Today’s post is the second of two installments on ’10 Things I Learned From The UK Investor Show 2014′.
You can access part one here.
Cheap stocks beat expensive stocks – Ed Croft, Stockpedia #ukinvestorshow
— David Thomas (@djthomas) April 5, 2014
They sure do.
Ed Croft and Tom Winnifrith made a great case for private investors to focus on cheapness and expertly defined what cheapness is and how to find it.
Not bad especially as it was the very first session of the day.
Here are the last 5 things I learned from the UK Investor Show 2014:
6. Short-Term Traders Lose Money Because They Don’t Cut Their Losers And Don’t Allow Winners To Run
The Traders Session which included Clem Chambers, Thierry Lauguie, Malcom Stacey and Robert Tratt was full of wit and wisdom.
In regards to the wisdom and apart from not cutting losses and not letting winners run, the panel identified 3 key reasons why traders lose money in the markets:
People fund spread betting accounts with £2,000 and then buy the FTSE 100 at £10 a point
A lot of people who start spread betting think it’s a quick way to wealth
People also trade without a plan
Who have been warned!
7. Successful Short-Term Traders Design A System By Themselves For Themselves
Getting more specific, here’s a quote from Robert Tratt from the traders session which I thought was very interesting:
Some people go on a weekend course and think they can make a living from trading
- Robert Tratt, UK Investor Show 2014
My view is that trading courses aren’t all evil per se it’s just that private investors need to design a system around their own prejudices and time constraints.
Here’s Thierry Lauguie’s take on this:
Even with a perfect system people will still not be able to make money. Create your own system
- Thierry Lauguie, UK Investor Show 2014
If you need motivation to be bothered about creating a value investing system that works for you then click here.
8. Exposing The Truth About A Listed Company Can Result In A Lawyers Letter
The undisputed champion of CEO wrath is Tom Winnifrith.
But let’s be clear.
It’s THE TRUTH AND IT’S EXPOSURE that seems to ignite CEOs’ passion for legal bullying.
Case in point.
The Federal Trade Commission fines Zango (an adware distributor) $3 million in 2006 and as a result is forced to shut down due to its unsavoury practises as admitted by it’s own former chief technology officer and co-founder.
Ben Edelman has shown that Blinkx (LSE: BLNX) who bought the assets of Zango have been using the same software and unsavoury practices as Zango did when it was fined and regulators are seemingly unmoved.
Tom gets a lawyers letter stating that he will be in an ‘unfavourable position’ if panalists/guest speakers are not ‘fair and balanced’ in their views or they ‘mislead’ investors about Blinkx.
Lawyers letters or not shareholders and the public have a right to be made aware of these issues and it is independent financial bloggers/investors/journalists/academics that are at the forefront of this crusade against cavalier boards and CEO’s who act as though they’re in the wild west.
Get a better idea of what Blinkx is up to and take a look at Ben Edelman’s video from The UK Investor Show 2014.
9. Terry Smith From Fundsmith Has An Extremely Low Portfolio Turnover
“One stock every 18 months.”
This is the figure Terry Smith quoted at The UK Investor Show 2014 to explain what his funds’ portfolio turnover rate is.
One every 18 months.
Think about that. Even then its because Terry is usually forced to sell due to a take over/going private.
Terry also stated that this aspect of portfolio management i.e. doing nothing is the one thing that most investors find most difficult as if they have to always be doing something as a way of justifying their time.
Terry Smith at the UK Investor Show 2014 pic.twitter.com/7X1rYzuzz9
— David Thomas (@djthomas) April 10, 2014
Terry Smith’s investment strategy:
Only invest in good companies
Don’t overpay
Do nothing
Nice and simple.
10. Attending Investor Shows And Conferences Is A Great Way To Network And Make New Friends
As well as all the awesome stock market advice and opinions you are able to get to help you become a more informed investor, the very nature of investor shows and conferences makes them a brilliant place for networking and making new friends.
This in turn means that you are able to exchange opinions and ideas with people who actually care about financial markets and are therefore more likely to know what they are talking about.
The very act of exchanging ideas and opinions (not just about financial markets) makes you a better investor because many of the topics discussed would normally be off the radar.
Allowing your owns views to be challenged in such an environment is a great refresher and energiser.
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A special shout out to Tom Winnifrith for organizing and hosting yet another brilliant investor show and I hope to see you all there next year.
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10 Things I Learned From The UK Investor Show 2014 – Part 1
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