What You Will Learn
Here are the main ideas that you will learn about:
Suppose you put £1,000 into a bank account that gives you 20% of compound interest every year. 40 years later you decide to collect the money but as you haven't kept track of the account, you are not sure how much money it has accumulated over the years. Can you guess how much? The answer may surprise you.
Our brains appear not to be naturally equipped to think about exponential calculations such as this one. But they can be trained nonetheless. By understanding how compounding is capable of producing surprisingly large accumulated returns in the long-run and how to adequately use this tool to value businesses you will be able to realise the success of the investment strategies pursued by personalities like Warren Buffet and Charles Munger. More importantly, you will have the tools necessary to become a successful value investor yourself.
We all have heard that "actions have consequences", but what we don't hear that often is that typically those consequences will, in turn, have more consequences. This is especially important in the world of business where competitors are constantly trying to outdo each other by anticipating their next move.
At the summer school, you will learn a powerful practical framework for thinking about any strategic situation; a framework that will equip you with the ability to make the best decisions when faced with difficult choices. Although the approach may seem unnatural to you at first, you will soon be enlightened by its power.
Rather than being rational human beings with machine-like capabilities to make choices, in reality, a lot of our decisions rely on purely instinctive feelings.
Learn how several businesses use these behavioural biases to their own advantage and how you can avoid falling into such traps. You will see various examples of such techniques and realise that sometimes not even economists can escape from them.
Opening and Managing a Portfolio
Is it better to get £10 today or £100 next month? The aim of this part of the programme is to convince you to think long-term – to become a value investor.
We will show you how to open a portfolio, tell you about the different types of financial instruments available, and explain how to keep track of your investments. To get hands-on experience, students and teachers will be equal shareholders in a real £1,000 investment in a portfolio. The Head Tutor will manage the portfolio in real-time and write annual reports to all shareholders just like professional fund managers do. At the end of 2 years, everyone will be free to collect their share.
Analysing Balance Sheets
To become a successful value investor it is necessary to be capable of assessing which investment opportunities are worth pursuing. Though you might want to invest in a business because you like their products or because you ‘believe’ in them, it is only by looking at companies' books that you will be able to accurately estimate their financial worth.
We will show you how to read balance sheets, income statements and cash-flow statements so that by the end of the course you can use this information to make well-informed financial decisions.