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The best 16 rules of investing you will ever read – Sir John Templeton

By |June 23rd, 2011|Tags: , |

 

Sir John Templeton was a remarkable man, outstanding investor and mutual fund pioneer and he left a great heritage when he passed away in July 2008 at the age of 95.

In this article I want to share John’s valuable 16 rules of investing, but before I do that some background information.

Good at poker

John Marks Templeton was born in the USA in 1912. He attended Yale University where he financed a part of his tuition by playing poker, a game he was very good at. He graduated in 1934 near the top of his class and went on the Oxford University in the UK as a Rhodes Scholar and earned an M.A. in law.

Upon his return to the USA he went to work as a trainee for Fenner & Beane in New York. One of the predecessor firms of Merrill Lynch.

In the depths of the Depression in 1937 Templeton co-founded an investment firm that would become Templeton, Dobbrow & Vance.

John is famous for his controversial investment in 1939 which is also the hallmark of his contrarian investment style.

 

Berkshire 2011 meeting notes – why and how to invest for inflation

By |June 2nd, 2011|Tags: , , |

 

No I unfortunately did not attend the 2011 Berkshire Hathaway yearly meeting but a good friend did.

Even thought have read quite a few reports on the meeting this one is a good summary catching the main points.

What I found really interesting was Buffett’s thoughts on investing for inflation and my friends ideas on what will be good investments.

Invested in emerging markets because of high economic growth? There is a better way…

By |April 21st, 2011|Tags: , , |

 

Are you invested in emerging markets or is considering it because of the weak economic growth in Europe and the USA?

If so this article will give you pointers on how to maximise your gains.

I am sure you have seen and heard the argument that you should invest in emerging markets because the higher economic growth will equal higher stock market returns.

It’s an interesting idea and it makes for a nice story but does the argument hold?

I can just say from past research I have seen the relationship may not be that strong.

 


Here is some good research I have found.

A fund manager I would recommend to my parents

By |April 14th, 2011|Tags: , , , |

 

If there was one fund manager I would recommend to my parents and sister it would be the one I am writing to you about today.

He came into fund management in a very unusual way.

He ended his formal education at Grade 12 in India and immigrated to Canada in 1976. In 1981, while working as a technician for a phone company, he started an investment club with C$51 000 that would later become one of the funds he still manages today.

For the last 20 years he has operated two of Canada’s most successful investment funds. So successful that in 2004 he was named Morningstar’s fund manager of the decade.

 

How patience can increase your returns

By |April 7th, 2011|Tags: , , |

 

Do you look at your total trading cost at the end of each year?

I make a point of looking at my total expenses each year at the same time as I review my past years activities and calculate my returns.

Each year I was astounded at the amount I spent just on buying and selling securities in spite of me paying on average only 0,30% per transaction.

About two years ago I took a conscious decision to trade less as I realised that trading cost me at least 0,5% of performance each year and that a lot of investments increased in price, sometimes substantially so, after I had sold them.

My idea that less transactions would equal better performance was confirmed after I read the September 2008 article by James Montier called Going global: Value investing without boundaries

 

Ever heard of the flow ratio?

By |March 24th, 2011|Tags: , , , |

 

If you've been investing for a reasonable amount of time sure you've realised how important it is to analyse the working capital management of the company.

If like me you are always looking for shortcuts to evaluate companies this article may be especially useful to you.

It is a shortcut that I've come across that helps you evaluate the working capital investment of a company quickly and very effectively

 

My biggest investment loss ever – Tell all interview

By |March 17th, 2011|Tags: , , |

 

What was your largest investment loss ever?

I am sure you can remember it exactly. The company, what year, the amount and percentage lost.

Now try this…

What was your most successful investment ever. In terms of amount and percentage gain.

I am sure it’s a lot harder to come up with the exact details.

For the life of me I could not, I had to look it up.

 

Here’s a quick way to improve the results of Joel Greenblatt’s Magic Formula

By |March 3rd, 2011|Tags: , , , |

 

Long time readers know I am a big fan of the Magic Formula investment strategy developed by Joel Greenblatt in his excellent book The Little Book that Still Beats the Market. (Click picture for Amazon page)

As you may know the Magic Formula strategy is a pure strategy based on numbers.

This means that there are also a lot of junk companies that come up when you use the formula.

Companies with large once-off profits, high historical profits that may not be repeated due to a contract loss. You know what I mean.

I always thought that the already excellent returns of the strategy can be further improved by removing the companies the Magic Formula should not be selecting.

Doing this however takes a lot of time.

You have to look at the financial statements of the company and read annual as well as quarterly reports. Not just for one year but for the last few years to find out exactly what is going on in the business.

Because all of us are pressed for time I was really glad when I found someone that does exactly that.

Meet Alan McConnochie

By |February 24th, 2011|Tags: , , , |

 

As you know I am always on the look out for investors that know what they are talking about and with successful long term track records to back it up.

During my recent holiday in South Africa I met with a person with lifelong investment experience. Just to give you an idea I subscribed to his investment newsletter Pennywise shortly after I started investing in 1988.

Alan and I had a long and interesting conversation.

After saying goodbye I immediately thought Alan was someone I want to introduce you to, especially if you follow or are interested in the South African markets.