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Your investment success: Skill vs. Luck

By |February 16th, 2011|Tags: , , |

 

Has your investment success so far has been based on luck?

 

If it is you are unlikely to be successful over the long term as at some point your luck will run out, most likely when the bull market ends.

But how do you know if you have been lucky or if your investment success is based on skill?

It’s easy to confuse the two. And I am sure you have never met an investor that has said his success is only based on luck.

So how do you determine if you are a skilled investor?

Knowing the difference is especially important if you invest in funds. You want to determine, preferably before you invest, if your fund manager’s track record is based on luck or if she is really a skilled investor.


I have read and thought about how to tell skill and luck apart a lot.

Not because I wanted to apply it on someone else. I wanted to know if I have so far just been lucky or if I have some skill as an investor. For if I have just been lucky I want to give my money to someone skilful as soon as possible before I lose everything.

The best writing on the subject I could find is an article by someone I admire and have followed since at least 2004.

Interview with a remarkable UK value investor and blogger – Richard Beddard

By |February 10th, 2011|Tags: , , |

 

In the article Other sources of investment ideas I mentioned Richard Beddard and his Interactive Investor blog.

Richard is without question the best source of investment ideas for small UK based companies on the internet.

And best of all…

His ideas, portfolio and analysis is all completely free.

This article is an exclusive interview with Richard Beddard where he explains his investment approach, his biggest investment mistake and life as an investment blogger.

 

Five investment opportunities – you don’t have time to hunt down, but I do

By |January 20th, 2011|Tags: , , |

 

Have you ever thought of where and how the highest consistent investment returns are achieved?

 

The answer is surprisingly simple. You have to buy undervalued companies in good financial shape.

That sounds easy enough you may be thinking. But where do I find them?

 

Over 20 years of investment experience has taught me, you have to look where others don’t…

either because they are too lazy and do not want to do the analysis, or they simply do not know where to look.


In this article I want to show you some of the unusual places I look for investment ideas, what I turned up and what the result were.

 

Value Investors Don’t Buy Gold

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

 

Have you bought gold for your portfolio or at least considered doing so?

If yes, you are in good company as some of the best investors in the world (who stayed away from gold all their investment careers) have bought some.

But if value investors are known for their appetite of high-yielding investments and their desire to “buy a dollar at fifty cents”, is gold an asset that fits into this universe?

In this short article I would like to offer you a framework of how to think about gold as a strategic investment for your portfolio.

Thoughts for 2011

By |January 6th, 2011|Tags: , |

 

Looking back at 2010 it turned out a lot better than I expected. After the market rollercoaster ride of the last few years it was nice to have a relatively stable year.

 

The main indices returned the following:

German DAX                            +16,1%

European STOXX 600                +  8,6%

US S&P 500                             +12,8%

US Dow Jones                          +11,0%

European STOXX 50                  +  0,0%

 

But what to make of 2011?

Europe’s highest dividend yields 2010 – Update

By |December 9th, 2010|Tags: , , , |

9 December 2010

 

In May each year, after publication of the annual results, I publish a list of the large companies in Europe with the highest dividend yields.

This article is an update on the performance of the 13 May 2010 article that can be found here:

Europe's highest dividend yields 2010 – 13 May 2010


The performance of the top dividend payers has been very good with both the top 10 and my selection outperforming the European STOXX 600 index.

Why and how you can beat the market

By |December 2nd, 2010|Tags: , , , |

 

When I first published the article called 13 Advantages of actively managing your money yourself  I received a lot of sceptical comments from readers.

Referring to past performance they mentioned that there was always some fund or index that outperformed them. That dear reader is a fact of investment life. There will always be a fund or index that will outperform you.
 
But you know, it doesn’t matter.

Because it is impossible to foresee.

If someone mentions that the so-and-so index or fund performed better than your portfolio I suggest you ask them a simple question.

Giving it away

By |November 24th, 2010|Tags: , , |

 

Dear Fellow Investor


I don’t like giving money away.

Its not that I am stingy or don’t like to help people, I do.

But when I do, I want to help them to help themselves. Not just give them something to help them until they need to ask again.


My idea of giving, and maybe yours too, is best described by the quote:

Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a lifetime.

 

Learn from the wisdom of great investors

By |November 17th, 2010|Tags: , , , , |

 

As a long time reader of my newsletters you know I would be surprised if I was your only source of investment advice.

In today’s newsletter I want to introduce you to one of my best sources of continuous learning about investment. And show you how you can get your hands on valuable information I have been paying for since 2006 for free.

But first something about the source.