26 mins ago


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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

The threat of a "big beast" entering the market is always presented as a major risk for internet portals but as the experience of Rightmove (LON:RMV) shows (it was always supposed to be just about to be squished by Google Property) or Auto Trader (LON:AUTO) (eBay Motors) the network effect makes the business model highly resilient.Philip,Yes - this is true. I think there are two…

Just Eat (LON:JE.) is one of those interesting cases where the incremental cost of growth is very, very low. It doesn't need to invest significantly in fixed assets or working capital. Indeed, most of its growth investment is expensed in the P&L whereas at a more asset intensive business that investment would be capital expenditure that wouldn't be fully deducted. The consequence of this is…

Just seen the latest update from NCC. Not good at all. It's notable that the update is provided by "the Board", with no mention of, or comment by, the Chief Executive (Rob Cotton). I would suggest that the Board don't trust him any more and he is surely unlikely to last much longer. If that is so, who knows what they'll uncover once he's gone.....

Yes - especially so where the cost of the individual parents are low in the context of their potential value. I do expect the unitary patent to gain traction over time, but I don't think there will be sudden mass take up of it.

Hello Steve, yes, this is an issue RWS have been drawing attention to for a while. You can find discussion of it in their most recent annual report. They anticipate "minimal revenue loss in FY17" and say something a bit more vague relating to 2018 and beyond. To be fair to them, I dom't think this is evasiveness - I think they genuinely don't know…

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