Came across this great article. thanks Michael. I am wondering could you share more colors regards to the pattern recognition you are referring to ? -> Over time you’ll learn the pattern recognition needed to interpret quarterly results.
I think George Soros mentioned in an interview that he used a "gut feeling" to make investment decisions. And sometimes, I personally cannot fully explain why I feel resistant to investing in particular stocks. It probably has to do with experience, having seen a similar situation before and knowing what that led to.
When it comes to judging quarterly results, I tend to look at growth in balance sheet items, growth across the income statement, cash flow conversion, tax paid but also the outlook statement since stocks are valued based on their future cash flows, not past.
I am starting to advance in age (42 years). I ask the question of starting to introduce bonds and fixed income in my allocation. Have you set up this type of allowance, or do you have any supports to advise? Thank you, Cédric (France)
Hi Cedric, I am not a financial advisor so I wouldn't be able to recommend you exactly what to invest in. But if I were you at 42 years old, I would still weigh my portfolio heavily towards freehold property / stocks. I don't think you get paid for owning long-duration (1yr+) bonds. With the broad money supply increasing 20%+ in the United States over the past year, it seems foolish to own 10-year government bonds at sub-2% yields. So I would stick to a large allocation of property / stocks and make sure that your (small) fixed income allocation is short-term in nature - for example cash / short-term government bonds. Every time there is a crash in the stock market such as in March 2020, one should get out of cash / bonds and buy more stocks.
Came across this great article. thanks Michael. I am wondering could you share more colors regards to the pattern recognition you are referring to ? -> Over time you’ll learn the pattern recognition needed to interpret quarterly results.
Hi Paul! Thanks for those kind words.
I think George Soros mentioned in an interview that he used a "gut feeling" to make investment decisions. And sometimes, I personally cannot fully explain why I feel resistant to investing in particular stocks. It probably has to do with experience, having seen a similar situation before and knowing what that led to.
When it comes to judging quarterly results, I tend to look at growth in balance sheet items, growth across the income statement, cash flow conversion, tax paid but also the outlook statement since stocks are valued based on their future cash flows, not past.
Great write-up, sharing this with friends who want to get into investing!
I am starting to advance in age (42 years). I ask the question of starting to introduce bonds and fixed income in my allocation. Have you set up this type of allowance, or do you have any supports to advise? Thank you, Cédric (France)
Hi Cedric, I am not a financial advisor so I wouldn't be able to recommend you exactly what to invest in. But if I were you at 42 years old, I would still weigh my portfolio heavily towards freehold property / stocks. I don't think you get paid for owning long-duration (1yr+) bonds. With the broad money supply increasing 20%+ in the United States over the past year, it seems foolish to own 10-year government bonds at sub-2% yields. So I would stick to a large allocation of property / stocks and make sure that your (small) fixed income allocation is short-term in nature - for example cash / short-term government bonds. Every time there is a crash in the stock market such as in March 2020, one should get out of cash / bonds and buy more stocks.
This is an awesome post, wish I had this when I started investing!
Thanks! Share with anyone you think might benefit from it
Very well written. You are doing a great service for new and young investors
Thanks Tejinder!