What Works?

When I looked at the performance of Value at the end of 2022, it was a rather depressing picture:

While it was clear that expensive stocks were not the place to be, the top decile of the Value Rank underperformed the FTSE All Share. Indeed, all of the deciles underperformed. It may seem…

In last week's article, I looked at what investors could learn from the full list of multi-baggers from Ed's recent study. The evidence was clear: if investors had to pick one factor to look to find future multi-baggers, it would be the potential for rapid sales growth. Although operational leverage also aided strong returns, very few companies multi-bagged without…

Last week, US confectionary giant Mars made a takeover bid for Hotel Chocolat which valued the AIM-traded company at £524m (or 375p a share) - a whopping 170% premium to the previous day’s closing price.

Now that looks pretty exciting for the company’s investors until you take a look at the share price chart.

While it can feel a bit depressing to focus on adverse outcomes in these markets, I believe these are where the real investing lessons can be found. If we can learn from mistakes and challenging market conditions, we become better investors, and our future expected returns are much higher. So, continuing this theme, in this week’s article, I will relive…

I remember the first stock that I recommended for purchase across all our client accounts in my private client group at Goldman Sachs. I was 22 years old and had to comply with the "process". That process meant that shares needed to have been recommended by one of our research analysts, who sat on a different floor to our investment…

The current UK markets are brutal for companies that fail to meet expectations. Even short-term issues are punished severely. While it can be challenging to predict which companies will issue a profit warning next, some companies have seen very large declines, while others have escaped with a mere flesh wound. I am interested in what makes the difference and how…

We now come to the last of eight articles in our series on “The Strategy Map”, to explore an approach that sits at the centre of it all. Before I get started, I want to say that I’m in awe of the private investor community. When everyone seems to know more than you about every stock out there, it’s…

When Peter Lynch first coined the term ‘multi-bagger’ he referred to companies whose share price had risen more than 100%, thus doubling shareholders’ original investment. A two-fold return is a wonderful outcome (especially in today’s markets) but when private investors hunt for multi-baggers, most of them are not really looking to just double their money. They’re after something much bigger.

This week, Megan has been looking at Adventurous Growth strategies, which are stocks on the Stockopedia Style Map that are high quality and have high momentum:

We know that the Quality and Momentum Rank are positively correlated due to the inclusion of measures of earnings momentum in both measures:

The Adventurous Growth investment style lends itself to high aspirations.

For a start, there are the anecdotes. How many of us have heard tale of the private investor who bought Domino’s Pizza or Bioventix soon after their respective IPOs?

Then there are the stars of the strategy, whose success is something that we would surely…

Who would turn away from the idea of buying bargain stocks right at the moment they have turned the corner? Discovering a hidden gem with a catalyst can lead to transformational stock returns. Many of the biggest stock market winners in any year begin their journey with low valuations, where something changes to trigger a revaluation.

Most investors love the…

In this week's Stockopedia Strategy Map article, Ed introduced the concept of Momentum. Momentum is the tendency for medium-term winners to keep doing well. A typical Momentum strategy looks at the share price performance from 12 months to one month ago. (In the very short term, share prices tend to mean revert rather than trend, so the last month…

In a bull market, when valuations are expanding and the market is pricing in a better future, there’s no faster road to profit than buying momentum stocks. When a stock is on the move, there’s a good chance it will continue in the same direction, especially if the power of institutional buying is behind it.

"An object at rest…

In investing, as in life, there are two types of bargain hunters.

In one camp are the bargain hunters who simply like to buy things as cheap as possible. A package holiday with all inclusive food and drink, for example. A shopping spree in Primark or a trip down the middle aisle at Aldi. In investing, we like to call…

Imagine you're offered $1 for 50¢ - would you take it? Welcome to the world of deep value investing: where you try to buy stocks at a significant discount to their intrinsic value.

It sounds simple, but nothing ever is. The $1 note might be torn, and a bit inky. Your friends may warn you it's not even legal tender.…

Investing in quality stocks is all about earning big returns over long periods – without much trading.

Fundsmith founder Terry Smith uses the tagline "Buy good companies, Don’t overpay, Do nothing" on his fund’s annual reports.

Legendary investor Warren Buffett has said that when he finds a great business, his favourite holding period is "forever".

Earlier this week, Megan…

A few weeks ago, my 14-year-old brother who has just started studying for his GCSE maths exams asked me to help with with a question on compound interest. As a passionate advocate for the importance of teaching investment concepts in schools, I was delighted. Compounding is one of the most valuable lessons a novice investor can learn and (for those…

Choosing a portfolio of stocks can seem like a daunting task, especially if you're new to the process. So many thousands of listed companies, so little time. Maybe you’ve years of experience but have struggled to bring consistency to your results. In either case, the key is understanding what pays off in the stock market, selecting a strategy that works…

The Winners

Stock market investors in developed countries have long been winners. They have enjoyed higher returns in exchange for higher volatility than any other asset class. These excess returns have allowed them to retire earlier, more comfortably and pass greater wealth onto their children. In their long-term study of asset returns, Dimson, Marsh, and  Staunton found that…

Beverage producer stocks have long been favourites with investors seeking reliable, defensive performers. And with good reason.

Many of these companies have enduring brands that deliver high margins and steady growth, year after year. Put simply, the economics of this business can be wonderful.

However, these shares have often looked quite pricey to me in recent…

When I wrote about income strategies, I started by debunking a couple of stock market myths. The first was that reinvested dividends comprise the bulk of stock market returns. (The truth is that both dividends and capital gains are roughly equal in their contribution to equity returns.) The second myth was that dividend growth investing is a good…

We are fortunate at Stockopedia to have a community of successful investors who have built portfolios worth more than £1m in their ISAs and kindly agreed to share their insights. In this series of articles we will explore their investment strategies and key lessons learned on how to pick stocks and manage risk when building a portfolio. Whether you are…

We are fortunate at Stockopedia to have a community of successful investors who have built portfolios worth more than £1m in their ISAs and kindly agreed to share their insights. In this series of articles we will explore their investment strategies and key lessons learned on how to pick stocks and manage risk when building a portfolio. Whether you…

With stock markets wobbly, it's a good moment to review the trend following model I've published occasionally over the last year. There is a well-known premise that asset prices have had a tendency to trend, and stock markets are no exception.

Brief primer on trend following

One of the simplest approaches to trend following is to compare the price of…

At first glance, converting annual ISA contributions of £20,000 into a portfolio worth £1 million might seem almost impossible in a typical working lifetime.

However, I think the numbers I’ll share with you here tell us that for an investor using their full ISA allowance each year, building a £1m portfolio may be a reasonable goal.

Later…

If you’re a British citizen over the age of 18, there is nothing to stop you from having both an ISA and a Sipp. Both are efficient wrappers to help your investments grow free of capital gains and dividend tax.

But which allowance should you use first? And are there other factors you should consider before setting…

Some investors may have never bothered to use their ISA allowance. The current Capital Gains Tax allowance of £12,300 may have seemed generous enough to cover any gains, while a tax-free dividend amount of £2,000 may have covered most of the portfolio income. But, unfortunately, this relatively generous allowance is coming to an end, as the following table shows:

The collapse of US tech lender Silicon Valley Bank -- SVB Financial (NSQ:SIVB) -- has triggered a sell-off in banking shares across the market. Despite this unfortunate event, an evenly-weighted basket of FTSE 100 bank shares would still have beaten the index by almost 10% over the last year.

Indeed, until recently, rising interest rates seemed…

Picking a platform for your Stocks and Shares ISA is not an easy decision. Wade too deeply into the world of price comparison and you can find yourself in a complicated tangle of calculations as you try to work out the cheapest option.

It is also a very personal decision - you need to pick the platform which…

The biggest advantage of investing in an ISA is the tax relief. Any returns you make on your investments are tax-free. This means no income, capital gains, or dividend tax on any of the returns in your account. And the savings from that tax bill can be significant - as we noted in our recent ISA guide, an investor…

Since its launch in 1999, the Individual Savings Account (ISA) has offered British investors a tax-free haven for their savings. Introduced by then-chancellor Gordon Brown, the ISA has saved investors tens of billions in capital gains and income tax. Indeed, this year alone, the tax wrapper is expected to save Britons over £7bn.

But by helping savers, the ISA…

In 2019, Muddy Waters shook up AIM by attacking the junior market’s then-biggest business, Burford Capital (LON:BUR). The investment firm, founded by famed short-seller Carson Block, had already enjoyed great success with its short reports on many Chinese companies listed in the US, but this was the first time it had gone after a British firm. In…

The Stockopedia Stock Screens are an invaluable resource for the intelligent investor. They enable investors to search for stocks that meet their own unique investment criteria without relying on others for ideas. Screens are particularly beneficial to me as a value investor since I am always searching for the most unloved investment ideas. These types of stock rarely appear…

Warren Buffett’s 2022 letter to Berkshire Hathaway shareholders is due to hit the wires very shortly. The Oracle of Omaha always has something worthwhile to say, and his letters usually make for a compelling read.

This year, I think it will be interesting to see what Buffett has to say about the potential impact of higher…

Companies that don’t have enough readily-available cash to deal with short-term spending requirements can find themselves at the heart of a liquidity crisis.

Businesses which suffer such a crisis in their immediate funding might have to return to the market for extra cash, or take out a short-term loan with a bank (likely at a high interest rate). When…

First let’s clarify what bankruptcy means. We all know it’s a bad thing, but the use of the word interchangeably with other terms for financial calamity can cause a bit of confusion when it comes to financial analysis.

Bankruptcy is the legal process through which companies which cannot pay their creditors may seek relief from their indebtedness.…

In this piece:

• Why recent performance and near-term forecasts aren’t driving share prices higher

• Why the hydrocarbon decline could now be quicker than expected

• Do valuation metrics support a tobacco-style investment in oil and gas producers?

I have to admit that I’ve always had a somewhat guilty fascination with oil and gas stocks.…

It’s the first week of February, which means US earnings reporting season has just kicked off. A time for investors to assess whether the monumental share price declines of the last year are justified by poor financial results, or if some of the companies which were rocked by indiscriminate selling in 2022 have retained strong fundamentals.

But that’s…

Terry Smith’s annual letter to investors in his Fundsmith Equity Fund has become something of an event. He’s opinionated, informed, and usually has something spicy to say.

This year’s letter came with an extra dose of anticipation, as we knew Smith would have to discuss why the Fundsmith Equity Fund fell in value and underperformed global…

In this article:

• Why the mining sector is more appealing to generalist investors than it has been in the past (hint: it’s associated with the tech sector and the green energy revolution)

• How the long-term demand for certain resources is obscured by short-term supply trends

• What you need to know about how the cyclicality of…

We’re closing in fast on the end of January (a month that has seen the FTSE and AIM All Share markets rally 3.4% and 2.4% respectively) and we’re perhaps ready to put the pain of 2022 behind us. But our annual subscriber survey results are in and - as always - our community has provided us with some interesting…

There has been plenty of juicy content for private investors to seek their teeth into this week. Announcements from retail sector continue show (or at least make it appear) that ‘everything is ok’, weakness in the housing market is being reflected in the numbers from some listed companies, and a profit warning from Robert Walters hints at trouble in the…

The Alternative Investment Market (AIM) has long been the favourite hunting ground of UK private investors. Not only does it host many of the most dynamic young companies in the UK, but the tax incentives (especially the relief on inheritance tax) encourage interest. But it's also probably the most heartbreaking part of the market, as so many companies disappoint.

Happy New Year and welcome back to our end of the week round-up of UK large-cap news. The RNS is still pretty quiet - although Next (LON:NXT) and B&M European Value Retail SA (LON:BME) showed up their peers by proving that it is possible to release a Christmas trading update in the first week of the…

Financial Charlatan of the Year

Every year, Twitter user fed_speak runs a popular competition called "Financial Charlatan of The Year". This tongue-in-cheek poll asks followers to nominate who they think has been the biggest charlatan in finance over the previous year. Naturally, the nominees tend to be people investors will have heard of, and past winners include…

If you’re anything like me, the Covid-years have thrown off your recollection of time. What state was the global economy in at the start of 2022? Was the UK in a lockdown or just anticipating one? Who was the prime minister? I recently retrieved my skiing jacket from the wardrobe and found a mask in the pocket. That means that…

In my last article, I described how value investors tend to be fairly agnostic to market conditions. Instead of spending a lot of time predicting inflation, interest rates, or when the market will bottom, they focus on buying businesses when they appear cheap during periods of worry and selling them during periods of exuberance.

Many investors will have…

Let’s suppose there are two types of economists. The first type thinks stocks behave in a predictable, orderly way. They treat stock selection as a ‘science’, rather than an ‘art’, and try to identify factors that drive stocks up or down according to a clearly defined formula. The second type thinks price trends are chaotic, even random, while stock picking…

I have written before about my strong dislike of Pearson (LON: PSON) the international textbook company and former owner of my old employer, the Financial Times. My dislike isn’t unfounded. Under the leadership of John Fallon (2013 to 2020), the company sold off its most profitable assets, leaving it with an education business which was unprepared for a digital…

A new week has brought new optimism to this weekly column, helped by the release of Telecom Plus financial results. The best performing stock in the FTSE 350 has had a stellar first half and investors will enjoy the benefit of its strong performance with a significantly higher dividend.

This week we will also run through the numbers from:

…

It’s earnings season on Wall Street. Many US firms have produced financial statements over the last month or so. It was also a busy month for director dealings. Directors at Merck & Co, JP Morgan and Goldman Sachs sold shares just as interim statements were published. Directors at other blue chips, including Coca Cola, purchased shares in the company…

Amid the spectre of the Bank of England’s miserable recession forecasts, another substantial interest rate hike and the general aurora of negativity swirling around the UK markets right now, it has been nice to find optimism in announcements from some of the country’s biggest businesses.

There has been a lot to digest this week

• Retailers defying the odds:…

Big oil has had an incredibly profitable quarter. In the last week, Exxon Mobil (US: XOM) and Chevron (US: CVX) - the two big players in the US have reported combined net profits of almost $31bn. Their peers in the UK, Shell (LON: SHEL) and BP (LON: BP.) have posted similarly lucrative income: $9.5bn and $8bn…

Timing market cycles is notoriously difficult for investors. But the potential rewards are significant. Even large, well-established cyclical businesses can see huge share price swings over the course of a cycle – falling by 50% and then doubling (or more) is not unusual.

Right now, I think it’s fair to say that the real-world economy is still in the early…

We have written a lot in recent weeks about the use of factors during various stages of a market cycle. To summarise: momentum has defensive qualities which keep stocks propped up when markets are crashing, value has the highest propensity to recover in the immediate aftermath of a sell-off and the StockRanks have a track record of…

We have been running the StockRanks since 2013. That is quite a long time, but arguably not long enough to explore how StockRanks perform when the market crashes. Investors have seen difficult times in recent years, but the StockRanks haven’t been through anything comparable to the crash of 2008-09. The market panicked in March 2020. However, the fall was nowhere…

Three decades of bumper house price and population growth have made for a comfortable foundation for the UK’s housebuilders and construction companies. Their share price trajectory reflects that.

And in 2020, after the lowest decade of house market growth for 30 years, when everyone thought the fun was coming to an end,…

Since global stock markets began their downward spiral in April, every sector has underperformed the FTSE All Share.

This depressing statistic can partly be explained by the fact that the All Share is a value weighted index and has therefore been disproportionately elevated by the relative outperformance of the largest companies on the market.…

And so the bear rolls on. At times like this it can seem that every stock in your portfolio is getting hammered, especially if you skew your portfolio towards sectors & styles that become out of favour. But there's rarely a bear market everywhere all the time.

As Ed Shing noted last week, the energy sector is a strong…

One of the most common requests for a Screening for Value article is for an income screen. It is not a surprise that income strategies are some of the most popular amongst value investors. The idea is that, by investing in companies that pay above-average dividends, investors can capture both the value premium from owning cheaply-rated stocks and generate a…

It’s rough out there. The long anticipated bear market is at last upon us. In the UK, the FTSE All Share has fallen 10% in the year to date, while AIM - where stock pickers like to congregate - has fared even worse. In the US, the S&P 500 - a long-time haven for passive investors - is down more…

Over the past few weeks, I have been looking at companies highlighted by my earnings-based stock screen. So far, I've found eight non-resource companies that made it firmly onto my watchlist: James Latham (LON:LTHM) Quarto (LON:QRT) Zytronic (LON:ZYT) MJ GLEESON (LON:GLE) Sanderson Design (LON:SDG) Renold (LON:RNO)

It's been a pretty brutal twelve months for everyone investing in stock markets - not only here, but all around the world. But one area of optimism has been the performance of the UK broader benchmark - the FTSE All Share.

According to my measurement, the FTSE All Share has fallen by 6.2% over the last 12 months since…

These markets are suffering badly from a global liquidity squeeze as central banks remove QE and hike rates. The media is enjoying pinning the blame on Truss and Kwasi Kwarteng but the real issues run a lot deeper. I'm not going to go into global macro mode, but it's pretty clear that we're now paying for all the Ponzinomics that…

My new husband and I are heading to Canada next month and when we got married at the start of September a number of generous well-wishers gave us Canadian dollars to take on our travels. At the time they perhaps didn’t realise how generous they were being. Since our wedding day the British pound has fallen 5% compared to the…

It was the summer of 2019 when I first began to brace myself for the end. Most of England was celebrating a remarkable cricket world cup victory. I was mourning the loss of two Championship points, Roger Federer’s last at Wimbledon.

It’s not the first time I remember exactly where I was when the greatest sportsman of all time…

I had a fascinating conversation with one of our subscribers back in March 2020. We speculated whether the economic climate of the 2020s would resemble the 1970s. Unfortunately, the comparison has become something of a cliche. Newspapers say the coming months will be like the Winter of Discontent (1978-79), when widespread strikes and industrial action resulted in rubbish piling up…

Over the past few weeks, I have generated value investing ideas using the Stockopedia screening tools. This week that quest continues with an earnings-based screen.

Most of the mainstream academic finance research has focused on the Price-to-Book metric, which was the focus of my last screen. However, it has been known for some time that using earnings-based metrics may overcome…

One of the top performers in among listed UK asset managers in recent years has been sustainable investing specialist Impax Asset Management (LON:IPX) - shares in this founder-led AIM firm have tripled in five years, despite a calamitous 50% fall over the last 12 months:

One potential headwind for Impax is that…

Once again, I would like to thank the community for providing such an interesting discussion about the renewables sector in the comments section of my article last week. Your insight has sparked several ideas for future articles (for example, the use of tidal energy or the opportunity for small nuclear reactors and hydrogen), which I will seek to explore in…

I spent last weekend in the Suffolk town of Aldeburgh - unique for its Martello Tower; river (which runs parallel to the sea for 10 miles); and for its curious position in the renewable energy debate. Aldeburgh sits two miles south of Sizewell, where the government has just given the go-ahead (and secured funding) for a third nuclear power station.…

Thank you to everyone who provided valuable insight on last week’s Freetrade article. I echo the thoughts of matt365:

I enjoy reading everyone's thoughts and comments. They really are a great source of learning.

And so with that in mind, this week I have attempted to harvest some of those insights and delve a little deeper into the platforms…

For investors who, like me, have only ever invested during the internet age, it’s hard to imagine week-long dealing periods and paper share certificates. My first investment account (an ISA set up with IG) cost me £24 a quarter with no added fees to buy funds. By the time I felt confident enough to start buying shares the price for…

In my last article, I introduced another classic value metric: Price-to-Tangible-Book, and explained why buying stocks at a discount to this may indicate undervaluation. As usual, I used the Stockopedia screening facility to search for potentially undervalued UK stocks. As many value investors do, I demanded a margin of safety by looking for PTBV < 0.7, with a check…

In my first few Screening for Value articles, I looked at results from one of the most straightforward value screens, 52-week lows. In this article, I introduce another classic: Low Price-to-Book.

Book Value is calculated by taking the total assets on a company's balance sheet and subtracting the total liabilities. It is also known as Shareholders' Equity, the term…

Tech giants Alphabet (US: GOOGL) and Microsoft (US: MSFT) - both of which have market capitalisations over $1trn - have kicked off the US earnings season on a slightly sour note. This time last year, both companies were reporting record earnings growth. In the three months to June 2022, they both missed the market’s expectations at the revenue and profit…

"I understand that I should buy quality, value, momentum shares and the StockRanks are a good guide to this... but I've still got a major problem when should I sell?"

It's a very good question. It's all very well thinking "90+ StockRank shares tend to beat the market" and buying 90+ ranked shares accordingly - but managing a portfolio of…

In 1985 Marty McFly flew Doc Brown’s Flux Capacitor-enabled DeLorean to the future. There he donned a pair of Nike high-top trainers in order to fit in with the kids of 2015.

On Monday night, I put on a pair of knee-high gold boots and travelled back to 1979 to watch ABBA in their heyday. There, I watched a…

There aren’t many businessmen like Elon Musk. After announcing his intention to pull out of his $44bn takeover of Twitter (US: TWTR) - a move which is set to cause considerable pain to the company’s shareholders - Musk took to the social media platform to poke fun at the situation. The tweet - which shows him laughing at the fact…

This year has been a humbling reminder of the cyclical nature of stock markets. In the UK, small and mid-cap shares have felt the pain of the sell-off more than most. But generally speaking, markets everywhere have come under pressure.

You don’t have to look too far to find the last major decline like this. In early 2020, stocks fell…

We’ve all been there… it’s the morning of a company’s financial results and the pressure’s on to get the gist of the update. It could be a personal holding already, or a stock you’ve been stalking for a while. Either way, it’s important to find the good news (and any bad news) to anticipate how the share price might respond.…

Tales of woe in the global stock markets have made me increasingly nervous about checking my portfolio performance as 2022 chugs on. It’s never nice to open your platform and see a sea of red, and it’s especially painful to witness the collapse when there is no obvious remedy. Sentiment is changing and it is hard to know how a…

On the scale of disasters that can befall investors, being left holding shares in a company that goes bankrupt is one of the most gut wrenching.

Regulators and market operators generally hold quoted companies to high standards. They have to abide by well-documented codes of financial reporting and governance. But there’s no escaping the fact that some do occasionally…

Companies with the potential to grow quickly are like a magnet to investors in the stock market. And while they can suffer in volatile conditions, they’re still the source of some of the most inspiring investment success stories you’ll ever hear. At their best, they can have a transforming impact not just on their shareholders but also their staff, customers…

There’s a saying in investing that “time in the market beats timing the market”. In other words, long-term trends in stock markets are overwhelmingly positive. The longer you stay invested, the more you can take advantage of the compounding effects of being exposed to them.

On the other side of that argument however, is the idea that selling up when…

Stock market investors don’t usually have to concern themselves with inflation. For the first two decades of the 21st century, central banks kept the rate of increase in prices well within their target ranges. And even in an environment where inflation is rising, the stock market tends to be seen as a good place to be. But is that really…

Periodic sell-offs are an undeniable fact in the stock market, and they range in severity from occasional-but-savage bear phases to much more common one-day setbacks.

Not only are these events hard to predict but they can also have miserable consequences. Even a brief pullback of just a few percent can be enough to cause panic if you’re unprepared. In…

When it comes to different approaches to the stock market, fundamental analysis and technical analysis are often seen as two completely separate disciplines.

With fundamentals, the focus is on stock selection and using data to uncover a company’s strengths and weaknesses. From there you can take a view about valuation and make predictions about the future.

With technicals, the…

Of all the metrics used by investors to understand the trajectory a company might be on, growth in both sales and earnings-per-share are among the most important.

These measures are a natural starting point when it comes to studying company growth. But they’re also useful in other areas, such as stock valuation. For that reason, you find them in…

The Alternative Investment Market (AIM) is popular with investors looking for fast-growing companies that have the potential to deliver exceptional returns. But the challenge is that there are literally hundreds of stocks to choose from, many of which are very risky and highly speculative.

In this article we’re going to look at why AIM is so popular and how…

One of the most important measures of a healthy stock market is the number of companies that choose to float and raise new money from investors. Company IPOs - or initial public offerings - are vital to maintaining the depth, diversity and efficiency of the market. But are they really worth investing in?

This summer, Stockopedia sets out to answer…

Interested in IPOs? You can now read our free IPO Survival Guide. In it, the team at Stockopedia provides unique insights into the world of IPOs, derived from an analysis on 258 IPOs between 2016 and 2021. These insights will allow you to make better and more informed investment decisions when presented with the next 'hot' IPO. You…

This time last year, the entrants to Stockopedia’s first ever Stock Picking Challenge were assessing the damage from one of the sharpest stock market plunges in living memory. This year, much of the uncertainty has gone and equity markets have been kinder.

In fact, despite the terrible problems that Covid is still causing, many international markets are back to their…

The question of whether or not countries should be run like businesses is a hotly contested topic. But, however you look at it, governments like companies have balance sheets and competing priorities for their time and money. A lot like the organisations we follow on the stock market.

They also share the risk and impact of debt. The difference…

Technological developments in recent decades have given investors the ability to access endless levels of stock market information within a matter of seconds. Key fundamental and technical data is available on a number of platforms, such as London South East (LSE.co.uk). Founded in 1997, this particular platform has grown to attract millions of visitors from over 200 different…

Dear readers: This is my honest review of AJ Bell Youinvest as Stockopedia’s Markets Editor. Neither I nor Stockopedia have been incentivised to write this review, so what follows are my genuine thoughts on the service, having been a customer for a few years.

AJ Bell Youinvest is one of the fastest-growing stock market investment websites in…

Over the past 20 years, stock market news, data and discussion has proliferated on the internet. Individual investors now have greater access to information than ever before, and one of the pioneers in this field is the online platform, ADVFN.

ADVFN’s services range from company news, alerts and basic investment tools through to premium newsletters and Level…

It goes without saying that 2020 has been a difficult year for everyone and the disruption caused by the COVID-19 pandemic looks set to continue into 2021.

This is equally true for the business world; while some companies have experienced an uplift in financial performance during COVID-19, many more have struggled to stay afloat.

This extraordinary situation has been…

Whether you’re new to the stock market or a seasoned professional, one of the biggest challenges in investing is finding profitable ideas.

For decades, journalists from national newspapers and investor magazines have offered tips about what you should buy. While these pundits might sound like experts, a look at their track records suggests that many of them should come with…

When we launched the 2020 Stock Picking Challenge late last year, it’s fair to say that nobody was predicting the kind of drama we’ve witnessed in the first quarter.

Coronavirus is causing misery for many people. And from an investment standpoint, the sudden and severe economic impact has plunged markets into turmoil.

Earnings are unknown, forecasts mean nothing,…

When you strip back all the political and economic turmoil of Brexit, 2019 turned out to be a solid year for UK shares.

That said, things got off to a shaky start. Markets were trading close to new lows as January 2019 got started. But that proved to be the bottom, and the mood turned bullish almost straight away.…

The S&P 500 index of America's leading shares has risen by 25 percent in 2019, marking another impressive year for an index that’s been on a blistering 10-year bull run. US shares and markets have mesmerised investors over the past decade - and they still dominate financial headlines around the world.

But while markets across the Atlantic have performed well,…

A few months after launching the Woodford Equity Income Fund in June 2014, Neil Woodford’s team published what’s known as its Active Share score. In doing so, they made a bold statement about the type of investor that Mr Woodford was...

Active Share is a way of measuring how ‘active’ a fund manager is (when it comes to…

A reputation takes a lifetime to build and a second to destroy. Over the past two years, watching the Woodford Equity Income Fund (WEIF) go from more than £10bn of assets under management to less than £3bn has been like seeing a mountain turn to rubble. The aftershocks continue to be felt across the fund management industry.

A nasty…

As a direct equities investor, I've never taken much interest in funds, but you couldn't avoid the Woodford Capital saga. Stockopedia HQ is in Oxford, and it was notable that Neil Woodford decided to set up shop on the ring road here. Initially raising a few billion, before growing assets under management well above £10bn. We tried to interview him…

After a break for the summer, the next StockSlam is going to be on Tuesday 12th November at Mello London in Chiswick. It’s free to attend and will last from 6:45pm until about 8:30pm.

Registration for the event is now open and you can reserve your place here: https://www.eventbrite.co.uk/e/stockopedia-stockslam-at-mello-london-tickets-78142679859

I still have a number of…

Hargreaves Lansdown is one of the UK’s biggest investment brokers - and like other platforms, one of its eye-catching pages is its "Top of the Stocks" feature. You may have perused lists like this for interest or even made investment decisions off the back of them. But have you ever considered what lists like these really tell you…

Burford is one of the largest (if not the largest) firms in litigation funding - a relatively new multibillion industry whose historically strong returns have begun to attract significant investments from pension funds, endowment trusts and the like. 

The company is popular with investors. Those looking to get a feel for the company as an investment over the…

I once observed two people facing the wrong way in one of those wave pools - it didn’t end well for them. 

What looked like a pleasant chat was interrupted by an artificial tsunami. They resurfaced after a second or two, coughing and spluttering, alive but very wet.

Looking at the year-to-date performance of Stockopedia’s 60 or so…

Back in April 2009 -- a little over 10 years ago -- world stock markets reached an inflection point. No-one knew it at the time (though some later claimed they did) but it was the moment when negative momentum triggered by the financial crisis stopped and equity prices started rising. These were the very early days of a new bull…

For many investors, the perennial appeal of fast growing stocks is their ability to deliver outsize capital returns. Forget value, forget dividend income… growth in its purest form is all about fast-paced earnings expansion lighting a fire under share prices. It’s about going big or going home. It’s the classic territory of popular traders like Mark Minervini and William O’Neil…

Not all profits are made equal.

For most investors and analysts, the Income Statement is the first port of call. That’s why it is home to all manner of financial shenanigans and accounting trickery.

Yes, company A and company B both generated net income of £100, but how did they generate that net income figure? The importance of this question…

One time I accompanied a senior analyst to meet the chairman of a company that was rolling out new units at pace. I was just out of university and what little knowledge I had of business came straight from the textbook. This was maybe my first chance to listen to actual professionals talk about the reality of running companies.

Whenever I write about behavioural flaws, I usually get to rely on a legion of academic research papers to explain them. This time I’m starting with some first-hand experience.

Over the past several years (perhaps longer) I’ve been dealing with a pretty strange psychological flaw of my own. It’s probably one of many.

For the most part, I’m…

In his chairman’s letter to Berkshire Hathaway shareholders this year, the billionaire investor Warren Buffett described his group’s investment portfolio as being like a “forest”.

Berkshire’s many and diverse businesses, he said, were its “economic trees”. Like any portfolio, it has an array of specimens (in Berkshire’s case there are vast numbers of them). They range in…

Stockopedia's discussion area has a long history. We initially set up a basic blog and forum back in the financial crisis as a space for more considered, and less noisy, stock market conversations. We immediately saw an influx of contributors and the membership grew. On the back of this, we started developing the range of data & analysis services that…

The stock market sell-off late last year was a reminder of how quickly a spell of bearish sentiment can start feeling like a full blown rout. Go-go growth stocks were pegged back, fast momentum plays were pummelled and even high quality firms saw their prices tumble.

Seasoned investors rightly say that short term pain is the price you pay…

For a good chunk of 2018, the UK’s equity markets were under the cosh and index prices fell across the board. But since the start of this year, there’s been a sense of optimism around. Political and economic uncertainties aside, the FTSE All-Share has managed a 6.8 percent gain in recent weeks. It’s a modest result, but one I reckon…

Sixteen companies were forced off the Alternative Investment Market last year because of financial stress or insolvency. That was up from nine companies that suffered the same fate in 2017. When you add them to those that hit problems but somehow managed to cling on (albeit with broken reputations and battered share prices), it’s a reminder of just how perilous…

There’s just no getting around it - British stock markets have performed dismally in 2018. The black clouds of Brexit and political incompetence have hammered the indices with the FTSE All Share down more than 12% year to date at the time of writing. But there is one bright note. Savvy private investors have been beating the market handsomely.

Last…

There was a good line in a post by the American blogger Ben Carlson back in February 2018. At the time the stock market was in ‘correction mode’, and he made the point that investors always need prepare for turbulence if they’ve got any chance of riding out the pain of falling prices. He wrote: “No amount of…

Wes Gray runs his boutique investment firm Alpha Architect with the determination you’d expect of a former US Marine. In a competitive industry dominated by big names, his small team of ‘quant ninjas’ are endeavouring to make themselves unkillable.

They’re doing it by bringing factor strategies and quant investing to regular investors. There’s no black box or secret sauce, and…

Building the world brain

Global investment opportunities abound and yet investors rarely leave their home market. Is it possible to conquer home bias and invest profitably in overseas companies?

Pooling our experiences can be a great time (and pain)-saver in terms of learning lessons. A lot can be gained from reading the conversations in the comments section of this recent…

Informational edge or home bias?

• Many investors diversify across different stocks, industries, and asset classes

• Not so many investors diversify across different stock markets

• Home bias can increase risk and cost money in terms of missed opportunities

Do you only invest in the UK-listed stocks? I do, even though UK indices make up just 6% of the world stock market. Adding the…

Smarter searching for all-weather stocks

At the start of October, the FTSE All-Share fell by nearly 7% in a week. Good companies are still cheaper than they were.

But how best to find them?

October 2018 was a story of fear overcoming greed, with investors haunted by the spectre of a bear market. Very appropriate for Halloween. We have built…

Share prices have fallen across the board in October, and it’s a reminder of just how quickly fear spreads when stocks start tumbling. My colleague Jack wrote this week about the sense of foreboding that’s hanging in the air at the moment. There’s almost a sense of inevitability that some kind of correction is past due. Knowing how…

Kevfle recently posted an intriguing article called “Can we beat the professionals?’ In this he touched on some interesting questions around the investment industry, which provoked a flurry of responses from our fantastic community here at Stockopedia.

Kevfle seemed to have several questions on his mind, including:

• Can we actually ever outperform the pros?

• Am I wasting my time?

• Is…

Kevfle recently posted an intriguing article called “Can we beat the professionals?’ In this he touched on some interesting questions around the investment industry, which provoked a flurry of responses from our fantastic community here at Stockopedia.

Kevfle seemed to have several questions on his mind, including:

• Can we actually ever outperform the pros?
• Am I wasting my…

Readers of the Stock Market Almanac may know that October is historically one of the most volatile months of the year for shares. The reason - if you believe in seasonal trends - is that many buyers return to the market in October (after selling up in May). And while that can send prices rising, the downside is…

There aren’t many Wall Street legends who command respect like Joel Greenblatt. After starting his money management firm, Gotham Capital in 1985, he and his business partner, Rob Goldstein, spent the next decade delivering returns that took Wall Street by storm.

Yet the nature of Greenblatt’s strategy meant long periods of super-high returns would be interrupted by spells of underperformance.…

James O’Shaughnessy is one of very few investors who can truly lay claim to having changed the way people approach the stock market. He’s also one of the nicest and most engaging people you could hope to meet.

O’Shaughnessy has spent more than 30 years researching equity market returns. His work has brought to the fore the power of…

It has become hard to tell the difference between silly season and the realities of what Brexit (especially a ‘no-deal’ Brexit) might actually be. This week we’ve had eye-catching scare stories about stockpiling food and medicine and the prospect of motorways being turned into permanent lorry parks...

With less than eight months to go before the official leave date,…

Over the past 30 years a number of investors and academics have been categorical about the power of investing in small companies. As a result, the size effect - the notion that small stocks outperform large stocks on average over time - has become an investing truism. But is that fair?

An interesting feature of the size effect -…

In 2013, a year after we launched the subscription service on the Stockopedia website we had an idea. Having read through hundreds of academic papers, quantitative research notes and books on the subject of stock selection we realised there were some common threads. Why not bring those threads together into a simple, intuitive and effective rating system for stocks?

First Officer: “Captain - one of our engines is failing.”
Captain: “Set throttle to maximum thrust on the failing engine.”

Even if you have never watched a sci-fi movie before, our captain’s response may sound a little odd to you, and for good reason. Engineering systems are designed to reallocate resources away from failing components and towards working components to…

Mark Minervini loves to talk stocks. After more than 34 years as a professional trader, he’s achieved a reputation as one of the world’s best.

Part of his secret has been to stick to a strategy of swing trading growth stocks. In essence he looks for the biggest moves in some of the market’s most exciting and fastest growing…

It’s sometimes hard to know the provenance of investing’s best known sayings, but the excellent term “diworsification” is usually credited to Peter Lynch. In his 1989 book One Up on Wall Street the ex-Fidelity fund manager made it clear that the wrong kind of diversification was a bad thing.

In context, Lynch was talking about the problem of companies…

There’s a line in Warren Buffett’s 2000 letter to Berkshire Hathaway shareholders, where he says: “Nothing sedates rationality like large doses of effortless money.” *

At the time, of course, Buffett was reflecting on two years of “irrational exuberance” that had swept through the U.S. market - propelling the prices of tech stocks (which were then starting to crash…

On Friday I asked Stockopedia subscribers a set of questions about their stock market performance in 2017. We’ve had a great response so far with 1,168 respondents and more coming in every hour. If you missed the invite, please do check your email inbox and submit your answers. We’ll be keeping the survey open for the next few days, but…

With just a few weeks to go until the end of the year, it’s inevitable that thoughts start turning to portfolio housekeeping and making new investment resolutions for 2018.

Overall, it’s been a strong year for equities. Strategies that target small-cap growth companies have done particularly well, and we’ve seen noticeable strong returns in higher quality value strategies, too.

It’s long been known that bad investment decisions can be caused by our susceptibility to emotions and cognitive errors. But to really understand these behavioural risks and how to avoid them, it helps to see how they work in different ways. The analyst James Montier once used some research about goalkeepers to do just this, and this is how he…

There are many ways to reach success in the stock market… but just like in politics, other people’s methods are often disregarded at best, and attacked at worst. Traders think Investors are boring old stiffs while Investors think Traders are mindless morons. You often see different classes of investors mocking each other’s blogs - technical analysis articles attracting the wrath…

We have just this morning released a suite of new features to the Stockopedia site - including the RiskRatings and the StockRank Styles.  I will be explaining these features in an extensive webinar at 1pm today (Thursday 4th May) - (Replay link is here).  The following piece is the copy from our

The subject of Stop Losses provokes heated discussion here on Stockopedia. Opinions are divided on how, why, when, where and if you should set a pre-defined exit price on a trade. Some investors won’t use stop losses, but others can’t live without them.

One of the biggest questions about stop losses is why they should even be used in the…

ISA season and the new tax year are as good a time as any for a spot of portfolio spring cleaning. But in making the decisions to add new positions and cut back others, there are potential pitfalls to be aware of. Billions of years of evolution have wired humans to think and act in certain ways - but they’re…

After a couple of minor roles in the City, I wound up at Goldman Sachs in their ultra high net wealth private client division. As is usually the case as a junior you are keen to make a good impression and find promising investments to pitch. The problem was I was rather independent minded and preferred to come up with…

If you are anything like me, when you started investing in the stock market you read furiously to generate ideas. I subscribed to every newsletter I could get hold of. I hunted high and low for stocks that had the capacity to change the world. I searched the web for proof that other investors were buying them. This led me…

I genuinely do sympathise with anyone who started investing in stock markets for the first time in January 2016. It's not been an easy environment - but let’s get one thing straight it’s not exactly been bad. If you've invested through 2000 and/or 2008 you'll know what bad really is and it’s much, much worse than it is now. The…

Here’s a quick test...

Let’s say I offer you this sequence of numbers - 2-4-6 - and ask you to figure out the rule that I used to create it. All you need to do is suggest some more number sequences to see if they fit my rule. I’ll tell you if they do or they don’t.

What…

Regardless of what the marketing departments at some major fund management firms might like you to think, the concept of ‘factor’ investing has been around for decades. The characteristics of Quality, Value and Momentum have long been credited as a source of some of the strongest returns in the stock market - it’s an open secret. But despite validatory evidence…

Ahead of taking him to lunch at his favourite restaurant, I’d agreed to meet Robbie Burns at his office (a second home) on the banks of the Thames in west London. It later transpires that the place has been be a pretty smart speculation in London’s booming property market. But after a couple of hours with him it’s clear that…

Back in 2012, shares in the media company Trinity Mirror looked surprisingly cheap given the amount of cash the business was throwing off. Despite its outdated business model, the newspaper publisher was still managing to juggle a high level of debt and a troublesome pension deficit. But what was more concerning was its seeming inability to adapt to…

When it comes to investing successfully in UK smaller companies, Lord Lee of Trafford needs no introduction. Famous for being one of Britain’s first ISA millionaires, he invested around £150,000 in tax-free wrappers over the course of 17 years after personal equity plans were first introduced in 1987. His investments took him past the million pound mark in 2003 and…

The study of how human instinct impacts on investment decisions is hotly debated and sometimes controversial. But even Ben Graham, the father of value investing, was aware of the potential for investors to err. He famously warned that “the investor's chief problem - and even his worst enemy - is likely to be himself.”

One of the best known behavioural trap-doors…

In the aftermath of England’s early exit from this year’s Rugby World Cup came an intriguing but sadly familiar tale of misadventure in the stock market. During the tournament preparations it’s alleged that the team’s kit manager shared a tip about the ‘exciting prospects’ of a micro-cap oil exploration company. This apparently lulled some players into parting with…

In the ten years to 2014, shares in online fashion retailer Asos soared from around 7p to £70 each. The stock became the stuff of folklore among those that had either made a fortune or missed the chance of making millions by selling out too early. Its relentless growth seduced investors and created blistering momentum that pushed it to a…

When market valuations fell sharply this summer, Neil Woodford, the highly respected fund manager, described how sliding share prices can be overwhelming and distort rational perspectives. He said that while it can be difficult to remain focused on fundamentals when markets fall dramatically, it’s a chance to look for opportunities where the falls have been heaviest.

In…

When Warren Buffett raised his stake in Tesco in 2012, little did he know that he was breaking one of his own investment rules. He’d initially taken a position in the UK retail giant some years earlier. After a profit warning and news of increasingly fierce competition, Buffett chose to buy more shares as price started to slide. It was…

Faced with choosing between a $10 bottle of wine and a $90 bottle of wine, which would you go for? In one experiment - with the prices of each wine clearly marked - nearly twice as many people preferred the taste of the most expensive bottle. But unknown to the volunteers, the two wines were exactly the same.

This test was…

On our journey to build the very best data service and toolbox for investors, our team at Stockopedia has developed an investment philosophy. It’s obvious that investing is a very personal business; everyone is driven by different aims, timeframes and risk appetites. But we believe that getting to grips with a set of four broad principles can set investors on…

One of our subscribers today (dangersimpson ) sent me a marvellous piece of research by Michael Mauboussin entitled “Managing the Man Overboard Moment - making an informed decision after a large price drop".  The insights contained in this piece hold some great lessons for all stock market investors.  He shows how to decide whether to buy,…

So I'm sitting down to watch the first match of the Brazilian world cup and I realise that my 7 year old son knows the name of every single player on the pitch. Not only that but he knows their positions and their shirt numbers too. Now I'm not totally ignorant on football matters, but his depth and understanding of…

Individual share prices are astoundingly volatile. A useful practical measure of volatility is the difference between the high and low of a share's price over a twelve month period. Since September 2013 the average share on the London Stock Exchange has a high price more than double its low - yes more than double, 112% to be precise. When you…

A lot of what we do at Stockopedia is based on the premise that it's not so hard for a typical investor to 'be their own fund manager' - that using the best quality fundamental data to implement a systematic approach to the stock market can reap substantial rewards over the long term. Yes you can beat the City.

Surely the simplest way to become rich in the stock market is to find the perfect young growth stock, fully invest, and ride it for 30 years. But a piece in the FT at the weekend caught my eye which illustrated just how hard it is to find long term winners in the market. The piece highlighted the biggest winners…

There’s a war at large in the stock market today that may be hurting your portfolio returns without you even realising it. Over the last hundred years the players in the stock market have had a fairly standard approach to reaping their profit - that of the stock picking ‘hunter’. But in the last 30 years, as the technologies of…

As we've discussed, the weight of evidence suggest that it's possible to systematically beat the market over time, but that's not to say that it's easy - far from it. It requires a focused strategy, hard work and discipline. However, not enough attention is given to the importance of also having a good investment process. Over an investing lifetime,…

For much of the last 35 years, most of the investment management world has promoted the idea that individual investors can't beat the market. To beat the market, stock pickers of course have to discover mispricings in stocks, but the Nobel-acclaimed Efficient Market Hypothesis (EMH) claims that the market is a ruthless mechanism acting instantly to arbitrage away any…