Editor's choice

Think of your country, don’t fixate on dividends

Having just written a series of blogs on income investing, I feel like I'm part of a movement. A growing band of investors, fund managers and journalists touting income as a safe and profitable way to invest in the current market. But there's something about this story that makes my contrarian flesh creep. It's not just a band its a bandwagon.

The deliberate income portfolio

Although my first two posts on income investing were likened to a dividend war, their purpose was more positive. To challenge the case for income investing, to better understand why people do it.

Why dividends are everything, and nothing

Using the proportion of equity returns from dividends to advocate income investing is misleading. It's the wrong statistic. It's 73% of a tautology...

The accidental income portfolio

Dividends are like crutches. If you can walk properly with out using them, it may be best to

Stockopedia concludes an article on the merits of dividends with an intriguing statement: investors love dividends, but nobody really knows why. I don't love dividends, but I can supply another reason why many investors do.

Introducing the Human Screen

Going supernova

Until a couple of weeks ago, the first stage of my investment process was to screen the market for statistically cheap and financially strong companies. Over the years I've tinkered with the screens so they snare an increasingly wide range of companies and now I've abandoned traditional screening altogether for the Thrifty 30* portfolio.

Backing companies doing well, and companies doing badly

Reliables and recoveries

I focus on recoveries and reliables because I think these situations are identifiable, and what happens next is fairly predictable. But there is a curious contradiction in backing companies that are doing well and companies that are doing badly.

Throwing the net wide open

It's performance, Jim, but not as we know it I've updated the Thrifty 30 performance table and as usual have nothing to say about the portfolio's performance in terms of share price movements. But I'm still thinking hard about my my own performance.

Towards the perfect PE

Exposing Johnson's beating heart

If you scrape away the nasties, the pension fund, the debt and the operating leases, there's a perfectly viable business at the heart of Johnson Service on sale at a reasonable price. I reckon it earns a 12% return on capital, also promising investors an earnings yield of about 12%, perhaps more, at the current share price.

Momentum: the value investor's best friend

Quantitave Value Investing in Europe: What Works for Achieving Alpha

There is a growing literature on statistical methods to beat the market inspired by the original classics, Dremen's Contrarian Investment Strategies and Greenblatt's Little Book, but a new report uniquely focuses on Europe and adds momentum to the mix of factors tested. Like other studies, it shows simple value measures beat the market, but with a surprising twist.

Kamikaze trade might pay off

Investing in the unlisted

I'm going to stray off the subject of the Thrifty 30 portfolio today, and describe a trade I couldn't make in the model portfolio because it doesn't include unlisted shares. In some ways it felt like a kamikaze trade using a small portion of my own pension fund. But I'm relieved to discover, it probably wasn't!

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