I am a value conscious investor looking for bargains.
1) Price is what you pay, value is what you get
2) Success in investing is limiting losses when you're wrong, and maximizing gains when you're right
3) Start with business model. Margins reflect value add a company's products bring to the market place. Does the Gross Margin and the Product match? High GMs accompany differentiated products with limited competition that do not compete on price. Low GMs accompany undifferentiated products that compete on price, CAPEX spend, cyclicality.
4) How is the business financed? Be wary of companies with a lot of debt. Great businesses do not require huge debt to generate high returns on equity. There is no achievement in generating high ROEs by levering up like banks, leasing businesses (car rental, equipment rental, aircraft rental). ROA should be telling here.
4) A company's value changes because the NPV of future profits changes. NPV of future profits is a function of changes in revenues, gross margins, OPEX, leverage, taxation. A company's value appreciates when the NPV of profits goes up due to revenue growth, GM expansion, OPEX reduction, leverage (refinancing) / tax (change of domicile) reduction.
5) Markets look forward. Bottoms coincide with maximum pessimism while tops coincide with maximum euphoria.
6) A stock is not undervalued because it is cheap and it is not overvalued because it is expensive (based on traditional valuation metrics). Similarly, a stock is not undervalued because it has gone down a lot or overvalued because it has gone up a lot.
7) Look at market cap when valuing companies. Don't be overly influenced by management projections, analyst reports, share buybacks, cash on B/S, price movements, other people in the stock.
8) Companies with significant debt can go bankrupt. Cash burn typically determines if they go bankrupt before the cycle (for their industry or the economy) turns.
9) Undervalued stocks can get cheaper, overvalued stocks can get more expensive.
10) Keep emotion out of investing. You will be wrong. Unpredictable things will happen. Stay vigilant to anger, anxiety, exuberance. Stay vigilant to thesis creep.
11) Leverage will kill you sooner or later. Companies have large operating and financial leverage.
12) Have a thesis. If the thesis plays out, stay with it. If it doesn't exit. Always have a thesis.
13) Understand the business you are invested in. It's valuation and what can go wrong. Know the business inside out.
13) Don't trade.
14) Diversify. There are many good ideas in the market. Don't put your eggs in one basket.
15) Failing businesses rarely turnaround.
I am a detailed oriented investor who focuses in on a select group of companies that I believe have the potential to double in value over the next 12 months.
When analyzing a company I like to focus on four main components which include a healthy underlying business model, solid balance sheet and cash flow fundamentals, competent management and growth catalysts.
I currently am a Junior at Baruch college with work experience in investment analysis. I run a investment group at Baruch with over 25 active members who are dedicated towards investment analysis.
My goal in life from a professional standpoint is to one day be a successful hedge fund manager. I would be more than glad to speak to any one who has any advice for me as I pursue my dream.
I chose cognitive investments because I firmly believe that in order to be an effective investor over the long run you must know the company that you are investing in from a 360 degree standpoint.
Graduate Civil Engineer with my career centered on Insuring Energy Companies for Property Damage & Business Interruption. Developed a $200 million book of annual premium with a small limit which supported major Energy Company Property Insurance programs (usually $500mm to $1 billion in occurrence limit.) In this position I was fortunate to meet with many financial managers of Coal, Oil, Gas, Utility, & Refining Companies.
Mr. Beesley is a founding partner of Sequoia Partners, a boutique merchant banking and capital markets advisory firm. He has several years of experience in senior corporate communications and investor relations roles and has established strong relationships with both retail and institutional investors.
Part time trader, Basically long term investor, but here and there make some short term trades, (I'm still young, could digest some risk).
Former New Yorker, Love the state of Georgia!
Background in engineering, which after years quite honestly bored me. I consider myself a serial entrepreneur and avid day trader. Particularly interested in small biopharmaceutical & biotech. I travel extensively, and I do mean extensively and love every minute of it. Currently living between Singapore and Knoxville, TN.
Waiting for PVCT to get to $100 so I can retire. Doesn't seem like that will be too far away now!