Skip to main content

Why bother reading this?

A very good question indeed. There is no shortage of books, investment magazines, websites, Facebook pages, blogs. Why add another one to your burgeoning list? 

One thing that I’ve noticed with all of the above is that they tend to be written by people “in the know”. People who have either traded professionally or have come up with some system for making money that often involves selling extra things to people. They are followed because they are generally successful or well regarded. Their audience tends to be ordinary people who just want to learn how to make money through investing

I am one of those ordinary people. I’ve learned a lot from reading and listening to these gurus over the past eight years. I’ve been moderately successful and crucially have learned a lot along the way. All I want to do is teach people how, with some basic knowledge and some patience, they should be able to make some money in the stock market.

If you decide to carry on reading this blog (and if you do you are deemed to have accepted the terms of this disclaimer.) I intend to cover the following topics over the next few months:

1.      Investor psychology (why this is key before you do anything else)
2.    How to trade as efficiently as possible (covering ISAs, SIPPs, dealing accounts and over-trading)
3.    How to understand risk (looking at all of the risks you face and how understanding them can play to your advantage)
4.       How much to invest (how much you need to start with and how to deploy it, dependent on your circumstances)
5.       The joy of compounding (how if you understand this, it can help you make serious returns)
6.       What resources are out there to help you (both free and paid)
7.       Why size matters (looking at the relevant pros and cons of investing in large, mid and small caps)
8.       Why sector matters (understanding cyclical versus defensive stocks)
9.       Where to find ideas for stock investment (there are more places than ever to find ideas; which work?)
10.       What tools and resources are worth paying for (and which are not)?
11.      What are great signs when researching stock ideas (and worthy of further digging)?
12.   What are red flags when researching stock ideas (and should cause you further thought)?
13.   When to buy (timing can be crucial)
14.   When to sell (probably the most vexed question of them all!)

Throughout I will take some weeks when I tell stories about what has worked really well for me (and led to good success) and what has gone badly.

If you go into this, I guarantee that you will lose money. There will be stocks that will definitely lose you money. The key to success is making sure that you deal with those quickly and crucially you allow your gains (and there should be some) to outweigh those which lose. That’s why I’m going to be focusing on investor psychology first and foremost.

The usual disclaimers set out in my first blog always apply- do read them!


Popular posts from this blog

If you could hold 5 stocks for 5 years....

Our favourite holding period is forever (Warren Buffett)
Like many of you I suspect, I tuned in* to to hear the latest pronouncements of the Sage of Omaha last weekend, as Warren Buffett gave his verdict on the situation in which we now find ourselves. Even at the age of 89, Buffett's analysis remains as sharp as ever. 
There were three themes that struck me:
Confidence in the American Economy long-term For regular readers of his letters to investors, this is a common theme. That is why for many investors he advocates considering investing in a simple Index Tracker of the S&P500 as opposed to betting on individual shares. He is a big fan of the ingenuity, creativity, diligence and resilience of the US economy . It is encouraging to see that this latest crises has not shaken his view.The importance of cutting losses He admitted mistakes in his recent purchase of airline stocks- and in his case it wasn't just three grand of Easyjet (EZJ) shares. When you take 10% stakes in the …

Buying in Market Meltdowns

The most important condition for the emergence and continuation of panic is a feeling of entrapment with an impending threat.Enrique Quarantelli (The Nature and Conditions of Panic)
As I sit writing this* on a Friday evening in March 2020, the World seems in meltdown. The words above of Quarantelli seem almost prophetic and the man even has an Italian name. Entrapment is particularly apposite. We know high risk elderly people who are planning to “self-isolate” for months. Many businesses have asked their employees to work at home for an indefinite period. In the UK we all know the threat is coming and will peak in coming weeks and months. It is scary and induces worry.
Thursday March 12th 2020 should have seen horse racing at Cheltenham jostling for attention with the peak day of the largest world property shown in Cannes. The horses were far from the headlines and the property jamboree was cancelled. The reason? The threat of Covid-19/Corona Virus had induced full on Market panic. Th…

Psychology -Remembering the Golden Rules and a Salutary Tale

The risk of not having an exit plan is that you become a hostage to some destructive cognitive and emotional pressures. These unseen and sometimes instinctive influences can be a drag on your portfolio and may even make your best investments turn sour.Ben Hobson (Stockopedia)
Some years ago, I spent some time with one of the leading companies in a notoriously cyclical industry. This particular company had managed to consistently deliver market-beating returns, performing particularly well during a major downturn. I asked them what their secret was to beating the competition?
Their answer? We understand risk like none other in this industry*.
The secret to big gains in any business is a mixture of luck (often right place right time) and the ability to take a bigger risk to deliver a bigger return. This company spent an inordinate amount of time analysing all of the risks of a project. Once they had done this, their greater understanding enabled them to enter projects that the competit…