IFB256: How to Work with Probabilities in Investing

Welcome to the Investing for Beginners podcast! In today’s episode, it’s all about probabilities! Of course, it relates to how you can incorporate it into your investing framework. We discuss Warren Buffet’s past bets and how he used probabilities to his advantage and also the nitty gritty problem on how to arrive on those probability numbers which what makes an alpha for investors. 

Timestamps of the episode:

-What are probabilities and how it relates to investing in the stock market. [00:30]

– Talking about Robert Hagstrom’s book, The Warren Buffett portfolio and how Warren Buffett used probabilities to his advantage. [01:48]

-Using probabilities in your investing approach. [04:05]

-Diving further, assigning probabilities into your stock buying decisions. [05:42]

-Buffett’s early 90’s Wells Fargo bet and his probabilistic way of thinking in investing in other businesses. [08:43]

-How Andrew applies probabilities in his own investing decision making. [13:22]

-The Bayesian way of assigning probabilities. [16:00]

-Real world application: Auto industry [18:40]

  • How to position a portfolio as a beginner during the Sea Change

For more insight like this into investing and stock selection for beginners, visit stockmarketpdf.com 

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You can find the transcript of today’s show below:

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