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

Fidessa Plc – A Takeover Approach Of An Increasingly Rare Serial Compounder Of Wealth

This past week Fidessa Plc – a company I have been buying shares in via my monthly stock purchase programme – received a takeover bid from Temenos for a total value of £36.467p a share. The shares in the company consequently shot upas a result of he takeover bid and are now trading at £38; a price above Temenos bid price. The reason for the shares shooting higher than the bid price is due to heavyweight investor Elliot disclosing an increased stake in Fidessa implying that the current takeover price undervalues Fidessa. Elliot normally gets what they want – just look at how Qualcomm increased their bid for NXP semiconductors […]

RWS Holdings PLC Stock Purchase – Buy Quality Companies During Market Selloffs 1

What just happened this past week? After a year and a half of smooth sailing, volatility reeked havoc in the stock market this past week which resulted in huge fluctuation in stock prices. For investors with cash on the sidelines, it provided a good opportunity to ‘buy the dip’ and buy certain shares at 10 – 15 % off. I do admit that I was a little slow in reacting to the initial sell-off as there were a number of shares offering attractive valuations. But thankfully I was able to pull the trigger and buy myself shares in a company I have been following for a long time now – […]

My Dividends Are Producing More Dividends – Dividend Reinvestment Compounding returns 2

Dividend reinvesting is one of the most important concepts when it comes to growing your wealth over time. Research has shown time and again that investors who reinvest their dividends tend to outperform those that don’t over time. The outperformance can be huge and could be in the double to triple digits over the long-term! Have a look at this example on Galxosmithkline (GSK) to see how dividend reinvestment would have boosted returns. What is Dividend Reinvestment? In short, dividend re-investment is a strategy that allows investors to own more shares or units in a fund without putting their hand in their pocket for more cash beyond the original investment. […]

A Share Of Stock Is Just An Ownership Stake In A Business – Unilever Case Study

I recently read a report that the young generation of today are the most adverse to the stock market in recent history. I think a big part of the reason people are scared away from investing is they don’t understand that a share of stock is a piece of ownership. Let’s look at Unilever as an example. When you look at the company, you see a business that sells great products ranging from Lynxs deodorant to Magnum ice cream to Toni & Guy haircare. Last year, it brought in £43,171,950,000 in sales. After paying all of the expenses, salaries, and taxes, the owners were left with £4,245,700,000 in profit. Since […]

Accrol Papers – A Catastrophic Loss From A Small Cap 1

Every Investor, through the course of their investment lifetime, will experience a negative setback in the form of a bad investment decision. No investor has a perfect record. And if any of them were to ever tell you otherwise, you can be sure that they are giving you ‘alternative facts.’ Even the greatest investor of all time, Warren Buffet, has made bad decisions. Most notably of these was the purchase of Dexter Shoes which has cost Berkshire Hathaway an estimated £7.2 billion and growing to date – as the purchase was made using Berkshire Hathaway shares! Ever since I launched my income focussed portfolio over two years ago, it has […]

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 […]