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My New Investment Philosophy Part V

This post is a follow on from the My New Investment Philosophy, My New Investment Philosophy Part II, My New Investment Philosophy Part III and My New Investment Philosophy Part IV posts I wrote last week and earlier this week. So with our returned set of companies in hand (matching all of our carefully selected criteria), it's time to get our hands dirty with some company specifics. Like a kid in a candy shop I don't start at the top of the list, rather race towards a company whose broad overview or industry I like the sound of. I mean, who doesn't...

My New Investment Philosophy – Part IV

This post is a follow on from the My New Investment Philosophy, My New Investment Philosophy Part II and My New Investment Philosophy Part III posts I wrote last week and earlier this week. Let's dive straight back into the criteria. Criterion Number 6 - Debt to Equity < 1 Pretty much what is says on the tin, this one. It's a comparison of a company's debt levels to its equity levels. A number in excess of one, and the company has more debt than equity and vice versa for a number less than one. Unchecked, debt's a budding investor killer - one that...

My New Investment Philosophy – Part III

This post is a follow on from the My New Investment Philosophy and My New Investment Philosophy Part II posts I wrote last week. So without delay, on to the criteria: Criterion Number 1 - Market Cap > £9M and < £900M Basically I'm looking for companies not too small to be flying well below the radar of your average investor. Minnows often quote outrageous spreads and have thinly traded markets that tend to drift south on infrequent news. That's not to say there's no money to be made from companies with a minuscule market cap, just that they're not the type of...

My New Investment Philosophy – Part II

This post is a follow on from the My New Investment Philosophy post I wrote earlier this week. As I alluded to then, my stock screening process would evolve over time. Well, with a little more reading under my belt since writing that post, the eight selection criteria I had chosen have crept up to eleven. I've tweaked a few of the numbers involved too. But that's the beauty of defining your own system, you can change things around, fiddle with the numbers and see what comes out the other end. If you don't like the results, try try again. At...

My New Investment Philosophy Part I

Spurred on by some drops in portfolio value that wouldn't have looked out of place on Wall Street circa 1929, a couple of months ago I took myself back to investment school. I needed to reinvent myself as a more astute investor. For too long I've taken too many risks, gambled too much of a shrinking portfolio on speculative buys. I realised I needed to pay more attention to profitability, cash flow, liquidity and debt levels and less attention to the spin and hype of fast-talking CEOs and the PR companies they employ. I needed re-tooling. So I scanned my bookshelves and...