Independence Options Play

Independence Options Play

This week is all about independence in the UK. Scotland votes on Thursday over whether it wants to become an independent country or not. Both sides of the campaign have been releasing “information” [read: propaganda] about what independence means for Scotland and also the UK. Leaving aside my personal views on the politics, I believe that independence will be incredibly damaging economically to Scotland in the short term and that will have knock on effects for the UK and hence my portfolio. I believe that the ‘Yes’ campaign is deceiving a lot of people, blinding them to the harsh reality that independence will bring. I have no objection to independence, I just think people should know what they are voting for. Here are my random thoughts on the consequences and how to profit from any market turmoil via options.read more

Rise of the Indexers

Rise of the Indexers

One of Warren Buffett’s favorite bits of advice to the average person is for them to invest a dollar amount each month into a passive index tracker fund. The wisdom behind it is simple – the average mutual fund manager under-performs the index and the average person can’t separate the great managers from the poor. The advice seems to have finally sunk in, the proportion of assets in passive funds has almost doubled in the last 10 years and now stands at 21% in the USA. That is projected to keep rocketing over the next 10 years.

But it is becoming obvious to me, that this liberation of the people from the oppression of greedy fund managers is coming at a cost – to shareholder power and activism. read more

Trawling AIM

Trawling AIM

The AIM market is one of the few places bargains exist today, because it is mainly small individual investors that trade on it. The problem is finding stocks, screeners don’t include AIM and there is limited info about the companies. So I put together a spreadsheet that trawls the internet for basic valuation ratios on all AIM companies to allow investors to hopefully find the best bargains.read more

Portfolio Update

Portfolio Update

An update on my portfolio: I have bought a new position in a GDR listed in London, as well as anticipating an exit in a couple of positions, share prices permitting. I’ve also been reflecting on some of my investment decisions and where I am getting into bad habits.read more

Revisiting Craven House $CRV.L

Revisiting Craven House $CRV.L

I haven’t look at CRV for a while, and it was recently covered by another blogger, Expecting Value, which takes the count now to two bloggers that have been skeptical of CRV. I thought I would write a post setting out my thesis again and particularly addressing the issue raised that CRV could be inflating the valuation of its balance sheet.read more

Cigar Butts and Turnarounds

Cigar Butts and Turnarounds

Last week I was holidaying in France, and when I go away I like to take a stack of reading that I don’t normally have time for. Among my stack were Buffett’s shareholder letters; I’ve read them before but they are always worth a re-read. Upon reading them I came across his thoughts on ‘cigar butt’ investing and wanted to do an article on them because there seems a lot of mis-information about them floating on the web.

I have never been a fan of ‘cigar butts’, and if I recall my positions that have had the highest gains, these have been in growing and strong companies. The market seems to realise true value far more quickly when a company is performing well – and if it doesn’t the business is growing intrinsic value for every year you are waiting.read more

AIM IT Project ($GLIF.L, $POLR.L, $EWG.L)

AIM IT Project ($GLIF.L, $POLR.L, $EWG.L)

It’s been a while since I’ve gone over some actual stocks on here, having a low cash balance in my portfolio sort of removes the motivation to research new companies. But it’s about time I got back to the AIM IT Project.read more

House Buying vs Renting

House Buying vs Renting

In my last article on the ‘Best Investment for you’ I considered John Paulson’s advice for investors to buy a home. I focused a lot on how to value a house using rental yield to get an idea of whether or not you are overpaying for an asset. What I didn’t do was consider whether John Paulson’s advice was sensible or not and a lot of the discussion in the comments focused on house buying vs renting. So I’m going to rewind and address that question. The easiest way of doing this is to crunch the numbers – lucky for you I’ve tried to do as much of the hard work as possible and here is a model of buying vs renting costs with customizable inputs.read more

The best and biggest investment for you

The best and biggest investment for you

John Paulson gave an interview on CNBC in which he described the “best investment for a retail investor”. To some it may come as a surprise that this wasn’t some stock or bond, it was to buy a home (or primary residence).

For many this will represent a large investment, possibly larger than the whole of their equity investments put together. So why is John Paulson saying it is a good idea?

Well over a period of 20-30 years the chances of house prices being below where you buy are minimal due to inflation, but in the short term it can create financial pressure on you. I look at how you can assess house prices in the short term and estimate intrinsic value.read more

Technical Analysis for the Value Investor

Technical Analysis for the Value Investor

I like to think of myself as open-minded, I try to not to let my pre-existing biases get in the way of learning new things and new ideas. But I also like to think of myself as a skeptic – unless someone can show evidence or proof that an idea is correct, I’ll have a hard time accepting it.

So when it comes to Technical Analysis you can see why I am of two conflicting minds. Like most value investors, I have a tendency to dismiss TA and just focus on valuation, but after attending some friendly get togethers with other investors in London I discovered there are people out there that have been using TA to make money for decades – maybe there is something to this TA after all?read more

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