Have you ever wondered how much you should invest in each stock in your portfolio ? also called position sizing? You can of course just say I want to diversify my portfolio over 15 to 30 companies, divide the amount you want to invest by that number and invest the [...]
Has a friend ever forced you to read a book? It happened to me and I was glad he did because it showed me a better momentum indicator (exponential regression) that we immediately added to the screener. The book he forced me to read is: Stocks on the Move: Beating [...]
What investment strategy would have given you the highest returns in Europe over the 13 year period from July 2000 to July 2014? In this article I summarised the master's thesis of Andreas Hennes (completed at Goethe University Frankfurt am Main on 14 September 2015) where he set out to [...]
2016 was a rather boring investment year that turned out surprisingly profitable if you used the strategies that worked. I largely missed the best strategies boat as my portfolio was over 60% in cash throughout the year. In spite of that I was still able to earn a respectable 5%. [...]
You have most likely already know about the Magic Formula investment strategy developed by Joel Greenblatt and described in his excellent book called The Little Book that Still Beats the Market. It is also the book that got me started with quantitative investing. Your step by step guide In this [...]
I am sure you have heard of the Magic Formula investing, if not here is a quick summary. It is an investing strategy was explained in the excellent book by Joel Greenblatt called ?The little book that still beats the market? and it helps you find good quality companies that [...]
Are you a classic value investor?
Do you get excited the lower the share price of an undervalued good company falls?
Do you love sifting through the 52-week low, lowest PE or highest dividend yield list?
Something I used to do
I'm also a hard-core value investor but this is not something I do any more as I found an even better way to generate market beating returns.
Lead me explain.
Started the worst way possible
If you are a long time reader of my newsletters you will know that I started investing in the worst possible way.
Because of this I made every possible mistake an investor can make.
I started using technical analysis and lost money. I then followed brokers recommendations (traded a lot) but never made any real money until I discovered value investing which I have been studying and practicing over more than the past 20 years.
A new way of looking at value investing
However last year my approach to investing changed substantially.
As I have said in the past. In these newsletters I share with you what 20 years of equity investment have taught me ? sometimes at considerable cost.
I this issue I am going to tell you about an investment mistake I made. One from which you can learn a valuable lesson and prevent you from losing money the way I did.
I was going to tell you about two disastrous investments but will leave it at one today as the other is a longer story with larger losses.
I can only stand so much embarrassment at a time.
The lesson is about my investment in a small UK retailer of upholstered furniture, called SCS Upholstery (?SCS?).
Imagine you have a friend that makes a lot of commitments but only does 53% of the things he said he will do over the next year. And only 7% of the things he commits to over two years. You are planning a camping trip this year and a school [...]
Investing, in its simplest form, is about finding investment ideas, analysing companies and making decisions. Your returns can thus increase by improving any one of the three activities. This article gives you ideas on how to make better investment decision. I started a few years ago and it has helped [...]
