might take a few years for that to happen, but we’re generating consistent cash in our portfolio in the meantime.

• Reason to Believe – Your investments don’t always go up; market corrections and severe downturns happen every few years. 

This volatility can make it difficult to remain steadfast with your investment goals. 

Managing your emotions is the most challenging aspect of investing. 

If you believe in yourself and the reasons why you’re investing, you can avoid selling into a panic and locking in losses. 

Now it’s your turn: What’s your favorite Bruce Springsteen song? What are some of the best investing lessons you’ve learned from your experience as an investor?

Hit reply and let me know. I’ll be including the best answers in a future email.

Also, keep an eye out for a future email from me, as I’ll soon be announcing details about a special new project I’ve been working on. 

Here’s to many happy returns!

Karl

The post Bruce Springsteen and 5 Important Investing Lessons appeared first on American Dream Investing.

I consume a ton of content – articles, podcasts, videos, apps, etc. I’ll be sharing a list with you each month of the best resources I’ve found that will help you on your journey to becoming a better investor. 

Here are 5 great resources for March:

• Resource 1: The Psychology of Money by Morgan Housel was the best investing book I read in 2020, full of great insights that will make anyone a better investor. This Twitter thread neatly summarizes many of the book’s key concepts.

• Resource 2: A Warning to ARK Investors – Cathie Wood is the hot fund manager of the year. This video illustrates some of the dangers that may be in the cards for those who chase performance in funds. There’s a reason why the disclaimer says “Past performance is no guarantee of future returns.”

• Resource 3: How REITs (and You) Are Taxed – I get asked a lot of questions about REITs (Real Estate Investment Trusts), but most people don’t think about the tax consequences of owning one in their portfolio. It can get complicated, but this article succinctly summarizes the tax implications of REITs without making your eyes cross.

• Resource 4: 2021’s Dividend Aristocrats List: All 65 Stocks – “Dividend Aristocrats” are companies with a history of raising their dividend at least 25 years in a row. This list summarizes all 65 companies in the club as well as how long their dividend streak has been going.

• Resource 5: How the Market Works – Paper trading is a great way to learn about investing without putting any real money at stake. Instead, you can use this market simulation to buy and sell stocks using a hypothetical portfolio and join contests to compete against other investors. This site is a fantastic tool to teach your kids about investing.

What are the best investing resources you’ve come across recently? Whether it’s a website, book, podcast, video, or app, I’d love to hear about it and may even feature your pick in a future column!

Reply in the comments below and let me know…

The post Your 5 Monthly Investing Resources (March 2021) appeared first on American Dream Investing.

Click the link or picture below to read the interview:

Tony Robbins: How To Survive An Economic Winter

If you missed my first interview with Robbins, click here to access it: Tony Robbins & Karl Kaufman: The Forbes Interview

The post Tony Robbins and Karl Kaufman: The Second Forbes Interview appeared first on American Dream Investing.

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It’s certainly the most personal and emotional article I’ve written, as well as the hardest to write. I think you’ll find his story compelling and inspiring. What’s even more valuable in this article, though, are the investing lessons he taught me, some of which I’m sharing now with you.

My dad had a singular focus to become a great investor in order to improve his station in life. He believed that anyone with the passion and dedication to learning can also succeed in beating the market.

Friends and family frequently asked Richard what he was investing in and what he thought about the market. My dad was always eager to share. This was the inspiration behind American Dream Investing: we wanted to educate and motivate investors to take control over their own financial destinies, just as my father did.

It’s now up to me to continue to spread his message throughout the investing community. I’ve done my best to capture many of his unorthodox investing lessons and strategies in this tribute, and I’m grateful to be able to share it with the world on as large a platform as Forbes. American Dream Investing Members have already benefited from our unconventional thinking about the market and from sharing trades in our private portfolio; we hope more investors will join in our success.

It’s been nearly five months since his passing, and I think often about how he would have reacted to what’s happened in these intervening months. I’m sure he’d be proud at how I’ve navigated his portfolio through these uncertain economic times.

While my dad is no longer here to make the trades, he entrusted me with managing his portfolio and his legacy. I hope you’ll read this article and be inspired to continue alongside us on our journey.

Please click here or on the picture below to read my tribute to my hero, Richard Kaufman:

The post Richard Kaufman In Forbes: A Father’s Day Tribute appeared first on American Dream Investing.

Richard personified the American Dream. He was born into a struggling family in Brooklyn in 1947 and at the age of seven, lost his father suddenly.

Richard was determined to make a better life for himself and as a child, spent weekends wrapped up in books at the Brooklyn Public Library. He attended Brooklyn Technical High School and was the first member of his family to attend college. He graduated from City College of New York with a degree in Chemistry, followed by an MBA from Fairleigh Dickinson University.

Richard served his country as a medic in the Army Reserves for eight years. He worked for four decades as an innovative research scientist and engineer for major food and drug companies and held more than fifteen patents. His inventions still stock shelves wherever food and medical supplies are sold.

Richard was passionate about learning the ins and outs of the stock market and was proud of his astounding 20% average annual returns over the last ten years. He retired in 2005 to focus on investing while traveling around the world with Abbe, his beloved wife of 47 years. In 2016, he started American Dream Investing as a way of educating others about his unconventional investing strategy.

“Richie” was an on-call handyman for friends and family and was known for his generosity, his wicked sense of humor, his practical jokes, his “Jeopardy!” prowess and his attempt at a falsetto while singing along to Paul Simon during family road trips. His big smile, belly laughs and warm heart will be missed by those who knew and loved him.

He is survived by his wife Abbe, his sons Karl and Jonathan, and his grandson Max, as well as his daughter-in-law Rachel and brother- and sisters-in-law Stephen, Celeste and Karen Goldman.

Richard’s philosophy in life was “it’s great to be lucky, but it’s a lot more important to know when you’re lucky.”

In lieu of flowers, please send donations to: Trustbridge Foundation

(877) 494-6890 or trustbridgefoundation.org/ways-to-give/donate/

(Members will be sent a note regarding the future of American Dream Investing later this week)

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