Get your investing questions answered by Paul and Graham...

Thursday, Oct 19 2017 by
13

Paul and Graham - the writers of the superb Small Cap Value Report - are joining us in Oxford next week. While they’re here we figured it would be a great chance to ask them the investing questions that their readers have never quite had a chance to ask themselves.

So if there’s something you’d like to ask - whether it's something general or something you never quite understood or can’t work out... this is your chance.

Feel free to post your questions below or PM them to me through the site.

One way or another we’ll wrap them all up into an interview and get it published here.

Thanks!

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Disclaimer:  

As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>


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22 Comments on this Article show/hide all

Howard Marx 19th Oct '17 3 of 22
1

According to Michael Mauboussin (CSFB), sales growth is the biggest value driver


Would Graham/Paul differ as to what the key creator of value for shareholders is?

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Warranstar 19th Oct '17 4 of 22

My question are:
1) Where do they get their best ideas on which companies to investigate for possible share purchases?
Eg Results statements, trading updates, their own screens or whatever
2) Why does their preferred method work better for them than possible alternative methods of generating ideas?

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JohnEustace 19th Oct '17 5 of 22
3

I am considering subscribing to a Level 2 data feed. Which service(s) would they recommend?

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tic_tac_toe 20th Oct '17 6 of 22
1

Paul often refers to 'balance sheet health' is there a handful of key items that can give a rough and dirty take on this, that he and/or Graham look for: such as NTAV, borrowings, current ratio. What would they say are the key items to sift the bad from the good, in respect of balance sheet analysis.

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Fegger 20th Oct '17 7 of 22
4

I would love a video of each of them going through a couple of varying actual balance sheets to show how they approach them. Paul has done similar in the past.

Also if they have a SIPP do they approach investing in a SIPP (or pension plan if Graham is headquartered in another country) differently to other investments? Could they explain what the differences are and how they structure their investments in it accordingly?

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paraic84 20th Oct '17 8 of 22

In reply to post #231063

I second that suggestion!

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jpatel12 20th Oct '17 9 of 22
1

My questions are:

1) Do they use screens to search for new share ideas and if so, it would be useful if they could share them or the key criteria they use?
2) How do they approach risk/reward when considering new purchases or topping up existing holdings and conversely when do they consider selling a holding, since my understanding is neither of them use limits or stop loss levels?
3) If they were to start their share investment journey for the first time now (in a bull market) with say £30k-£50k, would they run concentrated portfolios of say 6 shares or split the cash sum into a set amount e.g. no more than say 10% into any one share?
4) I think it would be great if you could do some articles on the key elements to look out for/assess when looking at P&L and BS.

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Adam Collingburn 20th Oct '17 10 of 22
1

1) What's been your biggest mistake when investing?

2) How would you go about investing a relatively small amount - Say £5k with a monthly additional £500 without getting swallowed up by commision and spread?

3) Knowing that Paul is a keen petrolhead... favourite car?

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hayashi22 20th Oct '17 11 of 22

BMW?!

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HumourMe 20th Oct '17 12 of 22
1

Why are you really there? :) Are you getting a preview of the new site (after all 2017 is over soon) and if so, after your exposure to its features, do you think it'll tweak your analysis approach? I quite understand that you might not be able to answer this one (yet).

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ls2g08 20th Oct '17 13 of 22
1

1) What skills do they think they can improve on to improve their performance?

2) which of the traditional investing biases do they think they are most susceptible to, and do they do anything to try and correct this?

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paraic84 20th Oct '17 14 of 22

Momentum / high growth shares seem to be experiencing a bit of a pullback in share price at the moment. Have they spotted whether other types of shares or strategies are doing a bit better right now? Have they shifted their personal strategies over the summer and autumn?

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snickers 20th Oct '17 15 of 22

What's happening in Oxford next week??

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clarea 20th Oct '17 16 of 22

If they had portfolio of say 400k how many positions would they hold for diversification but without holding to many where it became difficult to track well.

When looking at a stock on main stocko page what key metrics do they look at the quick wins to rule out any dogs.

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Warranstar 20th Oct '17 17 of 22

Ben, It was a great idea to have an interview with our heroes!


Their number of holdings.


Do they have any rules about this?
What are they?
Why do they have them?
Do they stick to them?

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gus 1065 21st Oct '17 18 of 22

I would be interested to hear how Graham and Paul make use of Stocko in their research (apologies for partial repetition of some of the comments above).

Do they use it to screen out/select stocks?
Do they use it first to make a short list for further due diligence or as a reference to rubber stamp/challenge their views on a stock they have identified from another source?
How much do they rely on the accuracy of the Stocko data i.e. Do they always check back to annual reports, analyst research etc., to verify data?
What do they think the main deficiencies/gaps are with Stocko as a research tool?
What other tools/softwares do they find useful?
Do they find Stocko particularly good/bad in accurately identifying stocks for certain industry groups or sectors? (I sense that Stocko is relatively poor as a filter for Resource and O&G stocks but much stronger for mainstream manufacturing and service businesses though have no evidence to back this up).
If applicable, what have been their best/worst outcomes to date from stocks picked/sold on the basis of research attributable to Stocko?

Thanks.

Gus.

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Graham Ford 21st Oct '17 19 of 22
2

How are they factoring Brexit into their investment decisions and a potential fall in the pound. e.g. Are they going to increase their holdings in stocks outside the UK and reduce their holdings in UK stocks, or avoid certain sectors, or over weight companies that they think might be beneficiaries of Brexit, or over weight UK listed companies that have a high proportion of their business conducted outside the UK etc.

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InvestedGeordie 21st Oct '17 20 of 22

1) What personal bias' do they have, and how do they keep them under control?
2) What plans do they have for an eventual bear market?

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pgs501 21st Oct '17 21 of 22
1

We often hear about cutting losers and running winners. How quickly would they typically cut a losing position if the investment case in their head is still as strong as ever but the share price is drifting further and further down? When would they decide they must have made a mistake and cut their losses? Or indeed would they average down when sure?


Edit: do you generally cut based on percentage loss or time the investment has been held?

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JohnEustace 21st Oct '17 22 of 22
1

Building on @pgs501's point above, how do they decide in general that it's time to sell a holding? That's a more difficult decision for me than the buying.

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