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Beating Buffett: How You Can Too

Chairman um The Loomba Trust
6. Mar 2015
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Beating Buffett: How You Can Too

  1. Beating Buffett Beating Buffett How You Can Too
  2. Beating Buffett
  3. Examples – Straight Ups
  4. Examples – Straight Ups
  5. Examples 1 = It can take the market time to see value, but the stock rarely falls below our entry price because it was already undervalued 2 = Market sees what we saw and price rises
  6. Examples 1 = It can take the market time to see value, but the stock rarely falls below our entry price because it was already undervalued 2 = Market sees what we saw and price rises
  7. Examples 1 = It can take the market time to see value, but the stock rarely falls below our entry price because it was already undervalued 2 = Market sees what we saw and price rises
  8. Examples 1 = It can take the market time to see value, but the stock rarely falls below our entry price because it was already undervalued 2 = Market sees what we saw and price rises
  9. Dear Alpesh, this is absolutely awesome !! Well done. Great going. Ashok Vaswani, CEO Barclays Business and Retail Banking Outstanding!!! Congratulations Ravi Bulchandani, Head, JP Morgan Private Bank
  10. Source: Trustnet
  11. How You Can Too
  12. MISSION: THE BEST INVESTOR SOFTWARE IN THE WORLD
  13. Financial Times Forecasting Competition Rank Number 1
  14. ‘Gets to the heart of the matter of trading by clearly elucidating the methodologies of successful trading strategies while capturing the ineffible ethos of singlular successful traders.’ Pat Arbor, Chairman, Chicago Board of Trade. (World’s Largest Exchange)
  15. Published in 8 languages Top 5 Bestseller
  16.  Thousands of live trades  20+ years of working with world’s leading traders  16 books on trading strategies based on research and interviews with leading industry experts  Worked with other traders to optimise accuracy  Since 1995 to present continuously perfected THIS system
  17. Students Full Time Mothers Full Time Plumbers Professional Traders School Teachers Retirees My Talk At Bloomberg
  18. 23 Growth Stocks Income Stocks Value Stocks •Disciplined security analysis: Valuation, Growth (eg. Earnings and revenue growth), Income (eg dividend yield). Thereby avoiding the pitfalls of each style and capturing the best of all three theories for selecting stocks. •Qualitative and Quantative: (i) determining the variables to use to identify stocks falling in each style (eg. PEG), and then (ii) determining the range of relevant values (eg. PEG 0.2-0.8) for each criteria (iii) weighting those criteria Money Management ’000s Stocks Portfolio Circa 14 Positions Stocks Screen Transaction Risk Management •Low Transaction Costs: Our strategy is inherently not a high turnover strategy thereby reduces portfolio churn and transaction costs. •Money Management: 25% per position hard stop-loss means no position can impact portfolio more than 1.8%. •Risk impact of our 14 positions have same impact on portfolio downside as a GBP 200m equity funds largest 10-14 positions.
  19. 24 Value Growth Income: USP Downside of Traditional Styles & Other Funds Our way for generating maximising risk-adjusted returns Value Stocks: can remain undervalued for long periods. Can be excessively undervalued because business is not viable. As our stocks are also growth stocks, they tend to be spotted earlier by big funds. We avoid extremely strongly valued, or strongly growing or strongly yielding stocks –as these too can be problematic. Income Stocks: Yields alone do not ensure shareholder returns Yields provide downside protection. If the stocks price should fall, yields increase, ensuring a floor to price falls. But growth and valuation criteria mean the company should get selected rapidly and rise again. Growth Stocks: Can be over-valued and not exceed expectations causing price declines Our stocks are already relatively undervalued so strong growth means expectations are usually exceeded resulting in strong price rises. Exits based on entry criteria We do not want to exit when our stocks are, say, fully valued. We want them to be overvalued when we exit. So our exits are based not on our entry criteria, but time – the optimal time, without back-test over-fitting, we think it takes for shareholder returns to be maximised, which based on VGI criteria is 12 months.
  20. 25 Value Growth Income: USP Transaction costs cause cost drag due to large number of portfolio holdings Our portfolio stocks have the same downside impact as the largest 10-20 holdings of a GBP200m fund. We don’t need 100 holdings and the costs inherent in them to diversify away risk. But our concentration generates Alpha due to our stock selection skills. Style Drift By having a combination of styles we should ‘smooth’ the effects and downsides of any one style. Poor bear market performance Our stocks represent target ‘flight to quality’ stocks in bear markets.
  21. 26 DTZ 31/12/04 30/12/05Apr Jul Oct DTZ Holdings PLC Feb Mar May Jun Aug Sep Nov Pence 3 day bars (dyn.) Ord 450 450 400 400 350 350 300 300 250 250 200 200 2000 2000Volume (Daily) - th's ScopeShareChart (c)www.sharescope.co.uk Growth results beat expectations bring undervalued company to market attention (i) in months not years (ii) with room for price rises due to low valuation Price drops limited because yield and valuations rise providing a protective floor to falls
  22. 27 Growth results beat expectations bring undervalued company to market attention (i) in months not years (ii) with room for price rises due to low valuation Price drops limited because yield and valuations rise providing a protective floor to falls
  23. AlpeshPatel.com MISSION: THE BEST PRIVATE INVESTOR SOFTWARE IN THE WORLD HOW TO GET INFRONT OF COMPETITORS – ALPESH PATEL SPECIAL EDITION SHARESCOPE CUSTOMER SUPPORT EMAIL HELP BETTER PRODUCTS PRICE PHONE HELP ON LINE HELP FREE UPGRADES STOCK IDEAS INTUITIVE NICE DESIGN ADVANCED CHARTSALL FUNDAMENTALS DAILY & MONTHLY NEWSLETTER STOCK COMMENTARY STOCK/ ETF/ ADR/ US/ FUNDS? FX/ COMMODITIES BEGINNER/ INTERMEDIATE CHEAP? AVERAGE? LUXuRY? TEST IT SINCE 2004: 17% pa returns from Alpesh Patel Special Edition stock picks INDUSTRY AWARDS EG. ROE
  24. 1. Exclusive subscriber only webinars 2. Exclusive subscriber only videos on trading and investing 3. Access to my personal Facebook page to keep in touch 4. Access to my Twitter for social investing 5. My monthly newsletter and free access to my daily newsletters on stocks and FX 6. Exclusive my top picks reports during the year
  25. www.sharescope.co.uk/alpesh
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