Welcome to my opening Blog which briefly covers my investment journey.
As a private investor, I have been investing in the markets for about twenty-five years now and read countless books and articles on so many aspects, variations and approaches on the subject. There is just so much information out there that unless one is careful you could easily suffer overload as you try to learn and develop your style of investing. One thing is for sure, you just never stop learning and only a fool does not learn from past mistakes.
Professionally I am a Charted Chemist and until 2012 I managed a large laboratory analytical service in East Anglia. I like to think that a combination of investments and maximising AVC pension contributions paved the way for me to take an earlier retirement from science earlier than would have been the norm. A fair amount of my work involved managing and negotiation of a multi million pond budget and all of the accounting that goes along with that process so although by no means an accountant, I am fairly comfortable with figures.
So the first question is, why have I decided to write a blog? Well, the answer is that I enjoy writing and sharing my experiences and thoughts on the market. I am most definitely not a tipster; you will find those in newspapers and investment magazines. Any thoughts I share here are just ramblings of my way of thinking on the markets and I can honestly say that my views have not always been correct.
Why do I invest? Well, simply I have spare funds available that even if the markets fell to pieces, the financial effect would not cause me to lose my house or materially affect my lifestyle. I would still be able to take holidays and buy my season ticket to watch the hatters. With the funds I use, I get great enjoyment from my investment activities. Sometimes you can get knocked back by the overall market direction or a profits warning from a company you hold shares but that’s the name of the game.
One thing that I have learnt through this investment journey is that if investing directly yourself causes you to lose sleep at night, then simply just don’t do it. For the totally risk averse it's much better to really avoid as much risk as possible and use the likes of high-interest savings accounts, premium bonds etc. Of course, these days the interest rates available are fairly desperate but at least the money is in a safe place. I do have fall back money in premium bonds and inexplicably still get a buzz from the usual £50 of so that comes through each month; gosh, I am a winner!
Early days, in fact in very early days I thought the way to modest luxuries was to spend time studying form and invest via yankee accumulators at the bookies. It was fun but I, unfortunately, was not getting rich. I then read an article John Banks the legendary Glasgow bookmaker. He simply said that the massive majority of punters, in the long run, lose money but because of psyche they only remember the winning punts and come back again and again. Taking John’s comments to heart, I started keeping a simple account of activities and as expected, John was right; my days at the dog track and bookies came to a close.
These days I keep good accounts and track every investment enabling me to have a finger on the pulse of my investments. What I have learnt during this ongoing investment journey is that in my opinion there is just no such thing as getting rich quick; of that I am totally convinced. The way to decent returns, which may well not equate to wealth, is in my humble opinion, founded on good research, patience and reinvestment of dividends. As one of the oldest sayings on Wall Street attributed to Warren Buffett goes something like "Let your winners run, and cut your losers." It's easy to make a mistake and do the opposite, pulling out the flowers and watering the weeds.
When it comes to annual returns, I have changed my stance in the last decade or so. I used to take pride in beating the FTSE total return, but if that falls by 5% in a year and I fall by 3% then that’s hardly a celebratory achievement. These days I target making a decent positive return with dividends reinvested; if I can average over 10% return per year over a sustained period I am happy, any higher leads to real joy.
An area I will probably often return to is my dislike of the nonsense that goes on within bulletin boards. Granted some posts are very worthwhile but it is the most talked about/most posted about areas that concern me. All too often these are poor quality companies that the bulletin board morons descend upon and, unfortunately, suck in the gullible. Not for me I am afraid, I prefer drip feed boredom.
Sources of data
Just about all of my investments come from using reported company data as provided by the likes of Sharescope, Sharelockholmes and Stockopedia; as you can see I am a bit of a data freak. I take this data and these screen/sieve the data to reduce the near on 2000 starting stocks down to a handful that meet criteria that I find attractive. I will then look in more detail at individual companies including outlook statements, trading updates and anything else that appears relevant but I won’t go anywhere near those dreaded bulletin boards.
I don’t use newspaper tips, IC tips, Shares magazine tips, or tip-sheet tips. My logic with the two main weekly magazines is that by tipping so many shares each week that it’s likely in the course of a year they would have tipped a very significant percentage of the total market and by definition some will prove a success whilst others not so. Another issue with any form of tip is that it immediately creates a false market in the smaller companies as the shares are usually marked up for a few days or couple of weeks after the publication of the tips. On the other hand it’s nice to see a share that you currently hold tipped but pragmatically you know that given a few weeks it will drift back to the norm. Also the cynic inside of me cries out that if these tipsters were that hugely successful then would they really be publishing and sharing their tips!!
Anyway, enough for now: I hope you enjoyed my first whittling.
Welcome to my Blog Page - I hope you find my whittling on to be of some interest. I am a private investor who is happy to share thoughts on the market and individual stocks. Please remember that I am definitely not offering tips or investment advice.