As a long time lurker on this forum, I was inspired by Robusta's thread documenting his investment journey. Therefore, I decided to shamelessly steal his idea and do the same. Opening yourself to public ridicule is a great way to make sure you think things through properly.
I've been learning about investing for a few years now, but kept my investing strictly to my super fund. I have had some professional exposure to analysis of financial statements, risk assessment and software development, skills I intend to use and consider my competitive advantage. I'll post more on this at some point later.
1. Don't lose money.
2. I have up to $50,000 to invest.
3. No leverage.
4. I will make one $2,000 investment a month.
5. Rule number 3 will be broken if there is a special opportunity, or if there's none with sufficient margin of error.
6. No more than 20% of portfolio into a single stock, but I won't necessary sell down what I already own.
What do I want to own? I am generally of an opinion that selecting stocks not to buy is not only more important, but also much easier to do. At the same time, there's often some very special opportunities in places where no one looks. Also, some companies have special characteristics where standard rules don't apply. For instance, I will tolerate higher debt if a company owns premises it operates on, or other quality assets to back it up.
So I will look at (nearly) everything. But generally, I will only buy companies that have at least some of these:
1. I feel have every chance of being around and doing very well 20 years from now.
2. Company founder or long serving management on board, and owning a large stake in the company.
3. Consistently profitable over many years.
4. Acceptable or higher ROC.
Things I generally won't invest in:
1. Things I don't understand, whether it is the business, the industry, or the annual reports.
2. Companies that are generally not profitable.
3. High debt.
I am also cautious with companies that issue lots of new shares and spend a lot on acquisitions, but I feel these need to be analysed individually to form an opinion.
How much? Cheaper than it's worth. We can discuss the finer details.
When will I sell? Standard criteria:
1. When I made a mistake.
2. When circumstances changed.
3. When there's a better investment.
4. In some special cases, when performance objective was complete. Will mainly apply to less than stellar companies trading below NTA.
I should also mention that I am very much of a "value" nature. Stop losses, charts, momentum, etc. do not suit me for multiple reasons.
Going forward I will document all my trades, and provide my reasoning behind them. I will post some random thoughts of mine every now and then. I hope someone will find it as useful as Robusta's thread was for me.
Thank you for reading.