Category Archives : Practical Advice on Investing

Articles on the practical aspects of investing. Articles show where to put your money. If you want to know how to invest, look at the Investing Theory sub menu


Billionaire Charlie Munger On How To Get Rich Through Investing 1

One of my favourite investment thinker and theorist is Charlie Munger. And if you have read any of his investment pieces or listened to any of his interviews, you would understand why. Mr Munger is a stern believer that an investor would be better served by focusing on better quality businesses, even if the price were higher, because those businesses could be held for decades, continually churning out cash and profits for the owners. This level of thinking rubbed off on his long-time business partner, none other than the legendary Warren Buffet, and led to Buffet acquiring stakes in quality companies such as Coca Cola and shunning the “cigar butt” […]


Freetrade – A Look At The Fee Free Share Dealing Platform 5

Rip-off Britain. Nowhere is this statement more true than in the world of finance and investing. We as the public are getting fleeced by the stock-broking world. The average price we pay per deal is £10 which is crazy. For a buy and hold investor like me who only makes about 15 trades a year, dealing fees add up to £150 per annum. And considering I have a good 40 years of being an investor ahead of me, total dealing fees balloon to £6,000. And if you think that is bad, have a look at this. If all I did was put the £150 a year spent on fees in […]


Naspers and Tencent – A Great Arbitrage Opportunity 3

It is common knowledge that big companies don’t have fast growth. This has become so ingrained in investor minds that many growth investors do not go anywhere near big blue chip companies. But with most theoretical concepts, there is an anomaly to the rule. The anomaly in this case is a $400 billion company growing at 40% a year. The company is Chinese and goes by the name of Tencent. Now I know what you are thinking when you hear where this company is based. But I urge you to read on and understand why I rate Tencent so highly and consider it one of the best companies in the […]


Taking Money Off The Table By Trimming Share Positions

Over the past week, my online broker had technical difficulties with their website which meant that I was unable to deal in certain securities. Rather than sit and do nothing like most customers, I decided to call them up to voice my disappointment at the level of service. As a result, I got two free trades which was a win from my perspective.This provided a great opportunity to clean up my portfolio by selling my Telefonica position and trimming G4S as its share price has run ahead of its valuation. Let’s start with the outright sale first. Telefonica has risen 21% since I bought it one year ago and I […]


Dividend Reinvestment – A Way To Juice Investment Returns + Great candidates 1

Dividend Reinvestment is one of the most important concepts when it comes to investing. It is a way of owning more shares or units in a fund without putting your hand in your pocket for more cash beyond the original investment. It is a way of getting shares for free. To see how dividend re-investment works, take a look at the following. Say you own£10,000 worth of shares in Company A. This pays a 10% dividend each year, equal to £1,00 on your £10,000 investment. If you reinvest that £1000 in more Company A shares, you will have an investment worth £11,000. Fast forward one year and your 10% yield […]


Is Paypoint Worth a Punt? Great Financially But Does It Have A Future.

Whenever I run stock screens to try and find new shares worth investing in, Paypoint always seems to pop-up. The company has great Returns on Capital, strong Free-Cash Flows and a Bullet Proof balance Sheet. But the one thing that has always stopped me from investing in the company is the unknowns about its future i.e. the implications of its business model in a cashless world. Paypoint is retail payment processor that allows customers to pay utility bills, pay council house rents, buy lottery tickets, top up the credit on a mobile phone and send money to other people via its terminals which are found in local shops. The Financials […]


Lindsell Train Investment Trust (LTI) Full Portfolio Breakdown – UK, Global and Japan Equity

The Lindsell Train Investment Trust has had a remarkable run over the last 10 years. Over this time, it has produced gains of just over 400% or 16% per annum. This is simply amazing. It is no wonder the investment trust is trading at a 15% premium to the value of shares it holds. If you think a 15% premium is crazy, just over a year ago it was trading at a 60% premium. The performance of the LindsellTrain Investment Trust and its exceptional returns haven’t gone unnoticed and I have had a number of readers contact me asking what individual stocks the fund holds. As such, I have done […]


Shire Stock Purchase – The Importance Of Low Dividend Yield and Fast Growth In A Portfolio

Regular readers will know that I have been a big fan of Shire as of late. The company has fantastic growth, a pipeline that is envied by other biotech’s and a management team that is astute and rational. The best part about Shire is the valuation with shares trading hands at a P/E of less than 13. When a company looks attractive, I always ask myself ‘is there something I am missing? Is there something that I am not seeing that is making investors trade the stock at such a cheap valuation relative to its peers.’ With Shire, I think the answer is that investors are overlooking this stock due […]


10 Cheap Stocks To Buy Using Different Valuation Metrics 4

Everybody loves to spot a bargain and investors scouring stocks are no different. But what many new investors fails to understand is that there is a difference between shares which are ‘cheap’ and those which offer genuine value. To help in identifying undervalued stocks, there are a number of ratios to look at. In this article, we will see which shares are cheap based on P/E ratios, PEG ratios and Price to Book ratios 1. Price to Earnings Ratio (P/E) P/E Ratio = current share price / earnings per share If Company A currently has a share price of 100p and is forecast to generate earnings per share of 20p […]


GlaxoSmithKline (GSK) Stock Purchases – Pound Cost Averaging My Way In To This Healthcare Giant 1

When I first decided to become a dividend growth investor, GSK is one of the first stocks I looked at. The company met the criteria beginner investors should look for. Namely, GSK has strong Free Cash Flow, a bullet proof balance sheet, good returns on capital (12%), strong returns on equity (15%) is an easy to understand business,has stable and predictable growth, has economic moats in its consumer business and it pays a hefty dividend. What also swung me to looking at GSK was the number of income fund managers holding this stock in their portfolio thus showing that the company is highly regarded in the wealth management world. The […]