What do people make of this?

[DonkeyApple]

https://www.telegraph.co.uk/money/consumer-affairs...

The article struck me as an advertorial for a picking service but I might be doing the chap a huge injustice.

[Derek Chevalier]

DonkeyApple said:

https://www.telegraph.co.uk/money/consumer-affairs...

The article struck me as an advertorial for a picking service but I might be doing the chap a huge injustice.

Can't read the whole article, but I'm assuming it's about someone that has generated some great returns and puts it down to skill?

[ATM]

Derek Chevalier said:

DonkeyApple said:

https://www.telegraph.co.uk/money/consumer-affairs...

The article struck me as an advertorial for a picking service but I might be doing the chap a huge injustice.

Can't read the whole article, but I'm assuming it's about someone that has generated some great returns and puts it down to skill?

https://www.pressreader.com/uk/the-sunday-telegraph-money-business/20191027/281779925914235

[Captain Raymond Holt]

Again, can’t see the full article, too tight.

I’m expecting him to be touting something... is forex involved?

If the article isn’t for gain it must be vanity.
Eta: thanks Derek.
There’s no real content there, vanity maybe?

Edited by Captain Raymond Holt on Tuesday 19th November 17:51

[Countdown]

It's a bit vague on details. For example

- he started of with £90k. Did he actually put any more in, or is it just the £90k that he's turned into £1m?
- how much has the FTSE grown over the same period?
- were all his "picks" winners, or did he have some losers?

[Derek Chevalier]

ATM said:

Derek Chevalier said:

DonkeyApple said:

https://www.telegraph.co.uk/money/consumer-affairs...

The article struck me as an advertorial for a picking service but I might be doing the chap a huge injustice.

Can't read the whole article, but I'm assuming it's about someone that has generated some great returns and puts it down to skill?

https://www.pressreader.com/uk/the-sunday-telegraph-money-business/20191027/281779925914235

Thanks. He puts 25% to 50% of his pension pot into one company!

The rest of the article is noise. Any edge from analysing company accounts probably vanished in the 80/90s.

In the real world, even Buffett is struggling (whom he mentions)

https://www.institutionalinvestor.com/article/b1j2...

Someone that can genuinely pick winning stocks wouldn't be writing articles for the Telegraph.

[GliderRider]

Having read the article, I would summarise it thus:

1. Understand your subject. James Hickman was already an accountant, so that must have given him a head start interpreting company financial reports etc. Us normal mortals would need to read up so we also understand what we are reading.
2. Learn from others. He researched the stockpicking techniques of successful investors.
3. Filter out the 'rubbish'. Look for a return on sales greater than 10% and a return on capital employed greater than 20%.
4. Read and understand the company accounts.
5. If all looks ok, wait for a good opportunity and 'go in hard'.
6. Concentrate on three or four companies a year.
7. Avoid 'pipedream' businesses. Go for 'boring' long established companies with a good track record.
8. Avoid investment trusts if you want big returns.
9. Pick companies with tangible results.
10. Don't put too much faith in company announcements. Let their accounts guide your decision making.
11. Only invest in what you understand.

He stresses throughout that you need to spend lots of time on research. As, Arnold Palmer once said, 'The more I practice, the luckier I get.'

Edited by GliderRider on Tuesday 19th November 19:34

[ATM]

I didnt see a time frame but to go from 90k to 1.1m is like 12x or 1200% profit. So if this was over say 16 years then it's the equivalent of almost doubling money every 4 years.

[Derek Chevalier]

GliderRider said:

Having read the article, I would summarise it thus:

1. Understand your subject. James Hickman was already an accountant, so that must have given him a head start interpeting company financial reports etc. Us normal mortals would need to read up so we also understandwhat we are reading.
2. Learn from others. He researched the stockpicking techniques of successful investors.
3. Filter out the 'rubbish'. Look for a return on sales greater than 10% and a return on capital employed greater than 20%.
4. Read and understand the company accounts.
5. If all looks ok, wait for a good opportunity and 'go in hard'.
6. Concentrate on three or four companies a year.
7. Avoid 'pipedream' businesses. Go for 'boring' long established companies with a good track record.
8. Avoid investment trusts if you want big returns.
9. Pick companies with tangible results.
10. Don't put too much faith in company announcements. Let their accounts guide your decision making.
11. Only invest in what you understand.

He stresses throughout that you need to spend lots of time on research. As, Arnold Palmer once said, 'The more I practice, the luckier I get.'

While the above sounds reasonable, hundreds of other people do the same thing. There's no edge.

[DonkeyApple]

Derek Chevalier said:

GliderRider said:

Having read the article, I would summarise it thus:

1. Understand your subject. James Hickman was already an accountant, so that must have given him a head start interpeting company financial reports etc. Us normal mortals would need to read up so we also understandwhat we are reading.
2. Learn from others. He researched the stockpicking techniques of successful investors.
3. Filter out the 'rubbish'. Look for a return on sales greater than 10% and a return on capital employed greater than 20%.
4. Read and understand the company accounts.
5. If all looks ok, wait for a good opportunity and 'go in hard'.
6. Concentrate on three or four companies a year.
7. Avoid 'pipedream' businesses. Go for 'boring' long established companies with a good track record.
8. Avoid investment trusts if you want big returns.
9. Pick companies with tangible results.
10. Don't put too much faith in company announcements. Let their accounts guide your decision making.
11. Only invest in what you understand.

He stresses throughout that you need to spend lots of time on research. As, Arnold Palmer once said, 'The more I practice, the luckier I get.'

While the above sounds reasonable, hundreds of other people do the same thing. There's no edge.

Hundreds do. But thousands buy minibonds holding invisible bamboo farms, cases of Fune Weins and avoid IHT buy swapping their taxable wealth for AIM certificates which their children can use as toilet paper.

As a list for self investors I think it’s a cracking set of initial guidelines which asnis always the case requires far too much effort to read let alone follow when a bloke you’ve never heard of will simply cold call you and sell you a product that does all the work and will make you fantastically wealthy.

[GliderRider]

Derek Chevalier said:

While the above sounds reasonable, hundreds of other people do the same thing. There's no edge.

Derek, he doesn't claim to have an edge. As you say, hundreds of people have similar sized funds from doing their own research. As Andrew Craig in 'How to own the World' points out, there are smaller companies with which the institutional investors don't bother, simply because there are not enough shares changing hands to be worth their while. This is one area in which the smaller investor can have an advantage. I would suspect that a private limited company with a good track record, that goes public, might also be the sort of target to watch.

From my 20 seconds of Googling, it appears that James Hickman is the CEO of Home Retail Ltd, which trades as Plumbworld. He sold his original company to Grafton PLC, then bought it back in a management buyout. I would suspect that puts him in a good position to know which of his customers and suppliers could be worth investing in (Edit: For clarification, I'm not suggesting he's doing anything which could be construed as illegal insider trading).

All the questions that Countdown asked are valid, and I would be very interested in the answers too. May be if we asked James Hickman he would tell us?

Edited by GliderRider on Wednesday 20th November 11:25

Edited by GliderRider on Wednesday 20th November 11:31

[Blatter]

ATM said:

I didnt see a time frame but to go from 90k to 1.1m is like 12x or 1200% profit. So if this was over say 16 years then it's the equivalent of almost doubling money every 4 years.

Hargreaves Lansdown's shares did that! (The original issue price was 160p/share)

[Derek Chevalier]

DonkeyApple said:

Derek Chevalier said:

GliderRider said:

Having read the article, I would summarise it thus:

1. Understand your subject. James Hickman was already an accountant, so that must have given him a head start interpeting company financial reports etc. Us normal mortals would need to read up so we also understandwhat we are reading.
2. Learn from others. He researched the stockpicking techniques of successful investors.
3. Filter out the 'rubbish'. Look for a return on sales greater than 10% and a return on capital employed greater than 20%.
4. Read and understand the company accounts.
5. If all looks ok, wait for a good opportunity and 'go in hard'.
6. Concentrate on three or four companies a year.
7. Avoid 'pipedream' businesses. Go for 'boring' long established companies with a good track record.
8. Avoid investment trusts if you want big returns.
9. Pick companies with tangible results.
10. Don't put too much faith in company announcements. Let their accounts guide your decision making.
11. Only invest in what you understand.

He stresses throughout that you need to spend lots of time on research. As, Arnold Palmer once said, 'The more I practice, the luckier I get.'

While the above sounds reasonable, hundreds of other people do the same thing. There's no edge.

Hundreds do. But thousands buy minibonds holding invisible bamboo farms, cases of Fune Weins and avoid IHT buy swapping their taxable wealth for AIM certificates which their children can use as toilet paper.

As a list for self investors I think it’s a cracking set of initial guidelines which asnis always the case requires far too much effort to read let alone follow when a bloke you’ve never heard of will simply cold call you and sell you a product that does all the work and will make you fantastically wealthy.

What on earth is Fune Weins?

My personal belief is that for any strategy to have an edge it needs to be

1. known to a few people
2.have high barriers to entry (be that market knowledge, mathematical ability, huge amounts of data, or first to react etc).

I'm not sure the above has either. You are being compensated for taking additional risk, IMO.

Assuming we are talking about companies that are illiquid and off the radar of the hedge fund boys, some observations:

1. Scalability. It may be the case that the first investor to read the latest company announcements and place a market order may have an edge. But given the relative illiquidity, the market makers can easily move/widen the bid/ask so that the second quickest investor may not have an attractive an offer. They may even pull out of the market in volatile times.

I remember the penny share tips suffering from these issues - mentioned here.

https://www.investorschronicle.co.uk/shares/2018/1...

2. Fraud. With the lack of professional analyst coverage, I'm assuming the chances of fraud are higher.

3. Your time. What value do you place on this? If it's a hobby, fine, but if using this approach vs something low maintenance like a diversified global portfolio, you might want to factor in your costs.

Edited by Derek Chevalier on Saturday 30th November 16:41

[TCX]

Throw a dart....when a company's waiting for news,lol and the signing ceremony delayed,wrong flowers delivered?or epo that was due weeks ago .........still waiting but 'someone' posts photos of few random cable drums,citing electrification scheme for mine underway?
But then on aim since end Sept been numerous chances to 2/4/or even 9x your initial sum