Bulk buying shares

IanSt

EmilyG2010 wrote: »

I have Lindsell Train global fund which has made about 13% but the Lindsell Train Japanese fund for example has made a loss and is decreasing the overall return within my ISA.

Actually something I don't understand is that HL shows Lindsell train global equity up 25 and 19% in the last two years respectively. So why is my investment only showing as up 13%?

Two possible reasons:

1) you are investing monthly whereas hl is showing the result on a lump investment over those periods.

2) the time periods you are looking at on hl for the last two years do not match the exact period that you have owned the fund. Investments like these go up and down all the time (but over time, hopefully more up than down), so you have to look at the dates to make sure you are comparing like with like.

Malthusian

EmilyG2010 wrote: »

Thanks for your concern AnotherJoe. The AIM firm I want to buy is my old company which is worth in over a billion dollars and is well established and still trying to expand. Plus, I know it well.

Unless you are planning to commit insider dealing fraud your knowledge about the company is worthless. The market knows even more than you.

If it's well-established and worth a billion dollars then why is it on AIM? Why has it not put on its big boy pants and listed on the Main Market? (A billion dollar market cap puts it well inside the FTSE 350.) Something about the disclosure requirements it doesn't like? Doing a Patisserie Valerie? I'm not saying it is, but illustrating that there could be lots going on behind the scenes that you don't know about. Unless you're the CEO. And maybe not even then.

Investing in your employer is both extremely risky and a good way to lose money, as a) people massively overestimate the amount they know about their employer b) if it goes bust, they have lost their job and lost their savings / pension as well.

However if the company offers a ShareSave scheme (where if you buy shares the company matches your contribution) you should nonetheless join it - as otherwise you're taking a voluntary pay cut. While selling the shares as soon as you can without forfeiting employer matching or tax relief.

seacaitch

Emily,

It's good to take control of your finances and seek to secure your long term financial future, but based on your own account, looking at your portfolio, and reading your commentary about buying single name stocks, it's clear that you don't really know what you're doing. This lack of know-how could mean you're on the cusp of making some big mistakes that cost you dearly.


You can either:

(1) Continue as you are, winging it, slowly learning from your mistakes along the way, and hoping that in the meantime things don't go badly off the rails for you; it might work out or it might not...

OR

(2) Recognise the risks you're taking by operating as you are in a field which you have next to no knowledge of, and seek to remedy this situation ASAP. Do this before your lack of expertise and experience results in you suffering a very significant financial setback.


(1) is the reckless, unplanned approach with lower chance of success.
(2) is the smart, prudent way, with much greater chance of success.

Your choice is likely to come down to your underlying motivating factor: is it thrill-seeking or is it financial security-seeking?


What is your overarching goal?

When you've identified that goal you can begin to formulate a plan to achieve that goal, and then begin putting that plan into action. Without a plan you'll come unstuck, either as a result of your own actions or those imposed on you by markets.

At the moment, it sounds like you're all over the place. This is not uncommon for people starting out, so don't feel too bad, but it sounds like you now need to raise your game else risk some bad outcomes as bad investment habits begin being formed.

MaxiRobriguez

If you're investing in individual companies presumably you can tell us the forward and trailing P/E ratios, current EPS, EPS growth, the revenue and income for the last five years, debt and asset total values, dividend yields, dividend growth, dividend coverage ratio, ROE/ROIC, P/B, what the continued growth story is for the next ten years, how the company fends off competition, any specific risks to the company and any systematic risks in the industry, what the management history is....

If the answer to any one of those things is "don't know" then you don't know enough to proceed with buying their stock.

If you know all that stuff, how confident are you that you are right? If you say 100% then you overestimate your abilities, because things can and do go wrong, and investment tied up in the company you work for could mean the double whammy of job loss and investment loss in one go.

I've only just started dipping my toes into buying individual shares, and it's only a small percentage of my overall assets and when doing so I'm spending days researching and re-validating with my brain I do want to proceed with this, understand the risks and feel comfortable the reward outweighs this.

It's much, much easier and a lot less stressful to park the money into funds and for the most part they're likely to do just as well.

DrSyn

EmilyG2010 wrote: »

I am a total newbie so still learning. My biggest allocation is LT Global Equity (since this has been fairly consistent, is diverse, and has produced good gains). I have sold some funds after they failed to do anything. BG global discovery I am looking to sell soon too.

Newbies should watch these first:-

http://www.kroijer.com/

https://www.ifa.com/indexfundsthemovie/


Then consider investing in low cost muti asset funds at a risk grade they are happy. Funds such as these:-

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link
https://www.hsbc.co.uk/investments/isas/hsbc-global-strategy-portfolios/

System

MaxiRobriguez wrote: »

If you're investing in individual companies presumably you can tell us the forward and trailing P/E ratios, current EPS, EPS growth, the revenue and income for the last five years, debt and asset total values, dividend yields, dividend growth, dividend coverage ratio, ROE/ROIC, P/B, what the continued growth story is for the next ten years, how the company fends off competition, any specific risks to the company and any systematic risks in the industry, what the management history is....

Why? Since all the available information is reflected in the share price, such research is a complete waste of time for private investors.

MaxiRobriguez

Economic wrote: »

Why? Since all the available information is reflected in the share price, such research is a complete waste of time for private investors.

Until the entirety of the market is controlled by algorithm, both purchasing/selling decisions at the fund AND investor level, then I don't believe the efficient market theory in the short term. The fact continues to be that market and stocks overreact to both positive and negative news.

If efficient market theory held real weight then major index valuations wouldn't have decreased by 20% in December and recovered less than three months later.

Thrugelmir

Malthusian wrote: »

If it's well-established and worth a billion dollars then why is it on AIM? Why has it not put on its big boy pants and listed on the Main Market?

Cost of listing.

Share liquidity.

EmilyG2010

Thanks for your support guys. One thing I am definitely learning here is that there are a lot of very different views and approaches when it comes to investing.

I have saved in cash for years, paid off my mortgage and now yes, I am being reckless, but only with a small percentage of my capital. I want to take risks and find out what approach works for me. MaxiRobriquez I only have a vague idea of those parameters but feel that is all I need.

Some factors that I am taking into consideration instead:

The company has a high free cash flow.
5 year return on capital is around 20%
Operating margin over the last 5 years around 20%

MaxiRobriguez

EmilyG2010 wrote: »

Thanks for your support guys. One thing I am definitely learning here is that there are a lot of very different views and approaches when it comes to investing.

I have saved in cash for years, paid off my mortgage and now yes, I am being reckless, but only with a small percentage of my capital. I want to take risks and find out what approach works for me. MaxiRobriquez I only have a vague idea of those parameters but feel that is all I need.

Some factors that I am taking into consideration instead:

The company has a high free cash flow.
5 year return on capital is around 20%
Operating margin over the last 5 years around 20%

You know you're gambling - you've said so yourself what with the specific use of the word "reckless."

You've been given some really good advice here, it would be a shame not to consider it and continue learning before moving onto the next step. Too many people jump before they're ready, get burned and then continue to make poor investment decisions later down the line because they continue to be impacted by the results of the decisions made when they weren't ready to.