Baillie Gifford Us Growth Share Discussion Threads

[nocrapversion4] 04/7/2018 12:43

portfolio-adviser.com/baillie-gifford-funds-go-bonkers-riding-the-tech-boom/

a news report showing how the baillie gifford is outperforming dividend funds due to its high conviction, but it does state exactly what baillie gifford state, expect periods of high ups, and periods of low lows.

[nocrapversion4] 04/7/2018 12:35

Zipline international is the first of the private companies the trust has bought IMO, log on to baillie gifford, scroll to trust, then open up portfolio, list all stocks,
the last one is the only one that is not in an index.


( bet you Im right lol)


the company operates drones that can fly medical supplies to remote areas. have a google.

[nocrapversion4] 24/6/2018 15:17

finally if you follow traders rules and go for a 1:3 risk reward, that means using a 1% total loss, you base it on the weekly fluctuations of said stock/trust.


( one famous hedge fund manager goes for 1:5 risk reward, he places 5 bets of 20% total capital each,, 4% stop loss,he needs just one of them to win to make 20% gain overall.)

and buffett follows same principles, basic algebra, he looks for easy wins and bets hard.

though one of the books i mentioned last week,, insiderbuy superstocks book,think it was one where a trader went from $46,000 to $6.4, million in 2 yrs was via betting very large on high risk, he either went away rich or bust, he went bust 3 times he said,he did warn in his book, it made you either very rich or very poor!!

George soros bets big if he thinks the rewards are high enough and the risk is low.

you cant possibly ask baillie gifford to bet 10% of total capital in one single private unlisted stock,more like 1%, but you could ask them to place that bet on amazon, which they do!


the famous 1920'strader Jessie Lvermore eventually went bust, he didnt control his bet sizes, even though the volume, timing and trend was right!!!!

as this trust fluctuates about 2% a week, we can then place say 40% of our total capital in a trade, with a 2% stop loss, but prefer to use stop say bottom or below 50 day moving average.

if we get stopped out at 2% then we lost 0.8% total capital, plus trading fees,thus we can up stop loss slightly higher.(1% rule)

If you lose, and place a new trade, place the same total pounds in order to keep things equal in returns if you win.but if you lose too many in a row., then the market is too volatile and chopy and hence reduce position sizes on future trades.or stay out until it settles.

but always use max loss 1% of total capital(not the capital you placed as that is already a certain % of eg 20%, 40%).

we aim for 1 in 3 reward we then need it to go up min 6%. (2% potential drop)on a 40% of total capital trade)this translates to a 3% total reward of your 100% capital as you have placed 40% in trade.

if stock moved 4% up our down weekly, then its a trade of 20% total with 12% upside, translates to almost 3% total reward.

in summary, place your trade depending on the volatilty of said stock/trsut, eg high volitilty , low bet % of total as you allow for larger fluctuations in down and up, but still aim for 1;3 factor on trade.

in sirius minerlas it has a huge beta, very volitile, thatss why amatuers are sitting on big losses as they bet everything and rode it down all the way fast,and are now stuck with he stock..

smoother lower beta stocks lets you risk more per bet, but always have a stop loss and trailing stop loss.

if you are dealing with AIM market stops, the market makers are in charge, and its much harder game, very much manipualtion by big sellers and big buyers and the market makers,plus huge spreads, thats why the books tell you to avoid tiny stocks, but baillie gifford will own small/microcaps that arent traded often for that reason.

less manipulation, buy and longterm hold only on those, if picked correctly and have huge upside some of the winners.

with this trust,I think those on the sidelines are waiting for a pullback, that may not come for a while, but we must just go by the movements of price and execution of trade, not our gut feelingsimo.

[nocrapversion4] 24/6/2018 13:00

an example of a bad buy and hold would be sirius minerals, it is the top followed stock on stock exchange on Friday, the darling stock of amatuer buy and hold dreamers,( check out the chatrooms to see)( they tend to owners that havent been around the block so to speak,first timers and buy based on their dreams not the risks or the stock price movements and bet the farm on it)

it has no revenue, product,profits,it has huge debt, huge convertible stock, but a great story.

the anlaysts promised 60p, that was TWO years ago, the stock is still 31p.if you buy and hold over last 5 yrs , you have made 20%, its too volatile,

the traders are trading it, day, weekly traders , private and institutions.it was traded when it moved sideways for months and months last year or so, the buy and holders were going mad,blaming lousy traders for the damage to their wealth.

it is far far too volatile a stock,it moves far to fast up or down, imo. some folk have bet their life savings in a buy and hold.

I want to own 50 to 100 baggers, that dont have huge debt, arent listed on the stock exchange, arent commodity stocks, but potential future monopolies,eg i want privately listed high growth unicorns eg what the trust will own.I ALSO WANT LOW BETA trusts, eg this trust, low beta doesnt spike madly, wont catch you out, will climb smoothly and fall smoothly.

buy and hold folk that cant trade shouldnt be owning volatile stocks woned by dreamers like sirius minerals,

they would have made more steady longterm gains in low beta trusts like scottish mortgage investment trust, which i also like, but prefer this us growth trust as it is starting at a lower market capital base and hasnt been discovered yet and will own potentially more unicorns than SMT.!

[nocrapversion4] 24/6/2018 12:27

Also, the reason index followers and pension fund managers, IFA's say just buy an index and buy and hold, is they dont want you to trend follow, they wont admit stocks get bought and sold on daily, weekly, monthly emotions and ups and downs.even if the fundamentals of the stocks are very good.

plus they say active managers that churn cost more to own because of that, yes, but baillie keep their stocks for 8 yrs on average, they dont churn, and baillie dont own an index, they arent index huugers, they think min 5 yrs in advance, sometimes 10 yrs if it is unlisted private stocks.

next time you see a high turnover manager only thinking 3 months ahead, dont buy his/her fund imo.

and i wouldnt follow the permanent portfolio thinking eg 25% cash, gold, longterm gov bonds, stocks,

why cos mainly bonds will drop in price when interest rates rise, gold hasnt really went anywhere over last many, many years,

it is simply a portfolio for very very rich folk that cant decide which way the market will go, hence they try preserve their capital.IMO, own which asset is in demand, then switch which is far far easier with thousands of pounds, than it is if you are a multi millionaire in the permanent portfolio.

If any recommendations for say biggest, best stocks, eg amazon, google go from BUY to HOLD by analysts, then IMO, get a little worried, maybe the very start of a change in market?? bear??

[nocrapversion4] 24/6/2018 12:09

all signs still looking positive at mo, baillie gifford pick good stocks fundamentally, they hold long term concentrated portfolios.

but they have to hold thick or thin,even in a bear market,

we cant predict,the next one, so dont try, what we can do if if you want a slight edge imo, is own it on the positive ups,trendline following, during the accumulation periods only.(maybe short a ftse 100/250 etf, on some down days).i wouldnt short american stocks, the costs for overseas transactions plus exchange rates, doesnt make it worthwhile.


eg trade it. there are two enjoyable easy to read trading books for beginners free download, the books sell on amazon , but heres the links to the downloads.

the format is short pages, takes only an hour plus or so to read each.

(they arent written by a hedge fund manager etc, but written by a successful trading guy, trading for 20 years,,just an easy going fictional characters with great trading tips, its a bit like rich dad/poor dad book, but this author is more genuine, as richdad/poordad book author only really made his money thro writing books, not through advice in the book imo!!)


hxxp://1.droppdf.com/files/gDb1Q/new-trader-rich-trader-how-to-make-money-steve-burns.pdf

hxxp://1.droppdf.com/files/Jet0O/new-trader-rich-trader-2-good-trades-bad-steve-burns.pdf

Also in the warren buffett book the warren buffett way, it does show you how he picks stocks , he advertising for them in his yearly shareholders letters at berkshire hathaway,

he asks for pitches from owners of publicly listed stocks, that have a high ROCE and ROC,little debt,few competitors, steady growing profits,simple businesses, durable advantages, managers of integrity for sale between $1 billion and $20 billion.

he also used leverage of around 60% with his free insurance float from Geico, baillie gifford will use up to 30% leverage i believe ( usually 10-20% as stated in prospectus and hold no more than 20% of a single stock in the fund,(buffett follows that idea, bet heavy, dont dilute for the sake of, dont overdiversify), prob at a cost of say 4% borrowed interest, correct me if you can.

thats why it is so hard to replicate buffett, his returns werent so great without his free leverage.(plus he waited mostly till they were on sale, not always though, he paid handsomely for good businesses, in his later years, eg coke was already up 60 fold since its originall origins, and he still bought in)and the fact he bought complete business outright as well as partial through stocks, when you own a business fully, he said you have more control of it.!!

I know baillie gifford also use AI to help them pick stocks, they also accept emails from investors to recommend stocks they may have not noticed.

PS, from the books an important thing is analyst have price recommendations for stocks, it doesnt mean the market will follow them to that price, but follow what themr market thinks, not what you think or analyst says a stock is fundamentally worth, plenty of good stocks collapsed in bear markets,

why,? fear took over greed, folllow the trend, the emotions of the buyers and sellers IMO.

[nocrapversion4] 20/6/2018 13:05

another thing i noticed according to the book zero to one is alot of venture capitalists funds/trusts simply buy lots of start ups and hope some will double bag to pay for the ones that flopped. a spray and hope system.

this is bad thinking, all of these start up trusts and funds need to own only stocks that have the POTENTIAL to be 50 to 100 baggers.

why cos many many stocks will fail, but the ones that do grow will take time and have certain characteristics, and the return on just a few of those winnners outweight the losers by lots.

badly runs trusts and funds just look for fresh business ideas, they dont look deeper as to how big these business can become, as that causes them to simply pick 2 baggers etc which isnt enough to outweight the losers.
but only if they are multibaggers, cos the % of finding a 100 bagger is around 2%.



i feel baille gifford knows this and understands its all about scaling up and like minded thinking focused management /owners of private smaller stocks that lead to the success of the company.

I know james anderson of scottish mortgage investment trust mentions he has read and followed the book zero to one.


here is a free pdf copy of a book you can get on amazon.

100 baggers by Christopher Mayer

hxxp://csinvesting.org/wp-content/uploads/2017/05/100Baggers.pdf

[marksp2011] 17/6/2018 07:46

There is an inverse correlation between the number of posts/day and whether I want to own it :)

[nocrapversion4] 16/6/2018 11:06

the book above download, is more for the monthly trader, it does have nice tips i never thought of, its all about individual stocks, good fundamentals,cant be a mega cap with billions of shares(too slow to rise)

it must have a small free float, hence it can rise fast(but fall just as fast imo)be small caps,(not diluting no profits, same old, same old product or service, penny stocks), buy them before they are well known, buy them slowly in stages a flat phase on chart,and then ride the momentum and bet big. and dont care about capital gains tax, sell up, when buyers dry up.!!


he also says only buy stocks from b boards where the chat is rare, debate is sensible and euphoria doesnt exist, and there isnt a huge battle/arguement of bears and bulls on the same stock debating it out.


he does explain its all a game for wall street and most fund managers in very well known stocks.

the other book stan weinsteins secrets for profiting in bull and bear markets, is wiser,(wont make you a millionarie in a year type book, but will help you gain more often, and lose less and beat the index) a good book to use with fundamentals.

you then realise just cos a company is good doesnt mean folk will buy it and when they do they buy it in droves, but in cycles, peaks and troughs.

he points out your sipp should be for "safer" longterm growth funds/trusts, but if you have time every day for study,, buy some individual stocks in a share account.

you need to realise that funds/trusts cant go to 100% cash, never,buffet cant, baillie gifford cant, but you can as a pi.

and to do that if a pending bear market or the 200 day trend or even the 50 day trend in the trust/fund is broken, then there is nothing wrong with selling up , even if its for a few weeks, months, maybe even years!!

because CASH is also a POSITION.

Buy and hold and hope, isnt a position regardless how good the stock/trust/fund design is!!

sometimes mr market doesnt think straight and hence dont be a hero and hold when everyone else is selling, imo

cos the funds/trusts have major problems exiting a position holdings £ millions.

on a side note in the baille website, james anderson of SMT wrote an article lately saying he sees unlisted private stocks in china as the next best thing and admits, we are due for a pullback in this long bull market.But i agree with him saying older industries will decline in the future, traditional banks, drug companies, staples, high street shops.

I also disagree up to a point,why, cos some bull markets can last 20 yrs, and unless interest rates hit 6%, stocks are the only best place for returns.

also, according to the recent book zero to one,by Peter Thiel, (paypal founder)the author says we all believe china will be the next big economy, due to its relative growth speed and potential market size with huge population,

But, he states that china is simply copying ideas from the usa from its past, not building any new inventions/products,, trying to make all its citizens rich, which it cant do as china is a huge selection of both mega rich and mega poor.

the united states isnt that socially or financially divided.In china he states, the rich are moving their money out of the country into places and assets such as the usa,and the poor and simply hoarding cash and hoping for the best.

IMO, private USA unlisted future unicorns in this trust are where the longterm exponetial gains will be from.

PS this chatroom is very quiet, except me, lol, so the trust is obviousl unknown to the average pi, so who is doing all the buying of hundreds of thousands of pounds, and the £4.5 million the other day.

obviously either institutes, insiders or very rich investors that dont chat on chatrooms.!!

we can only hope they are long term buyers and realise that stocks in particular private ones take time to grow!!

[nocrapversion4] 15/6/2018 11:15

here is free download of a 250 page book i fancy from amazon,its costs over £20

interesting book, basically, it says trade the biggest reward stocks, buy when noone knows about them, and you expect some big news to occur and bet heavily with leverage., dont day trade, hold longtime( months, as the author is a trader) for winners.

www.scribd.com/document/190356541/SuperStocks

insiderbuy superstocks

of course its methods wouldnt be allowed for a fund manager, but closest person that would do it is george soros. making big bets if you think the reward is huge.

the author of the book doesnt follow momentum investing, as looking for the uptrend, he is allbout taking a huge position and waiting for the masssive stock price explosion if he is correct..

what can we use this to the trust, i feel that the trust is still a unknow trust, so folk waiting on sideline with cash looking imo, and waiting, also the truat does make concentrated holdings of high risk/high reward stocks also, obvioulsy not as extreme as the book author.and the trust doesnt day trade, it holds longterm winners.

i suppose the book author waits for maximum pessimism then places trade, eg he would have placed 90% of his wealth when amazon feel 80% back in 2002 and the crowd were against all internet stocks.imo.

the author explains the general public are scared of losing money, and go for steady eddie stocks, even if the upside could be 10 to one on a higher risk stock.

that is why the average investor takes years to make just avergage money in average stocks.

worlds billionaires made big money in taking well researched bets, either in companies that they owned or companies they had shares in.imo.


Within this trust as they say, is prepared to invest up to 50% in private unicorn potential stocks, then im happy for them to do that.

[nocrapversion4] 15/6/2018 10:31

quick reminder why the trust is buying private stocks,

private stocks made up only 4% of the total us stock market but it was the 4% outstanding companies that made $35 trillion value.

magazine.bailliegifford.com/Trust36/charting-long-term-growth/

and a more detailed report


www.ey.com/Publication/vwLUAssets/an-analysis-of-trends-in-the-us-capital-markets/$FILE/ey-an-analysis-of-trends-in-the-us-capital-markets.pdf

and

csinvesting.org/wp-content/uploads/2017/05/Bessembinder-Do-Stocks-Outperform-Treasury-Bills.pdf

[nocrapversion4] 15/6/2018 07:42

another couple of thoughts, that lead to diff thinking,

one, that value and growth investing are different, not according to the books i recently read, it seems the amatuers say a stock is "cheap" hence it is value and a manager styles his fund based on that and vice versa for a growth stock.In order to attract certain investors.

but not true a stock maybe cheap RELATIVELY speaking cos the prospects of the company are dire and growth stock again may appear expensive but it isnt.

this is cos most amatuers both the PI and fund manangers decide the price based on price to earnings ratio,or book value they dont dig deeper.

they need to work out future cash flow and discount it back to current value to decide if the price is fair.

And the skill , style, integrity, future thinking, innovative management have a value that a calculator or algorithm can never include.which takes us to this trust, who say that they look for these qualites before they buy a stock.

it was found out that certain stocks that appear expensive, some future monopolies in the waitng had suprised investors by their huge earnings that the current "expensive" price was still very reasonable, where as most VALUE investors wouldnt buy in and instead went for low p/e junk stocks, in old industries.

but this wasnt internet bubble calculations or the year 2000 nonsense stocks where companies were making huge losses on pipe dreams, this is current outstanding stocks like google.


second point is it appears google is not a monopoly in one sense but in another it is.

yes it is top search engine, but when you consider it is a combination of many business parts, advertising, AI,tech, it is still a small fish in a big pond, eg it only generates 3% of all the money generated by total marketplace technology stocks, so does Amazon, it only generates 15% of the online marketplace.amazon does other things such as healthcare, food and web services.

so when folks say, its a megacap stock, it cant go higher, yes it could, as it has a small finger in lots of world pies so to speak, interesting .

maybe baillie gifford should call this trust, "outside the box thinking growth trust"

[nocrapversion4] 14/6/2018 13:30

again in the book the Buffett portfolio, the current investing market is all about volatility, joe public investor hates it.

buffett says that isnt risk, risk is the the complete loss of your capital, eg a stock goes bust, or the how vunerable a company's future is, or have you overpaid for a stock or have you invested too much% in one of these types of stocks relatively speaking.

that is risk according to him.

so what to do with this trust, as it isnt a dividend paying trust, its not for income and its share price will fluctuate, so its for longterm holders that dont need to sell to pay lifes daily bills, eg those not retired or needing money today.

solution for those who may even be retired, and i dont like dividend stocks,as buffett says a company that makes too much money and doesnt know what to do with it should give it back in dividends, but the shareholder should then take these and invest that money into growing stocks.

IMO, its all about having a cash float, that you access when this trust may be up or down in the future, and it may be down some years, but that is individual years,and individual years after 5 to 10 yrs mark, but imo still ahead after 5 to 10 yrs in total compared to the index benchmark.

with this cash float you pay your bills,and avoiding selling shares when down years, 18 months to 3 yrs IMO. forget the live of dividends nonsense, as you will die leaving most of your capital behind.

that also puts the nonsense that IFA's say you need such and such amount when retired, wrong, they think of living of dividends only and dividend stocks are mega overpriced and IMO old fashioned industries.


YOU NEED LESS GRAND TOTAL. why???

you want to spend both shares and dividends if you drawdown(thats what shares are for, for selling and turning them into ready cash to pay bills.)( and drawdown your cash float if trust is down some years)(but top it up when trust has recovered to keep that all important float always present).


and the day annuites give 15% a year return on investment, i'll have one of those instead !!!!
all IMO.

PS, the statement made by Buffett recently about his widow is to invest her inheritance in 90% in an index and 10% in shorterm gov bonds is misleading , WHY.

cos it doesnt mention how much that is in £'s.

if you need £15000min a year and you have say £1 million total and are aged 65, you could go total cash and live happily

but if you are 65 and only have say £100000 and go 90% stocks and 10% bonds, then if the market is down, your 10% bonds will not be enought to pay your bills, ( that gets me back to the 18 months to 3 yrs cash float, you need)

forget %'s, if you need £15000 min a year, then keep £22500 to £45000 in cash) then rest in stocks.

buffett widow will prob receive $450 -$600 million ( he is giving away 99% of his wealth.)

she doesnt need 90/10 split, she could be mega happy 100% cash.( or 99.9% stocks, 0.1% bonds)

a famous fund manager said when questioned what portfolio advice would you give to your child if they inherited £5 million,

he said forget stocks, forget investing ,the child would be able to live very happily in £5 million cash !!!!!!!!!!!

[nocrapversion4] 14/6/2018 07:31

and if you ever wondered why individual stocks go up 20% then fall back down 5% the repeat,even though no earnings news etc has been reported etc,

it isnt always based on fear/greed, that is markets general longterm risk/reward ratio and trend over months even years..

but the short term is basically, which fund can manipulate the share price the most.

ie which fund can sell up first at the peak and buy in first at the low.

the one that has the most money has the power to do this.!!

if a fund sells £millions in a transaction and hence then lowers the stock price, the smaller funds then join in followed by the poor pi, with his/her few grand holding.

then when the big rich fund decides to buy back in, thus here comes the poorer funds/pi that comes back in next and so on and so on.the game starts and stops.

but this trust wont play that game, they only sell if they see a better stock or they made a mistake in their initial choice or they feel the maximum gains are slowing in the stock and hence buy a new one.

if you want to see it in action look up a nanocap stock on AIM and watch the manipulation that goes on!!

I have a theory that ex manager peter lynch got his outperformance that way, he owned at one point over 200 stocks, but they were mostly nano/microcaps, he would buy in, let stock rise 50% then sell up, constantly, looking for the next 50% stock he could own, perhaps it was his constant buying in that raised the stock price!!!!!!!(then he bailed constantly)

his fund started at $20 mill and finished at $1.4 bill, thus he could target those nano/microcaps but got harder as his fund grew, thus he sold up after a 14 year run( which was in a bull market anyway)


the way to judge a manager is not the short term performance of his fund/trust, that is just how popular he/she is this month, year, but judge them by the amount of profits their stocks make and are the profits of the companiers growing.

but sadly sometimes stocks wont be as popular compared to cash/bonds,regardless how much money the companies make, and so folk rotate out of them based on risk/reward, but that doesnt mean the stocks arent still making good profits, it just means stocks arent the main wanted asset class. at that time.imo

[nocrapversion4] 14/6/2018 06:58

in the book the Buffett portfolio, edition one, it states somethings i have thought about and agree with that focus (concentrated holding)investing and low turnover wins longterm.(tempted to send a copy to baillie gifford)

there is no point owning 200 stocks, it just dilutes winners,( like a football team of 200 average players) the best is around 15 stocks and turnover must be 20% or less.( this trust owns its top 10 making 51% of portfolio.

as say a general fund or tracker it will hold far far too many stocks all in equal portion,

the problem with this is some companies/stocks will be below average/some above average in return of equity and earnings per share.but a good trust wont follow that thinking and will only choose the best of the best, thus have a concentrated best ideas portfolio, until an even better stock comes along.

as this reduces tax bill for you or the fund. big big difference if you let it run for say 10 yrs and then sell, rather than sell every year. the american fund has a turnover of 13%, suggesting the stocks are kept for a period of 8 years before rotation of complete holdings.

there is a pattern that shows that holding a concentrated portfolio with heavier weighting to your best ideas gives the best results but produces higher volatilty.

this volatility is what scares the average PI. so fund managers buy/sell/buy/sell far too much , a self fullfilling prophency in order to buy what they think will rise over next 6 /12 months. this gives them a high ranking in league tables, which then attracts new punters to their fund. whilst trying to hug the benchmark in order not to scare investors or get sacked.

now baille gifford dont want this, they know it is the economic return of the companies they hold that ultimately decides the price of the stock, not the short term popularity of a manager.( eg if the stock earnings grow 20% a year, expect the fund/trust to grow 20%, some year maybe more, some less, thus proving the efficient market theory is wrong as folk buy/sell on greed /fear not via mathematical calculations of earnings of said stocks.

as if a manager doesnt perform over 12 months he is normally sacked, read literature from the trust website, they agree with this and arent interested in that thinking.they are longterm holders, so expect years below and years above benchmark, but over 5 yrs plus, preferably 10yrs, they should outperform.

so we must realise as buffett/munger said short term the market is a voting machine, longterm its a weighing machine.

with these points above, and the thinking that buffett said he couldnt care less if he didnt get a price on his stocks today, next week, next month, next year cos thats just daily punters emotions pricing a stock, as he would prefer the stock market to close for 10 yrs and still own his companies,( he says we get on fine on a sat/sun when its closed lol)

hence this links us to the trusts private stocks, as these cant be madly traded on main market thus use that thinking cant be sold for 7 to 10 yrs and it joins together the trusts thinking that private stocks want no daily price, no daily/hourly/weekly/monthly trading , just a release price in 7 yrs approx on the selling at IPO date,

and with up to 50% potentially in private stocks, it basically means the underlying economics of these stocks decides the price not MR markets daily trading mentality.

[nocrapversion4] 12/6/2018 00:47

another question to think about, bottom up or top down investing??

which is best.

baillie gifford are bottom up, they look for the best stocks to hold, based on the research that only 4% of stocks actually produce the postive overall gains in the stockmarket indexes over time.

but according to the book im reading "plan your prosperity" by Ken Fisher says average investors should not stock pick and decide if its bonds, cash or stocks to own and what % of each decides the best overall longterm outcome.(eg top down)

but baillie gifford must be also slightly top down as they choose america as the best location for unicorns to be grown.

this short report below does say a combination of both works, but longterm it maybe the stock picking that wins.

www.thebalance.com/bottom-up-vs-top-down-investing-comparison-4154879

But according to my book, it doesnt matter whether you own a stock that has found a cure to cancer or whatever, IF the overall market has a fear of stocks or better risk /reward can be found in cash/moneymarkets/bonds,

then the stock market will fall. and you cant prevent that.

you decide to go cash/bonds or short an index for that period or do what the buy and hold companies/trusts/funds do and say hold,

but as i said before the PI is nimble and doesnt need to HOLD.

But the day interest rates hit 6% or we have big deflation, stocks will still be the true place to be for growth until that happens, but i always say have cash also, depending on your lifestyle and need for nearterm withdrawals or not.

own cash if you see any bargains in stocks or have cash if you refuse to sell up and are adamant buy and holder, cos you need to avoid selling falling stocks to pay bills, hence use your cash first. normally 18 months to 3 yrs in cash is enough, to ride out falls imo, always run with that float IMO !!

[nocrapversion4] 11/6/2018 17:32

yes, at present reading

common stocks and uncommon profits,

plan your prosperity, zero to one,(notes on start ups or how to build the future),

the warren buffett portfolio:mastering the powering of the focus investment strategy,

stein weinsteins secrets for profits for bull and bear markets

[nocrapversion4] 11/6/2018 10:28

finally, traders love volatile stocks,high beta, cos they can make money from every up and down spike.

investors love non volatile stocks.low beta

plus institutes like stocks where their buying/selling doesnt cause big movements in the stock price. thats why i like the fact that this trust owns larger main market stocks, less manipulation.

but its unicorns(private stocks) (which are only owned via invitation to institiutes only)are very thinly traded and hence arent manipulated, compared to microcaps in the AIM stock market.(hyping private amatuer investors,(really are traders that trade almost hourly IMO and are lifestyle CEO stocks where excited folk bought in at the top of a hype and are now clinging on till they break even and try to get out)

read the section on the above book about those type of stocks and those type of investors!!!

these unicorns make the trust money at their IPO date,but not in the 5 to 7 yrs holding period(non trading spikes etc)

Plus thats why buffett buys low beta stocks, and then applies leverage from his "free" money from premiums paid upfront in Geico insurance he owns.(thats why it is hard for anyone to ever replicate buffett today(the trusts like this one try hard, but they have to borrow, be it a low interest rate in order to apply leverage)


he likes 5 steps forward 1 step back, rather than 10 steps forward, 7 steps back stocks.

he loves dependable solid businesses as he knows he cant just trade in and out with his $billions, he buys and holds mostly, also to avoid capital gains tax in his stocks.

my point is he got 20% a year gains over 50 yrs, but the truth was just over 10% then he applied his free leverage.!!!!!!!!!!!!!( and he started with todays equivalent of £150000 at aged 21 by being a miser and living with his folks, rarely spending any money( (ask if a 21 yr old today has £150000 saved with uni loans and tution fees, high rent etc) read the book , the snowball,------


--£150000 times 20% yearly compounded times 50 yrs plus make a huge amount !!
take the fact that baillie gifford has to pay for leverage, eg the scottish mortgage investment trust has outperformed buffett when you consider that added cost fact, and you would have done even better than the trust/buffett if you sold up fast in 2008 in the first instance of fear. unlike trusts or funds cant do!! but as a pi you can do.and bought in again when QE took place.

final final thought, i believe value investing is dead and today growth investing wins. ( james anderson of SMT calls it growth at a unreasonalbe price)but it is growth with proper fundamentals, not internet bubble growth of yr 2000, ( all pie in the sky earnings forecasts).

remember more money was made in growth stock and selling up at top , than it was waiting for years as a value investor.imo.(some value folk are still waiing years and years for amazon to fall say 80%,like it did 17 years ago, they will have a very long wait ahead of them imo)

they say this time is diff from yr 2000 bubble , i agree stocks, have real proper earnings and winner takes all stocks have been formed.
the rise in stock price is matching the growth in earnings, unlike the interent bubble was.

but the ftse 100 is actually still overvalued from the rise in 2009 to todays price , as earnings growth have been below the stock prices rises.

but in the usa they have matched like for like, thats why the states isnt overvalued.

[nocrapversion4] 11/6/2018 10:10

some things i learned and i dont agree with is that both baillie gifford and warren buffett say you have to experience big losses to be a long term fundmamental investor.

eg experience the fall of stocks in 2008.

no, these falls took almost a year to develop, you had plenty of time to get out IF YOU ARE A PRIVATE INVESTOR.

Buffett and baille gifford and many other institutes CANNOT just sell £ billions in one click of a mouse, but private investors can sell a few £10's of thousands maybe in one click or couple or clicks.

we have that advantage.the fall in 2008 wasnt folk were selling too much, it was there wasnt enough new buyers to keep the market price level or rising.fear took over!!!

of course thats an index or fund or trust,

individual stocks can collapse by50% plus in a minute on some major bad news. thats why you need to be diversified, but not too much imo.even scottish mortgage trust lost 50% in 2008, but as a pi, you had time to get out.!!


as the book in my last post I state, if the headlines in every newspaper/tv is about a forth coming recession etc, then that fear spreads, and then get out of stocks as a PI before the institutes can imo.

now my point is one i read in a report 3 yrs ago, it was a study into the rise of the ftse 100 over last say 30 yrs, its 500% excluding dividends.

but if you missed every little downward drop, your return would be 4 times higher.


that is refering now to technical investing, and folk say technical investing doesnt work, i say it does combined with fundamental investing.

technical is just putting a graph together to show how busy your "shop" is or stock/company at a particular day, week, month or even over a year.

i see it simply as say a pub, busy at night, busy at weekends, busy when it has events, quizes, new owners, new menu, happy hour, etc,

less busy in mornings, weekdays, mid month, bad weather, recessions.



if you only opened your "pub" on those busy times you wouldnt waste valuable variable overheads/ costs, so treat that thinking to your timing of your buying of stocks




combine that knowledge with the rate of profits and debts and future forecast of said pub/shop (stock) and use it to enhance your returns.

so why dont you use that thinking to your buying and selling of your stocks.!!!!

[nocrapversion4] 11/6/2018 08:01

yes the macd ( momentum index)is falling towards zero at mo,and if volume is lowering?, maybe we are heading to postion 3 in the chart( hold)

awaiting whether it will be next round of buying or next short decline position 4

However volume is still one million plus a day, good, and the trust is issuing equity above NAV, good, high demand!!!
wait and watch.

[nocrapversion4] 11/6/2018 06:42

can i point out this very good book summary to use to your advantage, along with fundamentals

its not just is a company a good or bad buy, but when should you buy or sell it.

institutes, investors follow short term fear or greed in weekly and indeed monthly patterns.

learn those to your advantage.


print this off and use it as your bible.imo.

www.atradernotes.com/single-post/2017/06/22/Book-Notes-Stan-Weinsteins-Secrets-for-Profiting-in-Bull-and-Bear-Markets

and /or

hxxps://www.debeurs.nl/Forum/Upload/2012/6160228.pdf

ps, dont let anyone tell you they are annoyed cos you bought in lower than them and sold higher than them, it is simply you did more homework than them and deserve the extra reward!!!!!

[nocrapversion4] 02/6/2018 08:16

basically, the phrase the total stock market averages 8% returns over time, is mainly due performance from these super stocks, these produced individual compounded returns between 10% and 35% every year.

which then cancelled out stocks that went bust or were taken over within the index.

most run of the mill stocks only lasted 7.5 years, But, these super stocks are still in existance many decades later.that is what baille gifford and Philip Fishers rules are aiming to own and find.

and that is why the trust says overall, more money is made in the stock market by compounding over years with the owning of the super stocks, than it is by trading daily,weekly, monthly in hot tips.imo.

i know that baillie gifford has a team of 50 deidacted us stocks researchers and a team of private stock researchers also, plus total. workforce of 1000.

and 44 partners own the company, not including directors and fund managers who will place £20 million personal wealth within this new trust.