#79 Ryan Bunn on The Art of Speculation

*The Art of Speculation*, written by Philip Carret in 1927, serves as a foundational text for understanding long-term equity investment and market psychology. Ryan Bunn, lead portfolio manager at Reference Equity, highlights Carret’s early recognition of the power of compound interest through retained earnings and the necessity of rigorous fundamental analysis. Key principles include maintaining a diversified portfolio of at least ten stocks across five industries, prioritizing business quality over dividend yield, and conducting independent research rather than relying on external advice. These lessons remain highly relevant for modern small-cap investors navigating market volatility. By emphasizing a patient approach to capital allocation and the importance of deeply understanding business models, Carret’s work continues to influence contemporary investment strategies, including those of renowned investors like Warren Buffett.