Tuesday, 8 February 2011

10 Up! Taking Stock...

Not quite the first ten-bagger yet or a value-added version of a new soft drink, but 10 Value 10 has reached the ripe old age of 10 posts!

Ok, I'm not quite in a position to look back over a long and illustrious career of successful investing, but it's a good opportunity to take stock. My observations and learning points so far:

1 - This is good fun! Better still, I feel that I am getting value out of the discipline, objectivity and consistency that rules bring; 

2 - But lots of work - I need to be more selective in selecting candidates before I launch into the detailed analysis. This has been skewed slightly as I am working through my existing portfolio as well as looking at new opportunities. This will resolve itself as I become more selective as I focus on new opportunities more; 

3 - Return on Equity - I know it's important, but I haven't completely got my head around RoE. Watch this space for further discussion;

4 - Free Cash Flow - I need to focus more on this as an alternative to EPS for a measure of quality and sustainability of earnings;

5 - Market cap hurdle maybe too high. I might consider dropping it to £20-25m to increase my hunting ground (although taking note of observation #2). Watch this space; 

6 - Avoid specific sectors - Some sectors do not sit easily with me. I will be more discriminating in which sectors I delve into. I will struggle with house-builders, construction and "people" businesses for instance;

7 - Revise Rules - whilst it is good to have some hard and fast rules to abide by, it is important to be fluid. As I read, develop and refine my learning, I will consider refreshing The Rules as appropriate;

8 - Portfolio - a measure of tangible success will be monitoring portfolio performance. From 31 March, I intend to publish quarterly updates of (i) companies covered in my analysis on this blog and (ii) my actual portfolio (which includes more besides) to see how much progress is being made;

9 - Techie skills are basic - apologies, but I'm focusing more on the content rather than the pretty pictures. The blog will become prettier one day...;

10 - Patience is required - I'm in it for the long-term and need to focus on long-term results. Short-term distractions like the recent beating up of HMV have been most unwelcome!

Thank you to all of those who have taken the time to provide feedback and comments. 

Next stop: 100.


  1. Enjoying the posts. Keep it up. Europe/uk needs more value.

  2. Thanks K2. I'll stick to the UK for time being but Europe would be an interesting foray

  3. Follow your comments on III. Always look forward to your blog posts too. I think a lot of people follow a similar strategy to yours and gain a lot from your input.