Weekend Reading 12th December

This week saw the biggest five-day slide in the FTSE 100 since mid-2011. Most of the blame lies with a tumbling oil price, weak economic data from China and political uncertainty in Greece. For investors, this sort of stomach-churning volatility is utterly miserable. But there have been some winners. John Authers in the FT wrote an excellent piece this week about how low volatility stocks have performed admirably in the current conditions.

It's perhaps a little early to figure out precisely what worked in the stock market this year. But the early signs suggest that a mix of Quality & Value was one of the best ways to pick winners in an otherwise flat market - we took a look at the top 10 Quality stocks for 2015 here. On the subject of quality, we liked this blog from Todd Wenning… when is a faux leather sofa really a good deal?!

Strategies Editor, Ben Hobson also penned this article at This is Money, looking at a current crop of top 10 growth shares - and the tricks famous investors use to spot stocks that can keep on climbing.

We've been syndicating a column to Interactive Investor on some of the topics we've covered at Stockopedia many times - here's one from this week about using the Value Rank to uncover deep value shares on AIM. It got a nice tweet from “What Works on Wall St" author James O'Shaughnessy which rather tickled the team here.

Do remember that we will be conducting a free webinar on Wednesday 17 December at 12.30pm, entitled Value Investing - from Graham to Greenblatt & beyond. You can register for it here.

On the subject of O'Shaughnessys, Patrick O'Shaughnessy, Quant, Philosopher and next in line, writes a terrific blog at Millennial Invest - we are reading his book Millennial Money which has some great chapters on systematic investing. We fully endorse his focus on finding high quality, good value, strong momentum shares… of course ! Read his great blog this week on Value and Momentum here.

Indeed, for those that scoff at momentum investing, this is an interesting interlude from Man Group about all the behavioural reasons that make it persist.

With the number of shopping days to Christmas slipping by at an alarming rate, it was timely that our small-cap specialist Paul Scott cast his eye over some of the market's big name glamour e-tailers like ASOS, AO World and Ocado. Looking for a seasonal bargain? He reckons you won't find one among this bunch.

Alex Naamani has been analysing stock splits data and all manner of complicated stuff this week and wrote about some of his findings here. And Rupert Hargreaves continued with his Warren Buffett themed series with a look at whether anyone can really hope to emulate the great man.

At the risk of name checking Richard Beddard every week (no pressure, Richard), his article on investing in illiquid shares is worth a read. While wide spreads can be off-putting, it's perhaps the (often small) free float of some companies that investors should be more wary of. Also check out Simon Lack's views on the ways investors can measure illiquidity, and perhaps use illiquidity as a factor to beat the market.

We're big fans of introspection here at Stockopedia. There's something mildly cathartic about continually questioning yourself - especially when you're working at a growing internet company (it's extremely cathartic when Ed's doing the questioning!). So no surprise that we're also big fans of behavioral finance and all the reasons why investors sometimes let themselves down. There's a useful reminder of those reasons here.

Business Week offered up the ultimate click-bait feature with its 85 Most Disruptive Ideas in Our History. Easily most meaningful of these revelations to the Stockopedia team is #34 Parkinson's Law. Simply put: “A task will swell in (perceived) importance and complexity in relation to the time allotted for its completion. The solution? Set urgent deadlines, program your Pomodoro stopwatches, and stick to the program. No dillydallying, and no toiling over inconsequential details. (Like explaining the Pomodoro technique; look it up on Wikipedia.)" Yep, sounds familiar. There may be some overlap, but here's an infinitely more scientific list of some of the the world's boldest ideas.

Finally, the best headline was in The Economist, which set out to explain How “Gangnam Style" broke YouTube's counter. Turns out the 'boffins' at YouTube never figured that anyone - far be it a South Korean pop sensation - would ever get more than 2,147,483,647 views. The good news is that they've fixed it. Gangnam Style can now be watched over nine quintillion times before there is any risk of YouTube losing count. What's the link to that video again…?

Safe investing and gave a great weekend!

Ben Hobson, Strategies Editor - Stockopedia