I started this blog back in late 2013 as a way of tracking my investments and creating a tool for myself to look back on and to look at my research and reflect on my thought processes and how they impact my decisions and reasons for certain investments.
Last night I received a message on twitter from another investor with the following :
Following this tweet I thought it would be good if I can try and explain a little behind my own thought process to my investing.
Over the last 4-5 years I have been investing in Australian equities, during the first 12-18 months I really spent my time getting a feel for the market and how it works, looking at many different companies, studying books, blogs and forums and many different investment and trading strategies and psychologies to entwine myself and I guess find which path I would take.
When you take a step back and look at the equity markets there are so many variables which ultimately create many, many different paths towards many different people achieving their overall goal which is either capital appreciation or a return on capital from income through dividends or a combination of both.
I have made some observations over the past few years and there are many different groups investing and trading in the markets (too many to name) - some may be trading daily price movements long or short for a weekly pay check, some may invest over short periods of times eg. days or weeks trading swings in price waves, some may be your hard core value investors and likely a few of these are students of the great Warren Buffett.
Enough on that my point is the players in this game all have different skills and choose to play the game differently - Ultimately I respect all for the decisions they make working towards mastery of and student of their chosen craft.
During 2011 I found myself holding a handful of companies all with different weightings in my portfolio and as I researched more I made the decision that my style to suit my personality in the market was one extremely focused comprising of only a few companies.
I am not one to say what is right or wrong or what the risks associated with certain stock numbers in your portfolios as there are much smarter people than myself who can tell you the mathematical outcomes for the optimum number of stocks in your portfolio to spread risk etc
Again back to my choice which of course carries greater risk but also greater rewards if the reasons for my initial investment play out over a period of time - My time frame by the way is 5 years plus - so not for many that want to see either consistent annual returns. So I guess I take a little more of a focused venture approach to my investing - I would rather know one or two things at the deepest level then just scratching the surface on say 10-15 companies or even 5-10 companies.
So in summary to answer Claude's question :
I haven't "covered" a stock for 18 months - I am not a paid analyst or blogger getting paid to deliver daily or weekly articles alerting investors of potential companies to be the next big thing that may be flying under the radar.
I am documenting my research on a company which I have backed significantly based on my expectations over a period of time.
As for the "bear case" - I don't see Carl Icahn being too bearish on Apple. In saying that I am always on the lookout for red flags and always willing to listen to the opinions of others.
I am high conviction and focused - I am happy to admit long term if I am wrong as that is all part of the process.
I look at many companies each week some of which raise my eyebrow but these are very few and I feel no hurry and am happy to remained very focused on my own strategy.
If I feel I start to under perform certain benchmarks set by myself then I will look to reassess but to date that has not been an issue.
So thanks for the feedback Claude and I hope this post lets you see a little more into my focused strategy which may be right or wrong and time will ultimately reveal that. The lessons I learn along the way are much more valuable than the investment returns themselves.