Ask me anything
...ask my GPTs anything
“TAOS ultimately teaches that successful investing is less about predicting the market and more about managing your reactions, maintaining discipline, and continuously learning.”
TAOS GPT: ask it anything
What is TAOS?
TAOS stands for "The Art of Sprezzatura" and is a comprehensive investment philosophy developed by Mikael Syding, a former hedge fund manager. It's a framework designed to help investors manage their psychology and decision-making processes effectively. Rather than focusing purely on numbers, TAOS emphasizes the mental and emotional discipline required for successful investing.
The TAOS framework is built around twelve key investor traits grouped into four main pillars:
Patient – Wait for the right opportunity based on a strategic, mathematical foundation.
Analytical – Do your own math, track decisions, adapt to new data.
Unemotional – Avoid herd behavior, stick to your plan, don’t react impulsively.
Strategic – Have a logical, adaptable investment plan that suits your temperament.
These pillars are supported by additional concepts like resilience, self-analysis, and maintaining a Zen-like calm in the face of market volatility. The ultimate goal of TAOS is to make complex investment decisions seem effortless, even though they require deep thought and discipline behind the scenes.
Let me know if you'd like a summary of the 12 traits or insights on how to apply TAOS in your own investing.
Yes, the 12:
The twelve investor traits of TAOS (The Art of Sprezzatura) are core psychological and strategic behaviors that underpin successful investing. They are grouped under four main pillars, each designed to help investors counter emotional and cognitive biases. Here's a concise breakdown:
🧘♂️ 1. Patient
Wait for the right opportunity.
Skip good deals; wait for great ones.
Trust your strategy even during downturns.
📊 2. Analytical
Do the math yourself.
Track outcomes, refine models with new data.
Avoid echo chambers; seek truth, not affirmation.
🧠 3. Unemotional
Resist fear, greed, and herd behavior.
Stick to your plan.
Use checklists to counter biases.
🧭 4. Strategic
Have a clear, rational plan.
Backtest and adjust as needed.
Align your strategy with your temperament.
And supporting these four are eight additional traits that enhance and integrate the main pillars:
💪 5. Resilience
Learn from losses.
Prepare mentally and strategically to recover stronger.
⏳ 6. Endurance
Never go all-in.
Ensure survival through diversification and risk control.
🔍 7. Zeal
Go deep in your analysis.
Challenge your own thesis; seek to be proven wrong early.
🧘 8. Zen
Maintain calm during volatility.
Design environments and habits that reduce panic and emotional trading.
🔄 9. Agility
Be mentally flexible.
Adjust when reality changes; don't get locked into one worldview.
🌡️ 10. Temperateness
Avoid hubris after success.
Stay humble and diligent, even in winning streaks.
⚖️ 11. Unbiasedness
Base decisions on facts, not wishes or groupthink.
Fight biases like confirmation, recency, and anchoring.
🧬 12. Self-analysis
Continuously evaluate and refine your behavior.
Create feedback loops to improve judgment and performance.
Would you like a visual summary or decision-making checklist based on these traits?
How can I use TAOS?
What is the origin story of TAOS?
TIC GPT: ask my finance course anything
(and hope it doesn’t hallucinate too much)
EXAMPLE:
How can I calculate the value of a company?
To calculate the value of a company as taught in The Investing Course, you combine several key methods and frameworks. Here's a structured summary of the process:
1. Understand What "Value" Means
Price ≠ Value: Price is what you pay, value is what you get.
The difference between price and intrinsic value is called cheapness, the cornerstone of value investing.
2. Use the P = F × V Framework
P: Price of the stock.
F: Forecasts of company fundamentals (e.g., earnings, revenues).
V: Valuation multiples (e.g., P/E, EV/EBIT) the market applies to those fundamentals.
To calculate value:
Forecast future profits or cash flows (F).
Decide on a fair valuation multiple (V), based on history, peers, and expected growth.
Multiply: F × V = Intrinsic Value.
3. Apply Valuation Methods
From the 7 Stock Valuation Methods guide:
Discounted Cash Flow (DCF): Estimate future cash flows and discount them back to the present.
Multiple Analysis: Apply a P/E or EV/EBIT multiple to future earnings.
Interval Analysis: Compare current valuation to historical averages (e.g., 10-year average P/E).
CAGR/IRR: Calculate expected annual return and compare it to your required return.
Rule of Thumb Valuations: Use sector or business-model-specific heuristics.
4. Use Qualitative Forecasting
As shown in Week 3:
Assess the business model, moat, and durability.
Examine the financials (sales, margins, debt).
Judge whether growth and margins are sustainable or temporary.
5. Check Margin of Safety
The larger the gap between value and price, the better.
Use conservative assumptions to ensure a margin of safety in case your forecasts are wrong.
6. Final Step: Sanity Checks
Use the four levels of cheapness (quantitative, qualitative, trend/timing, context).
Ask the 8 Key Questions (e.g., is the company durable, is the rate of return reasonable?).
Would you like help building a simplified valuation model or reviewing an example company together?
—YES, MSFT
Excellent choice! Let's walk through a simplified valuation of Microsoft (MSFT) using the P = F × V framework from The Investing Course. This approach helps estimate a company's intrinsic value by multiplying its forecasted fundamentals (F) by an appropriate valuation multiple (V).
🧮 Step-by-Step Valuation of Microsoft (MSFT)
1. Forecast Fundamentals (F): Earnings Per Share (EPS)
As of the latest reports, Microsoft's trailing twelve months (TTM) EPS is $12.99. (Companies Market Cap)
Assuming an annual growth rate of 12%, which aligns with Microsoft's historical EPS growth, we can project the EPS over the next four years:(Companies Market Cap)
Year 1: $12.99 × 1.12 = $14.55
Year 2: $14.55 × 1.12 = $16.31
Year 3: $16.31 × 1.12 = $18.27
Year 4: $18.27 × 1.12 = $20.47(Companies Market Cap, Google)
2. Select a Valuation Multiple (V)
Microsoft's current Price-to-Earnings (P/E) ratio is approximately 28.88.
For a conservative estimate, we'll use a P/E multiple of 25, considering Microsoft's strong market position and growth prospects.
3. Calculate Future Stock Price (P)
Using the projected EPS in Year 4 and the selected P/E multiple:
Future Stock Price: $20.47 (EPS in Year 4) × 25 (P/E) = $511.75
4. Determine Expected Return
With the current stock price at $460.36, we can calculate the Compound Annual Growth Rate (CAGR) over four years:(Google)
CAGR: [(511.75 / 460.36)^(1/4)] - 1 ≈ 2.68%
🧠 Interpretation
An expected annual return of 2.68% suggests that, under these assumptions, Microsoft's stock may offer modest growth over the next four years.
In The Investing Course, it's emphasized that a higher margin of safety is desirable. Typically, a target CAGR of 15-20% is sought to account for uncertainties and to ensure a favorable risk-reward balance.
🔍 Considerations for a More Detailed Analysis
Discounted Cash Flow (DCF): Incorporating free cash flow projections and discounting them to present value can provide a more nuanced valuation.
Sensitivity Analysis: Testing various growth rates and P/E multiples can help understand the range of potential outcomes.
Qualitative Factors: Assessing Microsoft's competitive advantages, market trends, and management effectiveness can provide context to the quantitative analysis.
