SOURCES OF THE BEST INVESTMENT IDEAS

11th Aug '17 by WarrantStar

26 comments 10438 reads

Where do your best investment ideas come from?
Small Cap Value Reports?
Tip Sheets. If so which?
Your own screens?
Elsewhere?

I always put any purchase idea through my thorough process before buying it.
I tend to use tip sheets a lot, although I reject the great majority of their tips. I'm pretty handy with using the excellent screens on here. My portfolio significantly beats the benchmark that I have chosen. But I think that maybe I could further improve my returns by cutting out some of the tip sheets & relying more on my screens.
My favourite tip sheet is Small Company Share Watch due to the quality of their in depth research.
What is the experience of other subscribers? Which is your best tip sheet? Do you do better by following your own screens? Do you beat your chosen benchmark?

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ambrosia

13th Aug '17

"Trying to wean myself away from ADV' as its full of slander and generally quite a hateful place."

I hate stuff like that, someone posts something then the next person trolls on about a spelling mistake or something which isnt even anything to do with the topic. So unnecessary

I cant remember where I read it, but i was reading an insight into forums, where often one person takes a lead and everyone follows, then if someone comes along and says something contradictory he gets bullied and everyone ends up following the one person right or wrong. The moral was dont get sucked in, just because someone on a forum sounds knowledgeable and everyone is agreeing with them doesnt mean he's right

PhilHofGrowYourDough

I tend to stick to my screens. I extract data out of the stocko screens into a Google Portfolio where I can assess the best prospects, calculate risk reward ratios and identify buy prices. I'll then wait for the price to be triggered and if the prospect still satisfies my original screening I'll buy.

I read the threads here but there is little if no discussion around the stocks I tend to hold, which i think is a good thing. I read the SCVR but mostly what I take from it is strategies to include into screen filters, e.g. balance sheet strength tests

I don't read any other sources of information.

Annualised return of 28% over the last 3 years +

Best of luck
Phil

Martin5760

The shares mentioned in SCSW. By the time the newsletter has been received and read by members have the share prices already increased a fair amount ? Robbie Burns - the naked trader makes some very good calls on his free blog but they invariably shoot up immediately and a suitable entry price has already vanished before one can act.

TheFurryOne

Sorry Phil, hit the down thumb by accident. Apologies.

Effortless Cool

I use IC and SCVR to generate ideas. I follow up on the ones that grab me using Stockopedia and ADVFN (their much derided bulletin boards do often contain useful contributions) and, most importantly, the company's RNSs and accounts.

Most of my investments are small caps, where I believe i can gain an advantage through superior research. A key part of this is building full models of the accounts (income statement, balance sheet and cash flows) and deriving a valuation through the projections therein.

andrewdb

On have the share prices already increased a fair amount ?
This is true for the smaller caps they tip for the first time (Altitude (LON:ALT) springs to mind).

In many cases, the sp falls back after a few weeks.

Just my approach:

I read about companies / sectors in IC/ SCVR/ SCSW/Economist etc and then look at the StockRank report and then read about the Co online

And then filter (No foreign companies listed in UK. No loss making companies No dead tree press No car related cos ) and think.

if I want to buy it will be bought when the buy decision is made - I dont wait for a price threshold to buy.
that is on the theory that if it really is a good company, the sp will trend up
- and a stoploss of ~20% on purchase that lasts a month

... and then still often get it wrong.

doug2500

I also like Richard Beddard's approach on Interactive Investor

http://www.iii.co.uk/articles/436197/intelligent-fanatics-project-sean-iddings-and-ian-cassel-microcapclub-publishing-201

WarrantStar

14th Aug '17

Thanks for your replies everybody. I will continue to put all potential purchases through my system. I will decrease the number of shares that I examine as a result of tips, and increase the number the shares that I examine as a result of my screens. I think this will be more productive because I can align the screens to what my process is looking for.

Richard Goodwin

Veg Patch's blog is not often updated but the quality is excellent bloodinthestreets.weekly.com as is http://walbrockresearch.com

Richard
Thanks for both the ideas. I have subscribed to Walbrock research site. But I can't find bloodinthestreets

17th Aug '17

Here is a copy/paste from the browser. I suspect that given the timing of the most recent update (ie not v recent) Veg patch now uses Stockopedia for the same purpose instead however the original analysis is still worth reading

http://bloodinthestreets.weebly.com/

philthebank

If I am looking at ETF's then the wealth 150 is a good place to start my research over at HL. I've had some very good buys from them and averaging about 30% a year spread over a few sectors. I evaluate once a year and ditch the bottom two-three performers. Thats my approach for my pension.

I'm new here but I like the screeners they have and its all about rankings (has to be 90+). Then i hate to say it but its a gut feel after reading about the company news and looking at directors dealings to give me a feel. So using this for my ISA this year and about 10% of my pension.

VegPatch

Kind words Richard, thanks for the thumbs up. I tend to write on things I have followed for a long while and know. It helps if I have met the management. I try and write up things i have bought, but occasionally I don't eg met On The Beach management in December, I was really impressed with the CEO. I modelled the company and bought shares at 270p.

For me i like SCVR, Leon Boros, wexboy, Richard Beddard, naked trader, Edward Roskill, John kingdom. All of these are generally v well written / thought out

Above all keep an open mind and your eyes and ears open. There are so many sources of alpha e.g. I wrote up the Bioventix note after reading about it on here in an interview with Keith ashwell lord, then met Leon Boros on the way. Don't follow others blindly. Definitely DYOR. Another thought is that If you are in London and can get to AGMs they are useful to meet fellow investors and management teams.

Best of luck

ls2g08

18th Aug '17

I did an interesting exercise a while back taking all buys and sells and trying to remember what was the key data source behind selling and what the result was. It was very enlightening and I dropped a couple of sources.

Ramridge

Phil Oakley writes a great column in Sharescope. His analysis of shares under review is very thorough and often original in his approach.

An addition to vegpatch's list, I would suggest.

Johnny2509

19th Aug '17

I agree, Phil Oakley's company/share reviews are very good. I recommend his recent book too, which is full of the type of analysis skills which can only help in share selection.

No.71 of his article library suggests some additional books to read (I think these articles are accessible to non SharePad subscribers).

21st Aug '17

Thank you everybody for your great comments!
Would anyone else like to share their ideas on this?

Logic

22nd Aug '17

Fundamentals screen, and then removing companies which do not have a sound business idea that I can understand. I tend to agree with Dreman that people often overpay for exciting stocks with great stories, which often leave "boring" companies at great value.

I would strongly advice staying away from boards, the most discussed shares tend to perform quite poorly. There are a lot of people who are ill informed and are sure that certain shares are just about to boom or about to default, and that anyone who disagrees is out to manipulate the market. The only time it is worth taking a peep, is if there is an unexpected change in share price and you cannot see a reason for it. There may be something that you have missed, that someone has plastered all over the boards.

I also avoid broker recommendations and research, as I do not think they're very accurate. I used to think that they were great, but I find that there are far more buy than sell recommendations, which should be a warning sign. In addition, there are enough reports of brokers altering their research to appease companies, for me to have faith in them.

stock_Hunter

23rd Aug '17

Anybody know anywebsites providing UK stocks EPS rating? like MarketSmith?

Gordon Tough

14th Nov '19

Just being totally ripped off by Kalkine.4from 5 losers and had my deposit back -lost hundreds.After a call from their top man I was talked into a 3 month trial for £300.This has been another disaster, phonecalls now ignored, last tip was dated 6/Nov arrived 10.10am on 8th Nov. by this time the stock had risen 10/15%which is the target gain. so now it seems they are sending me u/s info to make me lose more money because I had the nerve to complain about losses.TThis is a regulated company-what a joke.

SOURCES OF THE BEST INVESTMENT IDEAS

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WarrantStar

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