Principles Of Compounding With Bonds & Stocks
Learn the wisdom of seeing bonds and stocks with the same investing lens, & compounding your wealth with them, like how Buffett does it. This is the final course you’ll ever need in your investing education journey!
Let us make an honest confession: this program was created during an outburst of suppressed anger.
Over the years we’ve spent educating investors, we have discovered an alarming trend where people think they know how to invest…only to find themselves in a state of confusion and panic when their portfolio gets wiped out.
Here are some examples of businesses which have totally collapsed:
Most of this is by no means the fault of investors.
Often, these people have unfortunately been convinced by “gurus” on YouTube and advertisements, who claim they have a “system” which produces outlandish returns in a short period of time.
Yet, these “systems” start breaking once the market conditions change, resulting in portfolios that freefall into losses as years of hard-earned savings get wiped out in a matter of months or sometimes weeks/days.
We have counted at least 10 of such stories being shared with us, and we suspect many more are suffering in silence. This frustrates us on a visceral level because these people are left with no recourse, holding on to bags of rubbish and not knowing what to do with them.
Even worse, these “gurus” can themselves be quietly sitting on losses, far greater than what their subscribers incurred…so make of that what you will of their “system”.
In response to the above, we have created Principles of Compounding with Bonds & Stocks to ensure these investors will never ever lack the knowledge they need. This is provided they are really committed to changing their situation, and appreciate that it will not happen automatically but will need some work.
Using this framework has helped us not only in outperforming all the indices in 2023, it has helped us with our long term track record of comfortably outperforming the S&P 500.
Our goal is to show you how to maximise lifetime wealth by investing like a ‘business owner’ & mastering the art of long-term compounding - based on wisdom we have distilled from successful investors like Warren Buffett, Charlie Munger, Nick Sleep, Terry Smith, Pulak Prasad and Prof. Sanjay Bakshi.
Who is This Program For?
PCBS is NOT for people who are completely new to investing. This course is best suited for people who have already bought stocks and have an existing portfolio, but are not fully confident of how to conduct an in-depth analysis of the businesses they own.
If you are looking for a ‘six-steps to make a million’ or any other ‘cheat-sheets’ to choose stocks, please close this page immediately. You will not find that inside any of our courses, for the simple reason that they might give a false sense of ‘investing knowledge’ in the short term, but cause investors grievous losses over the long run. Such ‘short cuts’ entice unsuspecting investors into believing that investing is very easy.
Instead, as the name suggests, you will find that PCBS is built entirely based on ‘first principles’ of successful investing. You’ll discover why certain businesses are able to generate excellent returns over the long term, and how to purchase these businesses at the right price.
Additionally, this course is also for people who would like to park their free cash (to enhance yields) into some short term bonds/fixed-income-securities, while they wait for the right opportunities to show up…but they do not wish to buy these securities blindly (just based on ‘recommendations’ from their bankers/financial advisors).
PCBS provides them the knowledge & framework to properly evaluate any financial securities (including insurance, annuities, tax deferred investments, real estate or absolutely anything else), much better than what most of these ‘advisors’ (read ‘salesmen’) would themselves be capable of doing.
In short, PCBS makes one confident of making the most optimal decision in any area in the broad world of finance, be it analysing a stock, evaluating a bond, purchasing your next home or even deciding between a monthly membership vs a discounted yearly package on your gym membership.
Many investors mistakenly think of bonds only as an ‘asset-class’ generating fixed yields on their capital ‘without suffering the volatility of stocks’. They believe in this flawed notion of ‘volatility = risk’, but then naively try to enhance these yields on their bonds using leverage (offered by their unscrupulous bankers).
In PCBS, we first dispel all such flawed narratives and then we show our subscribers the equivalence in economic substance between bonds and stocks. This enables them to arrive at the intrinsic value of their businesses (or any asset), using the knowledge of bond pricing that we cover in detail.
How Is This Different From Other Programs?
Unlike other course providers or information online, we focus on going deeper into the key concepts of investing & finance, but make it all very easy to understand even for someone without specialised knowledge.
For example, many courses will explain how to use the return on equity (ROE) of a business to evaluate its performance. This is not wrong, but using a single metric fails to capture the complex reality of operating a business. Most of these courses do not even explain how to break down the ROE into its component parts and evaluate each component appropriately.
Therefore, to increase the robustness of our analysis, we combine multiple metrics to slice and dice a business’s performance. This helps us spot hidden gems when companies are actually doing better than what a cursory look at the financial statements suggest, or avoid traps where management is playing accounting tricks to paint a superficially rosy picture, which we can see through.
We cover an extensive array of topics in this course (as part of a broad investing framework) with a large number of case studies and practical step by step methods.
A Focus on Capital Allocation
Additionally, we dive deep into the rarely appreciated concept of capital allocation. Many course providers focus just on the operating performance of a business (which we also do, and on a much deeper level).
However, we are keenly aware that just superior operating performance does not guarantee superior investor returns, unless the business also excels in its capital allocation.
This is where a deep analysis of capital allocation comes in, and we teach you how to do it in PCBS. Put simply, it refers to an evaluation of how the management team manages the leftover Free Cash, after paying for all the mandatory expenses needed to maintain the same level of revenues.
By studying the track record of how their past allocation decisions have turned out, we can get a reasonable idea of whether the CEO is capable of enhancing shareholder value through her capital allocation decisions.
For example, it may not make sense to give out a dividend at a certain time and repaying the outstanding debt might be a better decision. On the other hand, sometimes it might make sense to set up a new factory and then buy back shares with the remaining cash, instead of repaying the debt.
These decisions can have a much more significant impact on shareholder performance in the long run, than what most investors can imagine. In PCBS, we distil everything down to basics and teach how to evaluate these decisions.
However, nothing that we cover in PCBS is based on our own subjective opinions.
In fact, these concepts have been extracted from Buffett’s (the best investor of all times) teachings from over the years. All we have done is studied them in depth and translated them into practical lessons and case studies that are easy to understand.
What Does The Program Cover?
Here is an overview of what you’ll learn in PCBS:
- Identify, analyse and value high quality businesses…we break up the various ROC metrics and do a deep dive into these metrics using case studies of businesses we analyse
- Use some of the concepts we teach in the module on ‘Bond Fundamentals’ to conservatively but very easily calculate the intrinsic value of a business, the way Buffett does it.
- Ensure that the business truly has the characteristic of a long term compounder
- The common investing mistakes that do not show up in the short term but manifest themselves in the long run.
- Think of & manage taxes, transaction expenses and other sources of leakage, which can be disastrous for the long term health of the portfolio
- How to spot hidden red flags and discover hidden gems
- How to smartly use ‘low duration’ bonds to park unused cash, while we wait for the right opportunities
- How to smartly use bond alternatives that can sometimes provide a yield that is even better
- And much much more…
This is our overall framework for compounding with stocks:
Bond Fundamentals
Here are screenshots from the spreadsheets we use to walk you through the different bond concepts in detail:
In short, this program covers EVERYTHING that you would need to understand to maximise your long term wealth building needs, without leaving anything to chance.
P.S. This program is not suitable for absolute beginners. It is more suitable for those who are already familiar with basic financial statements. If you need to learn how to read and analyse a financial statement, then we would recommend you start with our ‘Investing Fundamentals’ program first and then subscribe to this program.
What Our Subscribers Say About The Quality Of PCBS And Our MWS Courses:
- Lady from Singapore
As someone who has a degree in Finance, I approached the PCBS course with a mix of curiosity and skepticism, wondering what more it could possibly offer.
However, I'm pleased to report that my investment in this course has been one of the most value-packed decisions I've made in my quest for financial wisdom.
This course is far from your run-of-the-mill financial education.
It has shown me how seasoned investors perceive the value of money, a viewpoint that textbooks and lectures had barely scratched the surface of.
One of the most impactful aspects of the course is its focus on Capital Allocation, providing insights into how they should be managed for sustainable growth in earnings and shareholder value.
This holistic approach has revolutionized the way I look at my personal finances. From assessing my financial health to making pivotal financial decisions such as buying insurance and planning for retirement, I now approach these tasks with a strategic mindset akin to that of a seasoned investor.
The course instills an optimum investment mindset, emphasizing the importance of patience, diligence, and a solid understanding of financial basics. This mindset, I believe, is the course's most valuable takeaway, promising to serve me for a lifetime.
It's important to note that this course is not a shortcut to wealth. It doesn't entertain get-rich-quick fantasies but instead lays down the foundational knowledge and skills required to build sustainable wealth over time.
It demands dedication, a willingness to learn, and an openness to start from the basics, regardless of your previous experience or education in finance.
For anyone serious about understanding the essence of investing and willing to invest time and effort into mastering it, this course is a perfect match.
Whether you're new to finance or someone who's already working within the financial sector, the insights and strategies taught here are invaluable. It's an investment in yourself that pays dividends far beyond the financial.
Thank you to the MWS team for constantly giving us value.
- Conor Whitehead, Actuarial Science Student, Scotland
Having been a member of the MWS community for some time, I approached the PCBS course both excited and with high expectations, knowing how high-quality and specialised the content is in the team's other offerings.
PCBS is a comprehensive program covering exactly what you need to know (and what to avoid!) on your path to long-term wealth creation.
As someone who has studied a lot of investment theory formally and is getting tired of its repetitiveness and lack of practicality, what I hoped I would get out of the program was exactly what it delivered. The practicality of this course through real-life examples was enjoyable, and it is precisely what other courses fail to teach: unique, actionable expertise.
I greatly admire both Rupam and Fun Liang's thought processes and how well they can articulate ideas. Their process for long-term compounding, I believe, is unparalleled and has stood the test of time through all market conditions. This course teaches these principles and not short-term 'systems' that may or may not work while causing you a lot of sleepless nights. I haven't completed a course where there have been more 'ah-ah' moments!
The beauty of the PCBS course is that not only do its teachings cover investments, but much of the curriculum applies to other areas of your life. Knowing such important principles has helped me optimise important financial decisions in other aspects of my life.
I would also like to add that this course, combined with the other MWS courses, complement each other brilliantly and together leave no stone unturned. I feel considerably more competent and motivated after adding more powerful tools to my investment playbook.
Thank you to the MWS team for always going above and beyond and providing value that I have yet to see provided elsewhere!
- Zhivko Kanazirski, USA
I have been in MoneyWiseSmart for few years all the research or courses they have is always above and beyond. I learn the most from the their courses and Buffett Letters. PCBS is great addition to the teachings. I have about 8 years of experience in the markets and I went thru many books, letters ect. but they always find the way to teach you something you didn't know or didn't fully understand. I know it will be great source of value for anybody for the rest of their life. PCBS give great understanding of bond, investing and compounding and how to take advantage of it. This is probably the single most important thing you must learn about investing and finance. As the famouse quote says "Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it." Thank you for the great work and the value you provide to all of us.
Yang Weng Chiun, Singapore
It was only until 01 Sep 2023 when I came to a realization that my stocks investing strategy for the past 3 years was going no where as I was clinging onto hope that the stocks purchased will recover which was recommended by some seemingly good investors back then. With that realization, i signed up for MRS on 01 Sep 2023 and then in end Jan 2024, the PCBS and IF. The PCBS and IF courses are funneled to some of the most important principles in a sustainable long term investing in the stock market. The knowledge gained through these courses really gave me a great boost in confidence to stay in this investing journey for a very long run; and equally, if not more importantly, the analysis provided and clarifications given are just terrific for my personal investment decisions.
- Sikawat Thanaviratananich, Clinical Assistant Professor of Neurology, Neurologist, Iowa, USA
Neurology Residency at Case Western Reserve University, Cleveland, Ohio, USA
…The instructor used a lot of examples in the real world, with some case studies and also showed exactly where to find this information on the website (in which the newbie might have no clues to find them)…Even though I have been through many books; there are many things that I just learned from this course, maybe I did not understand it before and the instructor of this course digested it in a simpler way for me to understand…As I have read many books before starting this course, I think all practical points you would need to invest in the real world are in this course…
- Sebastian Trochym, Poland
What I like about MoneyWiseSmart is a very long-term investment approach. Unlike the majority of the market that focus on short term trading and casino approach to the stock market, Fun Liang and Rupam have the ultra long term business approach – the way real intelligent investors should always focus on.
Even if you are able to analyse businesses yourself, having a community like the one created by the MoneyWiseSmart team is very helpful, at moments of doubt when everyone seems to be happy from their 1% profit leveraged to 20%-30%. Many young people who start their investing journey forget that investing is a marathon, not a sprint.
I recommend MoneyWiseSmart to all new subscribers. If your goal is to compound wealth over decades, this is the right place for you.
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I wouldn't compare MWS to Ferrari, because men buy Ferrari to show the wealth to other people and when you buy MWS courses you get the ticket to long term wealth without necessity to show it!! Ferrari seems to be depreciating asset, while MWS is appreciating one!
Anyone who have savings and want to play the long term investing game and don't want to simply buy index, the long term investing is the game of getting to know ourselves, being patient and compounding wealth over time, I 100% recommend the course that Rupam and Fun Liang provide. I had the opportunity to finish one of the best universities in the world Peking University, Singapore Management University, Warsaw School of Economics and still found A LOT of value in these teachable lessons, remember those courses are not a short term investment but long term one, you have to be committed to spend a few hours weekly to learn the materials.
- Terence Seah, Singapore
I have known Rupam for a while and greatly admired his thought process and sharing about investment ideas. When he started this course, I signed up without hesitation. In this course, the ideas are explained concisely with clear examples. The forums where you can ask questions and share ideas are monitored closely by senior members and you will definitely get your answers promptly. You will find something for yourself, no matter you being a seasoned investor or someone starting out.
This is definitely one worthwhile investment who all value investors
Course Curriculum
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PreviewIntroduction To Bonds (22:26)
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StartUnderstanding Bond Concepts (1:47)
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StartInternal Rate of Return / XIRR Calculations (15:51)
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StartAssumptions In The IRR Calculation (6:17)
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StartBreaking Conventions (3:26)
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StartBreaking Down The XIRR Calculation (7:02)
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StartYield To Maturity (YTM) Calculation Of A Bond (5:22)
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StartChanges In Bond Price With Interest Rate (7:15)
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StartYTM Calculation Of A Bond - Semi Annual Coupon (2:19)
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StartClean Price Vs. Dirty Price Of A Bond (15:19)
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StartIntroduction to Zero Coupon Bonds (2:31)
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StartCoupon Paying Vs Zero Coupon Bonds (9:24)
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StartBond Duration (Macaulay Duration) (10:02)
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StartBond Convexity (11:05)
Frequently Asked Questions
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Your Instructor
At MoneyWiseSmart.com we offer investment education programs which guide our subscribers from all over the world, on their journey towards financial freedom, through a set of comprehensive and complementary programs. In our Multibagger Research Series offering, we publish deep dive research content on businesses which are compounders. Our Investing Fundamentals, Financial Statement Analysis and Business Valuation program provides a comprehensive step-by-step framework for identifying, analysing and building a portfolio of high quality businesses. In our Options Series program, we teach strategies for managing risk and enhancing cash returns from the long term investment portfolios, using Options. Everything we do focusses on long-term compounding.
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Rupam Deb I am a full time investor and co-founder of MoneyWiseSmart. I manage an investment portfolio using the fundamental principles of investing, as practiced by some of the best investors on the planet. I was part of the Executive Management team in a LSE listed (FTSE 100) business, where I was responsible for the largest business unit, managing over a billion dollars in revenue. However I was always passionate about value investing and decided to become a full time investor during the peak of the 2008 global financial crisis. The timing turned out to be great, NOT because I was smart enough or lucky enough to find the market bottom...but because I could pack as many investments mistakes (to learn from) as one can possibly commit within a very short period of time. This led me to a massive self-education drive, and eventually I realised that I was not alone. Millions and millions of people go about investing completely in the wrong way, focussing on the day to day movements in stock price and not on the underlying business which the stock represents. My partner Fun Liang and I, co-founded MoneyWiseSmart to address this problem. I have been fortunate to be financially free myself, and it is now our mission to help our subscribers in their journey towards financial freedom. This is our 'Why'. |
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Fun Liang Chia I am an avid value investor and co-founder of MoneyWiseSmart. After graduating from the National University of Singapore with a first-class honours in Economics, I discovered my passion in investing. My learning continued with my extensive reading about Warren Buffett, Charlie Munger, Peter Lynch and the likes, and I have never looked back ever since. Nothing excites me more than identifying and analysing great businesses. After more than 6 years of corporate experience in a NYSE-listed consulting firm, dealing with corporate finance and disputes advisory, in both Singapore and Melbourne, I left my Director role to focus full time on MoneyWiseSmart and my own investing journey. I feel delighted to be able to spend my time analysing great businesses to own and at the same time help our subscribers on their journey of lifetime compounding of wealth. |