80-20 Investing – the Portfolio
I have decided to set up another real money portfolio to test out my ideas of 80-20 Investing, which I have previously discussed. For 20% of the effort I believe it is possible to get 80% of the investing result. The idea is fairly simple. Set up some investing criteria, and when a stock passes [...]
Lessons Learned from Mike Burry
Burry was the guru behind Scion Capital. He was a great stock picker and later made $100 million buying credit default swaps, investing against the housing bubble.
I am not going to recount the article. Read it if you are interested in what great investors do. It is a great read. I am just going to share with you the what I take away from the article.
The Problem with Back Testing Investing Strategies for Practical Investors
In surveying some of my favorite blogs recently, I have come upon something that hadn’t previously occurred to me, but could potentially alter how I invest. That is the problem with back testing Investing Strategies. Greenbackd posted an interesting starter piece on this subject called Walking the Walk, that led me back to the original blog from Aswath Damodaran called Transaction Costs and beating the Market. I have often thought there were practical problems with back testing, but I had not tried to articulate them until I read these posts. Both are excellent and worth reading. Damodaran, who is a Finance professor at NYU, and an author of Investment Fables (which I own), writes about the many ways to beat the market in general terms and then goes on to say, “Most of these beat-the-market approaches, and especially the well researched ones, are backed up by evidence from back testing, where the approach is tried on historical data and found to deliver “excess returns”.
Helping Haiti by Investing with Microloans: Humanitarian Investing
In light of the recent earthquake in Haiti and the ensuing Humanitarian crisis I wanted to address a less lucrative investment, but one that can help others in need. What do people in crisis often need to rebuild: Capital. Investors supply capital, thus humanitarian investing is not such a far fetched concept.
Investing in Low Price to Book Stocks- Value Investing Series
It may seem contrary to some investors to invest in Low Price to Book Value Stocks. After all, isn’t there a reason the stock price in relationship to assets is beaten down? Yes, probably. Is it enough that Ben Graham made money using a version of a low Price to Book investment strategy? For some investors, yes. Luckily we have someempirical evidence supporting this investment strategy. There are several studies that lay out the case for investing in these type of stocks.
Beginning Investment Strategies – John Templeton pt. 2
In looking at John Templeton’s Maxim’s in part one, we did not get to an actionable side to his investing philosophy. Good ideas but how did he really invest.
To me the story that sums up what he was about is probably the most famous tale he recounts in an interview for Smart Money. Just before World War II broke out he bought 100 shares of the 100 plus stocks that were trading on the New York Stock Exchange below 1 dollar, including 37 that were already in bankruptcy. He summed up his reason succinctly. War was looming in Europe. Things that had been in surplus before would not be in surplus in war time. He found opportunity in the political situation of his day. Three years later 100 of 104 companies were profitable. He looked for opportunities that value could be perceived that the herd of regular investors did not see.
Investing Strategies for Beginning Investors – John Templeton
This is the third installment in our Investing Strategies for Beginning Investors. The first two explored Philip A. Fisher. This week we turn to the much respected John Templeton. Sir John, if youare into that kind of thing. When you look at Templeton you are veering into contrarian territory with an important dose of Deep value investment principles. Goodie.
Investing Styles for Beginning Investors: Philip A Fisher Pt. 2
This is the second post summarizing Philip Fisher’s investment strategy see Investing Styles for Beginning Investors. Old Phil Fisher’s investing strategy was pretty straight forward. He wrote an influenial book called Common Stocks and Uncommon Profits. In that book he outlined how he evaluated a company. Fisher asked fifteen key questions ( he called them points). You could not buy the company’s stock if you were unhappy with the results of your information quest.