John's Story

Before Stockopedia, how did you go about finding investments?

"My investment technique has evolved over the years but the big influences were, Jim Slater - the zulu principle and Warren Buffett - Berkshire Hathaway. Both these recommended detailed study of the underlying company - which advice i took and tried my best with.

I used some data providers to identify potential companies and then researched closely, often visiting the companies and discussing with the finance director/CEO. Having carried out the research I made meaningful investments — which in turn led to a modest number, say 15. To some extent the process was successful but there were some horror stories.

The errors of investment were compounded by my “great/detailed” knowledge of the company which led me to believe what I had been told and that “the market was wrong but would correct in time”. The second problem was that the initial research work could be “blown up” by discovering that, on investigation, the figures I were getting were incorrect. Sometimes a lot of time and effort was wasted (and resented).

As a one man band I could not “cover” the market and research could be interrupted by client demands (I’m a chartered accountant), and so my investing would have to fit around other activities."

In what way has Stockopedia changed your approach to investing?

"I ditched the policy of 'investing in a few heavily' for 'a wider selection of good quality companies' - which was made possible by the stock ranking and industry classification. So I know I could diversify across the whole market by picking the top 2 or 3 in each sector by rank.

My investing is now much more structured and the results more measurable.

I also stopped relying on research forecasts, I had realised they were pretty unreliable and it was difficult to tell which were going to be inaccurate. Given that position it was best to avoid all the forward stuff and start to rely upon proven, reported results. Generally this has worked well, with only a few exceptions.

My investing is now much more structured and the results more measurable. I use Stockopedia to filter down the investments which saves a lot of time."

John now feels less worried and better able to structure his folio.

Has this impacted your investment results and/or quality of life?

"The results are so much better. We no longer look for shooting stars but steady solid performers. The level of worry is reduced and I feel better able to structure my portfolio without needing to thrash around for something to buy.

All being well I anticipate an excellent result by the end of the year achieving over 15% return on my investments. Of course I still have pre stockopedia investments but as those unwind they will be replaced by Stockopedia led selections, according to the formula that I think appropriate at that time."

What's your advice for investors that are just starting out?

"Restrict your investments to those with an StockRank of 85+, do not put more that 5% of your funds in any one stock and spread your investments across the sectors equally. After a few years you may want to do different things but do so with the background of your success using the top three rules.

Some of the other rules that I apply are to, avoid companies with a large bid/offer spread and a low capitalisation, avoid companies which are dominated by the owners/managers, avoid chinese, indian companies, avoid blue sky and avoid over dealing."

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