Category Archives : Investing Theory

A list of articles on the theory of investing. Articles that give you the knowledge on how to invest. Looking at the Invest Money tab to find out what to invest in.


Should I Hedge Currencies In A Portfolio?

One question I have been receiving regularly is whether investors should hedge currencies in their portfolio. This question has become increasingly important since Brexit as the value of the Pound has seemed to gyrate heavily over the past two years. The simple answer as to whether I hedge currencies is No. If I were to hedge currencies in my portfolio, a question I would ask myself is how would I do so? Should I base it on the currency of the country in which the companies are listed? This obviously would not work. There may be no connection between the country in which a company is listed and its area […]


How Will the Brexit Transition Impact Consumer Staple Stocks?

Experts have varying opinions on how UK stocks are being impacted by the ongoing Brexit transition deal. On the surface, it seems like Brexit isn’t doing the UK stock market any favours. It has under-performed over the past several years, with the gap widening after the historic Brexit vote in 2016. This, in turn, has led to increased volatility for the pound. However, the link between Brexit and the stock market has always been very complicated. Granted, UK stocks had a torrid start this year, as the FTSE 100 became the worst performing major European index in the first quarter of 2018. In June, the FTSE 100 recovered some of […]


The Importance Of Doubling Up On Your Winners

Every investor wants to emulate Warren Buffet. That is why there is so much written on the oracle of Omaha’s strategies and stock picks. You don’t have to search far for articles on how Warren Buffet buys excellent businesses at depressed share prices. But one often overlooked aspect of Buffets success is how the great man doubles up on his winners. How he buys more shares of a winning stock as it moves higher. Just look at Warren Buffets recent trades in Apple through his holding company Berkshire Hathaway for an example of this. He first bought AAPL nearly two years ago at a price of about $110 a share. […]


Top 25 Global Brands – The Returns They Provide For Investors

Anyone who has been following this site knows that I invest in high quality companies that possess a sustainable economic moat. One of the economic moats that I have explored extensively on this site is brands. Companies that possess high quality brands have earnt above average returns for longer than normal periods of time and in the process have created enormous wealth for their owners. Whilst brands have done well historically, the consumer landscape is changing quickly. Many brands have lost their appeal and only a handful are worth their elevated price today. I have written articles regarding this titled ‘The Death Of Brands – What Investors Need To Know’ […]


A High Share Price Does Not Mean A Company Is Expensive

One statement I often see in my inbox is ‘ I will not buy company X stock because it has a high price and is too expensive. I would rather buy Company Y as the share price is lower.’ This is a common misconception many first time investors have. Just because the price of a stock is high does not mean it is expensive. And just because a company has a low stock price does not mean it is cheap. You need to look at more than just the ticker price to identify an expensive or cheap stock. Have a look at the following example. Company A and Company B […]


Procter & Gamble (NYSE:P&G) – Will Its Brands Continue To Outperform?

Old economy stocks appear to be out of fashion. I wrote about this recently in an article outlining my PepsiCo share purchase. Investors seem to have ditched consumer staple stocks in the first half of 2018 for racier growth stocks. This seems to have left many stellar companies on valuation levels not seen for a number of years. Whilst stocks in the consumer staple segment have gone down as whole due to treasury yields hitting 3% and yield hungry investors rotating out of bond proxies, some names have been hit harder than others. Take Procter & Gamble for instance, it has dropped to $73 from its recent peak of $93 […]


The Obvious Conglomerate Value In The UK Stock Market

Last week’s announcement of a split of Costa from the rest of the Whitbread business has got me thinking, there is a lot of untapped value to be found in UK stocks. Just take Whitbread for instance. The sum of parts value per share is estimated to be about £50 as seen by this FT piece (https://ftalphaville.ft.com….. Yet Whitbread is still trading in the low £40s and was trading in the £30s for most of last year and the year before when I initiated my position. It was clear to see Whitbread offered much more than its share price suggested but most investors didn’t want to look past the top […]


Investors Are Fickle As Seen By Sages Share Price Volatility

The more I learn, understand and partake in the markets, the more I realise that many investors should not be investing in the stock market. Don’t get me wrong, I do believe that the stock market is the greatest wealth generating tool ever created but I just feel too many people don’t use it correctly. Most people treat the stock market like a casino as opposed to it allowing them the chance to buy ownership stakes in wonderful enterprises. Most don’t have the mental aptitude and calm persona to withstand short term volatility. They do the most wealth destructive thing by selling out low when a stock price moves downwards. […]


The Mutual Fund Game Is Rigged In The Managers Favour

I have alluded to fees being an antithesis to performance many times over the past few years. Fees are the main reason why index funds outperforms actively managed funds. The following from famed venture capitalist Chris Sacca further cements why fees are an investors worse nightmare and that mutual funds are rigged in the managers favour. Although the comments below are to do with venture capital but it could as well be applied to mutual funds. Have a read and see whether or not you are still comfortable holding your money in a mutual fund. Chris Sacca on Fees: “This is a rigged game, right? And I’m just looking to […]


March Monthly Stock Purchase – Perseverance and Temperament are Key To Investing Successfully

2018 has so far been a dreadful year for the UK market with prices dropping 7.2% year to date. This UK has been the worst performing developed market in 2018. Whist they have been several profit warnings for London listed companies, part of the fall in UK shares has been due to a market de-rating. Many companies in the UK market are trading at discounts when compared to global peers of similar quality. Just look at Royal Dutch Shell trading at a discount to Exxon Mobil, BAT trading at a discount to Altria and RB trading at a discount to Church and Dwight. This is why it is an important […]