Earlier this week, a reader contacted me on social media with a question about the repayment of debt compared to paying or maintaining a dividend. Although I initially answered privately, I wanted to take the opportunity to write a longer response which is better suited to an article. “Companies like Vodafone and Halfords which have […]
During the final week of September, I had two positions, Anglo Asian Mining and Digital 9 Infrastructure Trust drop by 20%+ in a single session. Both rebounded strongly the next day – the proverbial “dead cat bounce” but remain heavily underwater for recent investors. Despite this, I am still holding both companies and in this
Every investor knows the saying that investments can go down as well as up in value. Knowing and seeing this in action are two different things however, and my perception over the last 24 months has been of a huge number of investors disappearing from social media. After a decade of low interest rates and
Being a patient investor in a persistent market downturn Read More »
Anyone that runs their own portfolio will have heard the saying “bear markets turn traders into long term investors”. Outside of the obviously facetious element of the quote, it raises an interesting point about loss aversion – mainly that many retail investors seek to avoid crystallising losses in the hope of a share price rebound
As we leave 2022 behind, it’s traditional for many of us to review our performance over the last twelve months. I thoroughly enjoy reading these reviews and as usual there has been a wide spread of results across the board. A small number of investors I follow managed to turn a profit, my 11% loss
A few weeks ago, I spoke to a fellow investor about a new company I added to my portfolio which they had already held for a few years with little joy. The share price is down fairly heavily over the last two years from a high of a little over £6 in 2018 to a
Having covered a number of company fundamentals that demonstrate how a company is operating (Turnover, Profitability and Leverage), this article will examine the Balance Sheet, which provides an overview of a company’s assets and liabilities, as well as the shareholders’ equity at a given point in time. Each of these sections includes many sub-accounts which
Understanding Company Fundamentals – Balance Sheet Read More »
Leverage, or debt as it is more commonly known, is a term that refers to money that a company has borrowed. When a company wants to invest in new assets, it needs cash to pay for them. That cash can come from one of three sources – sales and investment returns, equity capital or debt
Profit is an economic concept which occurs when the income from an economic transaction exceed the costs of carrying it out. For example, if a company sells windows that cost £500 in material and, plus £100 in labour and transportation costs, but they receive £1000 from the sale of the window, then their profit is
Understanding Company Fundamentals – Profitability Read More »
Turnover is a financial term which refers to how much cash has entered a company’s bank account in a given period. In most companies, it reflects the value of its sales in that year, either of goods or services, but before costs such as salaries and taxes. Most investors like to see an increasing turnover
A friend of mine was recently contacted by a fine wine salesman. The pitch was fairly straight forward. In addition to buying wine to drink, individuals can also create investment portfolio of fine vintages. Wine is a finite product for which demand is currently outstripping supply. The great chateaus of the world only produce so many
Reader Question: Should I consider investing in fine wine? Read More »
Once we get past the age of about ten, most of us start to see the importance of knowledge. Without it, we don’t see risks, understand how to get what we want or really understand the world around us. Most people that describe themselves as businessmen follow the stock markets, monitor local real estate develops,
The importance of developing a range of knowledge Read More »
At a recent dinner with a friend, we were talking about my blog when my friend asked me a pretty simple question; I’ve always had the view that savings and investments are a good way to protect myself from the uncertainties of life. Given that you lost your parents early on, how do you view
Reader question: How much money should I be saving in my 20s? Read More »
Being a business student, I find the structure and thinking of much of the business world a useful lens for viewing aspects of my personal life. Once a year, I imagine sitting with my ‘board’ and presenting my progress for the year. If I’ve done well, I could imagine that external investors (my girlfriend, my
If your household were a company, would it be an attractive investment? Read More »
