I have been investing since late 2001.  This has been fitted around my life, so I haven’t been consistently in the markets.  I have spent time trying various things – quantitative systems, day trading, hedged portfolios, the works.  What I have ultimately settled on is a basically fundamentally based – I buy stocks where assets or cashflow are undervalued, or I think something will happen to drive the price up. I seldom use a stop, equally I seldom add much to a losing position – though I will on occasion.  I then wait.  I hold positions for years, not months (usually).  I will exit if I think the opportunity has disappeared due to price appreciation or if the facts have changed. I take big profits and seldom big losses, as long as the losses aren’t too big, too frequent or for the wrong reasons this is OK.

In general I avoid punts – stocks with binary outcomes – for example junior oils / miners / biotech- if they strike they go up 10X if not 0.  I try to stay within my circle of competency, however I will look to expand this if I smell money.

I have between 10-15 positions in my portfolio coupled with some funds.  I hold some secured debt which I use as leverage, I can also lever up as many of my positions are held by spreadbetting companies (for tax reasons).  This gives me the opportunity to use (say) my £1000 plus £200 debt = £1200 – levered up 5X to £6k.  I have never done this.  At most in 09 I levered up 2:1.  Usual leverage is about 0-30%.  In recent years I have been unlevered or have held cash.

My typical returns are in the region of 20% per year.  Unfortunately I don’t have a great deal of capital so this isn’t enough to live on and to continue to accumulate.

The portfolio is regularly tested with an assumption of a 50% across the board fall – if I am still OK after this – ie. I have enough to avoid a margin call and to add to play the inevitable rebound then all is well, if not, then I need to make changes.

I worked in finance between 2005 and 2008 in a couple of jobs – as a futures  trader at Futex, a quantitative analyst at Skandia and as an equity researcher at Putnam Investments in London.  I left as I didn’t enjoy the lifestyle (though I enjoyed the job). There are/were some good people there and I learnt a fair bit.  Since then I have worked mostly in the public sector – recently three days a week. I might be interested in getting back into the city – if the right opportunity came along…

Most of my investment education came from my 3 years teaching English and Economics in China.  I had time to read widely, test things, see what worked and what didn’t.  I read voraciously, FT, ADVFN, the Economist as well as lots of books. I built trading systems / quantitative testing systems using VBA and various datasets.

In terms of formal qualifications I hold a 2:1 from Oxford in Economics and Politics, level 2 of the CFA, the IMC and a bit of the investment advice diploma.  None of them have helped me make a penny from the markets



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s