In my last post I promised to list some ways you can find companies that may go up significantly in price. Buying low and selling high -- the holy grail of value investing can be achieved through a variety of “strategies”.
As a continuation of that theme and my participation in the MOI Global European Investing Summit, I thought I would summarise for you a few of the value investing strategies outlined by John Mihaljevic in his book that has proven invaluable to me: “The Manual of Ideas: The Proven Framework for Finding the Best Value Investments”.
To keep things super simple, I’ve outlined the top 5 strategies that are easier for individual investors to implement.
1. Good & Cheap. For lists of stocks that are of good quality but perhaps temporarily low in price.
“Magic Formula: The Little Book that Still Beats the Market” by Joel Greenblatt
2. Jockey stocks. Picking companies that have exceptional CEOs and leadership (jockeys) that can steer a company successfully over many years.
“The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success” by William N. Thorndike Jr.
3. Copycat. The buying and selling activities of the larger funds have to be reported to regulators. Although the information is delayed by weeks, for long term investors following the picks of the the superstar investors is a good bet.
4. Small caps. Research has shown that smaller companies outperform larger ones over time. As larger investors need to make larger investments to deploy their capital, smaller companies are good hunting grounds for the savvy individual investor.
5. Special situations. Situations that may result in a future increase in value such as spinoffs, bankruptcy etc.
“You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits” by Joel Greenblatt
There are a number of excellent in depth value investing courses both in person and online, this is a just a basic taster. Email me if you want more recommendations!
Happy Halloween -- I have a spooky post coming up for you….