Over twenty-plus years of professional and personal investing, I've tried it all – fundamental analysis, technical analysis, buying cheap stocks (low Price-to-Book, low Price-to-Earnings, high dividend yield), Buffettian value (discounted cash flows), GARP (Growth At a Reasonable Price), QGARP (Quality Growth At a Reasonable Price), systematic (rules-based) investing...
I've read hundreds of books on investing – covering styles, rules, systems, mindset, charting, coding. What I've learnt is that there are many different ways to make money that work, but you have to find the way that's suitable for your circumstances, personality, interests and time.
At the end of the day, all investors want the best risk-adjusted compounding of their portfolio they can achieve. In simpler terms, you want to grow your money by x times over y number of years without losing more than z% along the way.
It took me a long time to figure out a system that worked for me. Time that could have been spent compounding.
Through painful experience, I've also learnt that diversification of securities, asset classes, markets, styles and strategies is the ideal way to get an optimal risk-adjusted return. The smoother the ride, the longer you'll last in Mr. Market's wild rodeo. Investing is a game of survival. (If you're a an investing genius with a steely temperament like Warren Buffett or Charlie Munger, you can ignore this last paragraph).
Many (including Buffett) think most people should just own the market because you can't beat it. Buy and hold an index fund and get on with your life. It's not bad advice, because truth is, most people can't beat the index. Not even the professionals.
But the more ambitious (greedier) ones amongst us still want to try. I believe the market can be beat. And in a much less painful way than buy and hold. Higher returns, with lower risk.
Sounds crazy? A violation of the Efficient Market Hypothesis? This newsletter is for the crazy ones.
My goal is to share what I've learnt along the way. Every week you'll get clear and actionable ideas to help you compound your portfolio better. I'll also put together longer guides such as A Simple Strategy to Beat the Market (15% annual returns since 2003 with much lower risk than the S&P 500) and send it to my subscribers for free (if you haven't yet, you can sign up in the form below).
We'll not be wedded to any ideology, so keep an open mind. That's especially important in this age of technological disruptions and black swans.
Welcome to The Open-Minded Investor.