Sean D. Emory is the Founder and CIO of Avory & Company, and currently the author of TheMarketMeter.com. Prior to this he managed equity and fixed income portfolios at GFG Capital. In addition he was an investment trustee and equity/fixed income analyst for the Stetson University endowment. Thereafter he began analyzing small cap stocks at KCM hedge fund. He earned his degree in Finance from Stetson University, and Pre-MBA certificate from Yale University. His investment style is a flexible long-short approach, searching for growth at a reasonable price. He overlays technical analysis for entry/exit points, and is economic data aware. He was also a Division 1 baseball player at Stetson University, and lives in Miami with his wife.
John Longsworth (email@example.com) is a freelance writer for hire. He specializes in technical writing, white papers, ebooks, and blog posts. His areas of expertise include investing, health, and technology. When not writing, he works as a Beachbody Independent Coach and freelance investor. For more about his services visit longjohnwriting.com.
Member of research staff at Department of Industrial Management, National University of Science and Technology in Moscow. Have some experience in mining sector. Contact me by e-mail: firstname.lastname@example.org
I started investing in individual stocks in 2008. My investment activities have been exclusively for my personal portfolio. My investment method is described below:
My focus is on companies with predictable earnings and that sell at market prices allowing above average long-term returns. I value companies based on their earnings power. In particular, I value stable earnings and growing earnings. Most of my research time is spent trying to predict future earnings. While predictions are always a guess, good companies tend to have a good track record of good earnings, competitive advantages, good managerial execution, and good capital management. Note that certain industries use certain terms that better measure companies' earnings power in their unique environments--i.e. Funds From Operations for REITs, or Net Investment Income for BDCs.
US Stocks provide an inherent advantage to investors. The overall strength of the US economy propels US companies toward increasing earnings growth. As a result, the average investor has a baseline chance of mirroring economic growth. In gambling, the house wins over the long-term due to certain statistical advantages against gamblers. In investing, investors have the long-term advantage of a growing US economy. This advantage is the primary reason that I consider stocks to be a good vehicle for wealth creation.
Certain factors can cause investors to deviate positively or negatively from expected investment returns. Taking unnecessary risk in companies with unclear or unproven earnings is the primary danger that I see. To me, risk comes from the unknown. While risk is unavoidable, I feel that controlling risk is the best way to achieve reasonable investment returns. Investment risk comes from anything that decreases earnings, such as poor capital management, competition, and changes within industry. I do not consider stock price fluctuations (beta) to have any bearing on the risk in an investment, contrary to much of popular and conventional financial teachings. Price fluctuations often provide opportunities to purchase investments at reasonable or even bargain prices.
Valuation must always be considered prior to any investment purchase. Every investment is measured against another. I start with the safest possible investment--US treasury bonds. If I consider any investment that carries more risk, it must have the potential for higher returns than a US treasury bond. Each new investment that I make must be measured against every other investment that I already own. Are the earnings as stable as my other investments? Does the price allow a reasonable return and a margin of safety if I am inaccurate in my projections?
Dividends are not a primary factor in my decision to purchase an investment. However, dividends, when reinvested, can provide an additional boost to investment returns. Compounded earnings growth is the primary engine for investment returns; dividends add a second engine for additional investment returns. While earnings are the most direct measure of a company's profitability, dividend history is also a good proxy of profitability. Another important attribute of dividends is that an investor can harvest cash without sacrificing assets. A dividend-paying company can continue to pay dividends until its earnings cannot support the dividend. Many strong companies raise their dividends annually, thereby providing protection against inflation.
My investing record is not long enough to show if I have superior investing skill. I don't expect to overachieve in bull markets. However, my method is designed to prevent unnecessary losses. Along with the Seeking Alpha community, I hope for long-term wealth generation.
Current Stock Positions:
Long the following:
CLDT-Chatham Lodging Trust
HTGC-Hercules Technology Growth Capital
MAIN-Main Street Capital
SBRA-Sabra Health Care