Frequently Asked Questions

Published on 06/23/23 | The Buylyst Team | 1,777 Words

The BuyGist:

  • We invest mostly in stocks and ETFs. Well, to be more accurate, we invest in companies and themes via stocks and ETFs.
  • We provide world class tools & insights to long-term equity investors, so they’re equipped to make their own investment decisions. That’s our business.
  • We are not Asset Managers or Financial Advisors.
  • Our core value-add is our suite of research tools: The Buycaster, The Buyscreener, and The Buychecker.
  • We also provide Research & Analysis, which is not just aimless rumination. It’s the research we do for ourselves, for our portfolio, in which we keep most of our savings.
  • We publish our Portfolio and its track record, but that’s for the sake of transparency. It is not meant to be a financial recommendation.
  • Past performance is not a guarantee of future performance.

What do I get for my money?

In a nutshell: Peace of mind. We have detailed explanations in the Pricing Page. But here’s the gist:

  1. The Buycaster
  2. The Buyscreener
  3. The Buychecker
  4. Research & Analysis
  5. Our Portfolio & Transactions
  6. Long-form, deep-dive investment thesis (monthly)
  7. Weekly insights via email
  8. Access to us by email for any questions on investing

How many stocks do you cover?

We cover more than 3,000 stocks in The Buycaster: Punch in a ticker, a required return, and let the Buycaster parse through a company's financial statements to distill them down to actionable insights. The Buycaster covers >3,000 public companies, and is intuitively designed, so our members can evaluate any stock in a few minutes – better than a Wall Street pro. Think of it this way: our members have got a world class equity analyst at their disposal, 24/7, to dig into any stock they choose. We believe this gives our members a massive competitive advantage in the market.

In our portfolio, however, we usually have about 20 stocks (give or take 5) – these come with very extensive deep-dives that expand on the insights we get from The Buycaster. We usually publish one of these long-form, deep-dive reports once a month.

Do you invest in commodities or cryptos?

No. We don’t. Never have. Commodities, Currencies and Cryptos are outside our zone of competence. We stick to what we know – parsing through a company’s strategy, financials, and competitive landscape, to evaluate whether the stock price is congruent with all that. But we're happy to answer any question about them, to the best of our ability.

“Risk comes from not knowing what you’re doing.” – Warren Buffett

Do you invest in ETFs?

Yes. As of writing this, we have 2 Index ETFs in a portfolio of 20 stocks. We tend to buy ETFs if we believe that analyzing specific companies in a particular Industry or Theme is outside our zone of competence. Usually, ETFs in our portfolio represent specific industry bets. We tend to go for ETFs that are managed by large companies, have at least 500 million in assets-under-management, and have expense ratios less than 0.2%.

Are you a Value Investor or a Growth Investor?

Neither. We don’t fall in any camp. We like to invest in companies that have durable competitive advantages while their stocks trade at prices that imply nonsensically low growth expectations. Those opportunities don’t come by often, which is why we run a concentrated portfolio with low turnover.

Our Investment Methodology goes into more detail about this. For now, we can tell you that the greatest influences on our investing style have been (in no particular order):

  1. Warren Buffett
  2. Charlie Munger
  3. Howard Marks
  4. Michael Mauboussin
  5. Last but not least: our biggest Wins & Losses

Mauboussin deserves a special shoutout. His concept of Expectations Investing is the foundational pillar of our core product: The Buycaster. It elegantly bridges the perceived gap between Value Investing and Growth Investing in an actionable, executable way. Ultimately, we like to say that our style is SWAN (sleep well at night) Investing. This means maximizing our Return-to-Stress ratio. And yes, that means avoiding Black Swans. We’re fans of Taleb’s writings as well.

“Market commentators and investment managers who glibly refer to “growth” and “value” styles as contrasting approaches to investment are displaying their ignorance, not their sophistication. Growth is simply a component usually a plus, sometimes a minus in the value equation.”

 – Warren Buffett in one of his famous Berkshire Hathaway shareholder letters

How often do you trade?

As rarely as possible. Generally, that ends up being once or twice a month – either to buy a new holding or sell existing ones whose prices have reached ludicrous levels. But we have no portfolio turnover thresholds. We do what’s required to sleep well at night. And often, that means doing nothing and spending our time thinking/researching/analyzing as much as possible.

What returns should I expect if I follow you?

We don’t know. Your return expectations are up to you. We can tell you that we shoot for about 80% cumulative return in 5 years (12.5% CAGR) for every new investment we make. In some cases, we’ll outperform that number; in some cases, we will fall short. On average, we expect our portfolio to average out at 12.5% annualized over the long-term. So far, so good, as of writing this. You can find our latest portfolio performance numbers in our portfolio page (scroll through the dashboard).

Can you manage my portfolio?

No. Sorry, we cannot. We’re not investment managers. Yes, we used to work at premier hedge funds on Wall Street, but we deliberately chose not to replicate that model when we set out on our own. Since we started The Buylyst, we stuck to our knitting – we focus purely on providing tools & insights for long-term equity investors, which is what we are. Setting up a registered asset management shop is a whole new can of worms that we’re unwilling to take on at this point.

Can you talk to my Financial Advisor?

No. Sorry, we cannot. We will happily answer (in detail) general questions about investing. But we cannot (and will not) make specific financial recommendations to any of our members/subscribers. And we cannot have contact with their financial advisors because we do not want access to private financial information, even in error.

Why did you start The Buylyst?

We understand the subtext of this question: “Why did you leave cushy Wall Street jobs to struggle on your own?”

While it’s true that we left comfortable lifestyles to “fight the good fight”, we don’t regret it. Yes, we had to give up on some of the trappings of our previous lifestyle, but we’re comfortable with this short-term sacrifice for the long-term payoff. And that payoff is to live life on our own terms, wherever we want, with total financial freedom, while we’re still young-ish.

Here's why we chose to fight the good fight:

  1. While on Wall Street, we never had enough time to take charge of the return/risk profile of our own savings. Ironic, isn’t it?
  2. We had outsourced the management of our hard-earned money. But we were highly disappointed by the performance (especially from 2009-2017) of some well-known investment managers to whom we had entrusted our lifesavings. They underperformed the overall market (like most investment managers) and kept making excuses for it while charging us high fees. Sound familiar?
  3. At the same time, our friends and family kept asking us what to do with their money. We couldn’t give them helpful insights because, frankly, we didn’t have the time to do the research. The research that we did in our day-jobs dealt with asset classes that were inaccessible to our friends and family. They were only accessible to “sophisticated” (rich) investors. Elitism might be cool for a while, but it has a short shelf life.
  4. We sensed a sort of mass confusion about investing – there was too much information floating around, most of it bad advice, from people with unverifiable track records.
  5. At this point, we had just enough capital in our accounts to be able to leave our jobs (with great trepidation) and self-fund something that would help us alleviate this mass confusion.
  6. Our vision was to provide professional-grade research & insights at amateur prices. We did that for a while. But we realized that reading detailed research reports is also very time consuming. Many of our subscribers, understandably, didn’t have the time to do it. They needed something more digestible, more efficient.
  7. So, we spent 6 months building professional-grade tools that do the heavy lifting in seconds. The Buycaster, we hope, makes lives significantly easier.
  8. We want The Buylyst to be the one-stop analytical resource any long-term equity investor needs – to generate high returns while sleeping well at night.
  9. The Buylyst project is largely about democratization of world class tools & insights that work in the real world. The investment management world is notoriously elitist with expensive gatekeepers at all levels. It shouldn’t be like that. So, yes, the project is somewhat idealistic. But it would be misleading to say that we’re doing this purely out of altruism. We do have personal goals as well.
  10. Our long-term (the next 5 years) vision is to have The Buylyst be valuable to enough subscribers – enough so that we make what we were making on Wall Street – net of all Buylyst operating costs – while having total lifestyle freedom. If we can do that while empowering people with the know-how to generate high returns while sleeping well at night, we’ll have achieved our purpose.
  11. We love high returns and all that, but most of all we love doing this – connecting the dots to squeeze out insights that we can actually test out in the markets. We love the game. And that’s why keep fighting the good fight.

We wish you many happy returns.

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