11 mins ago


This space is reserved for LongbeardRanger to introduce himself.

Investment Strategy
I trade... monthly
I tend to buy... after much research
I hold for... years
I invest with... <£500k
Diversification is ... essential to reduce risk
I focus on high quality companies - that is, companies with high returns on capital, in cash, where I believe there are reasons that those returns can be sustained. My research is a mix of quantitative and qualitative, as I believe a pure focus on financial analysis or quantitative factors can miss certain unusual investment opportunities - for example, investments in industries or businesses where traditional financial metrics are misleading. I am a strong believer in diversification. I currently hold just under 30 shares, and am gradually increasing that number. Partly, this is because I hold a number of small/mid cap shares, and in my view more diversification is needed as you go down the market cap spectrum (as you're holding less internally diversified businesses), so my portfolio needs to reflect that. Partly, it's that I'm sceptical about the confidence level one can have in any individual business. And partly it's behavioural - I react better to bad news/price drops when they're a relatively small part of my portfolio. I don't think I have the temperament to invest in a highly concentrated portfolio as the inevitable drops would cause me to lose my nerve.

LongbeardRanger's Latest Blogs

A few weeks ago I participated in an interesting discussion here about the pitfalls of accruals, and how companies with accruals-based earnings are net underperformers, over time. This creates a big problem if you want to invest in financial firms, who are the "poster boys" of accruals-based accounting.  In this context I thought it would be interesting to take a look at the one financial…

LongbeardRanger's Latest Comments

Hello VegPatch, Good article. I think I've mentioned before that Young & Co's Brewery (LON:YNGN) is a core holding of mine. Certainly not a racy business but one that is very well positioned. Its ownership of sites in great locations is a competitive strength that would be very hard for rivals to match or recreate. Not too long ago I went onto Companies House and…

Also - I'm sceptical of the prominence they give to Trustpilot. For that kind of valuation I would like to see hard numbers (cash), not their internet review scores. I would give this much more credence if it was a recognised measure like the net promoter score.

I think Purplebricks is a very interesting company. I think it's going to have a potentially big effect on competition in estate agency and that effect will basically be to drive down fees. So that will be good for consumers, but overall bad for agents. But I think there are also some clear limits to the scalability of Purplebricks' business. Clearly, their advertising spend has…

Tabhair, Thanks - that is really, really interesting data! I hold a few companies in the top 25 by value but I am very pleased to see that none of them appear on the top 25 companies by monthly trading volume or monthly traded value. I much prefer investing in quiet, under-the-radar stocks. It makes me nervous when I own things that are highly popular…

I can understand this viewpoint, but here's the thing. There's no obligation to invest in the likes of Barclays (LON:BARC), Royal Bank of Scotland (LON:RBS) or Lloyds Banking (LON:LLOY) - or even Bank of America, Wells Fargo, ANZ, Westpac or any other very large bank. But that doesn't mean you have to rule out investments in the banking industry. If you look in the U.S.…

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