Mwtops � Share Discussion Threads

[tara7] 26/2/2013 16:07

Some might like to keep an eye on my research.

Target growth rate 30% compound P/A.

That turns your one pound coin into about £13 after 10 years.

The stockmarket as a rule might do 7% P/A.

That is to high a risk, so go for 30%.

[rainmaker] 26/2/2013 16:05

Truely successful stockmarket Investors are rare breed so I thought I'd post a list of what I consider to personal characteristics of a successful Stockmarket Value investor. Do you recognise yourself?

Intelligent

Honest

Patient

Tenacious

Objective

Inquisitive

Determined

Emotionally stable

regards

[rainmaker] 26/2/2013 15:44

I've run my own Value Investing thread on this BB for many years and amongst the hundreds of thousands of subscribers,I'm only aware of two other Investors on these BBs that have successfully followed this strategy and have consistently done very well. Globally there are only a handful or so of very successful Stockmarket Value Investors eg Charles Brandes, Howard Marks, Seth Klarman etc who return on average circa 20% a year and are all billionnaires. People will dip in and out the strategy but you can't do that and be successful. It's been said that there is a gene for People perfectly suited to this investment style but do you have the Value Investing gene?

regards

[rainmaker] 26/2/2013 15:27

I strongly urge all new Stockmarket Investors to seriously consider a powerful investment strategy called "Value Investing" because simply it delivers higher returns with less risk.

The background to this style of investing originated in the 1920s and served it's practioners well during the great depression of the early 1930. The Man most closely associated with this style of investing was the famed Ben Graham was Warren Buffett's tutor at Columbia University, who advocated buying poorly performing Companies with low share prices which where cheap in comparison to their assets rather than the more glamorous and highly rated "Growth Companies".

Naturally this advice runs contrary to intuition, why invest in a Company that has performed badly rather than one that has done well? His views were treated with a mixture of derision and profound scepticism.However statistical studies then and since have all confirmed proved that collectively not only do "Value" stocks outperform "Growth" stocks but do so with lower risk. Ben Graham explained that the market has a tendency to unvalue poorly performing "Value" shares , relatively at least, compared to high flying "Growth" stocks.

I have to warn new Investors that the Value Investing ethos of buying a £1 for a 50 pence, on the basis of known facts and definite prospects-rather than broker estimates of future growth,is very much a minority participation and requires total commitment,dedication and tenacity.You will need to be emotionally stable and occassionally be called upon exercise extreme patience.

regards

[rainmaker] 25/2/2013 17:19

The following text will not be seen after you upload your website, please keep it in order to retain your counter functionality




"Formal educational will make you a living, self education will make you a fortune" Jim Rohn,US motivational speaker.


Here we go, a brand new thread intended solely for first time Investors nervously feeling their way around the Stock Market.I'm not going to suggest shares here but rather give general help and advice to avoid the numerous pitfalls that new Investors make and also to inspire them to great heights.

The Stockmarket is a wonderful place but you're very much on your own. It has to be emphasised that it's very much "caveat emptor" ie Buyer beware. There are no second chances, no money back guarantees, no one to complain to or blame if things go wrong -only yourself so don't screw up and give yourself every chance of being successful.


I firmly believe that anyone with a modicum of intelligence with sound reasoning and an inquiring mind who is ready, willing and able to devote a reasonable amount to time to intelligent research can be a successful stockmarket Investor regardless of their social class, educational background or status in life. In my firm opinion you don't have a background in finance or accounting skills or be an economist to be seriously successful Stockmarket investor.

If you are new Investor with no knowledge or training then I believe the odds are heavily stacked against you so you're going to need all the help, support and encouragement you can get.If you want to ask any questions then please feel free to do so and I will respond.

I'll use this opening thread to post a list of general help and advice. However before I do this I have to tell Readers that I am a Stockmarket "Value Investor" which is widely accepted as the both safest and surest way to make money in the Stockmarket so my input here comed very much from that ethos and it's central tenets ie margin of safety in purchases,avoidance of speculation,conservatism, preservation of capital etc etc but nevertheless I'm sure that whether you are a Private Investor or a member of an Investment Club, what I have to say here will prove to be of great benefit -

1) Firstly calculate a shares intrinsic value before you even consider buying. All you need to know are the Company's intrinsic value and share price, the latter you just look up.If you don't know how to calculate a Company's intrinsic value then you better learn fast. There are several ways to do this but it's best if it is calculated this figure from known facts ie the Company's assets which is the most reliable things you can use rather that say earnings.

2)Seek a substantial margin of safety in all your purchases say 50% or more.The margin of safety is effectively a buffer or cushion between the higher intrinsic value and the lower share price which protects the Investors against any unexpected future adverse circumstances that negatively affect a Company's intrinsic value, likely ensuring that the Company's unvaluation remains in tact. So if you buy a £1 coin on sale for a 50 pence piece and that £1 becomes only worth say 90p the substantial margin of safety has protected your investment and that investment still promises a satisfactory return.

3) Invest only in Companies with strong balance sheets and avoid any Company where there is a solvency risk.There are numerous academic studies that show that there are widely known forecasting models that predict bankruptcy that have around a 85% record of success. Check Altman's Z score.This information is available cheaply for a small monthly subscription of just £5.95 per month ie www.sharelockholmes.com. However just a word of warning just because a model predicts that a company is safe doesn't mean it can't go bust and vice versa.

4)Become very familiar with Value metrics that give a good idea how cheap or expensive a share is ie price/earnings, price/sales, price/book value etc etc,ratios
Also work a range of values for each Company's value metric of values for previous years.

5)Reduce risk through diversification to form a collection of shares known as a portfolio and never ever "bet the farm" by investing in just one Company-that's lunacy. This is going to protect you from individual disappointments.

6) If I had £1 for everyone that had ever said that "the stockmarket is gambling" then I would have collected many millions. Of course, it's gambling if you don't know what you're talking about and ignorance is bliss, as they say.Don't ever gamble or speculate.Just because the majority of investors will gamble or speculate doesn't mean that you should or even have to. Trust when I say through long experience that high risk definitely does not go with high reward. In other words you do NOT have to take large risk to achieve high returns and can it with low risk.

7)If you are a Private Investor then don't waste your time and energy investing in large FTSE 100 Companies but instead concentrate your effort to better effect in smaller Companies where the returns (and risks for that matter) are higher. Smaller Companies which are frequently neglected in terms of research, misunderstood should be the preserve of the private investor.

8) IMHO don't waste your time setting stop losses at arbitrary levels eg 10%,20% to protect yourself against losses IF the share you bought was undervalued AND has a substantial margin of safety ie it's true value is way above the share price then why are selling just because the share price has gone down, surely you should, within reason, be taking advantage of further weakness to buy more?!

9) Run your profits and if you are a genuine half decent Value Investor then you should run your holdings for at least two years to optimise your profits as that is generally the time it takes for a substantially undervalued Value share to go from substantially undervalued to a fair rating. Furthermore if you're going to make a profit then you want it be as large as possible.

10)Don't sell half of your holdings just because the share price has doubled.

11)Get your portfolio allocation just right.You probably don't think that this is important but trust me it is.Pick too few and you are taking on too much risk and denying yourself available funds to invest in new opportunities and also to take advantage of lower prices available in some of your holdings. Furthermore there will be shares that perform spectacularly moving up 10,20 or even fold 30 in a couple of years(in my long experience these will overwhelmingly be Value shares) and you need to buy such shares in your portfolio because they make a big difference to your overall returns.If your portfolio is too tightly concentrated then you have a far greater chance of missing such opportunities.I would suggest that you split up your funds into 30 units of 3.33% each and invest one unit in each share and then should the share price decline significantly be prepared, if the share is substantially undervalued to invest another unit.

12)IMHO never average up but always, within reason, look to average down. IMHO averaging up ie buying more at higher prices after your initial purchase is very dangerous and you are leaving yourself open to potentially large losses.

13)Don't spread bet as you don't need to and it's gambling and we all know what happens to gamblers. In spread betting potential losses are unlimited but buy a share you can only lose your investment in that share.

[soulsauce] 18/10/2008 03:15

contrarian trader without doubt one of the best and most recognisable voices in soul music, sadly missed.

[contrarian trader] 18/10/2008 03:08

Yes lovely chap.

Met him in Huddersfield whilst he was on tour quite a few years back now.

Group was past its best but they all had time for people in the hotel bar.

[soulsauce] 18/10/2008 03:05

In memory of the one and only Levi Stubbs R.I.P.

[old tom howard] 11/1/2008 08:23

SCF,

I did find them rather slow to begin with myself, but once they had got the gist of what had happened they acted promptly and restored my posting rights almost immediately.

Can I suggest you just keep at it.

I suspect they have a great deal of hassle seperating the wheat from the chaff, so to 'speak'.

[teapreacher] 22/12/2006 13:23

Another year gone(nearly). And the winner is CR again. No doubt about it:-)

[makingheaps] 06/5/2005 15:31

Sorry, didn't look properly. Bid from Land Securities at £5.15. Looks a done deal. Shame I think they could have done well over the next few years as an independent. Still I only paid £3 so can't complain.

[makingheaps] 06/5/2005 14:27

Glad to see my prediction back in February has now come to pass. Not sure what has prompted todays sudden rise. Does the RNS released a short time ago imply they have received an offer?

[makingheaps] 14/2/2005 12:23

You're right, infact its the second positive comment from the IC in as many weeks. The target price mentioned was I think £4.60 which is where the offer is today. But the continued rise today suggests there is something else going on.

The fundamentals are still there, high quality management with a strong track record, huge discount to NAV, share (CULS) buy back programme,REITS to come in 2006. I the current positive mood I can see these going over £5

[mw8156] 12/2/2005 13:48

Mention in the IC yesterday.

[makingheaps] 11/2/2005 19:38

Second biggest mover of the day. Whats up ???

[makingheaps] 11/2/2005 14:30

We're off again! Another announcement imminent ?

[chester] 11/2/2005 13:54

You still in these DJ ?

[makingheaps] 13/1/2005 15:53

Fallen back to £4. This is a top up opportunity. Once the nest announcement is made you won't see £4 again and they'll be £5 in 12 months.

[makingheaps] 11/1/2005 09:59

Nice little acquisition today. Obviously news had leaked out early.

[sammu] 07/1/2005 13:43

Dio, we oun so many of the same stocks, we seem to have a similar eye for a bargain.

What we need here is Mr Jack Petchley to come in and buy a stake. I'm suprised he hasn't already.

I only just bought in on the back of the Nov. Results.

Sam