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Investing Habits


rukawa
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I am trying to develop a set of regular investing habits. I was wondering what habits people on here have. What screens do you regularly screen for? What newspapers, magazine do you regularly read? What do you look at daily, monthly, weekly (Valueline, screens etc).

 

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If you subscribe to ValueLine, I recommend reading the Ratings and Reports section cover to cover, as much as you can, every week.  This will help you get a lay of the land.  If you can do this, maybe while writing an aggressive (read: a heavy discount to what you think the intrinsic value is) "buy" price for every company in the margins as you read about them, I think you'll become familiar with a lot of industries, and a lot of companies, very fast.

 

And if you do ever see a company that's at your agressive "buy" price, dig in!  If you can read 10 years of 10-Ks for the company, and the 10-Ks of its competitors, and then decide if you want to invest, I think you will do well. :)

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Guest deepValue

Set up email alerts at WhaleWisdom.com for hedge funds you want to follow.

 

If you want to use Value Line, just go through your local library to get it free.

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I do what west recommends as I subscribe to the print edition and review every week.  I also develop industry valuation sheets for the industries I follow.  See Ask Packer thread for more details.  I also re-read the classics the Intelligent Investor and The Most Important Thing by Marks and review the Investment Ideas section on this board, it is a great source for ideas.

 

Packer

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I periodically go through value line. I get a 3 month subscription about once a year. I note down companies that seem to have good operating results over long periods and cyclicals that probably would be available purchase at deep discounts during the inevitable downturns.

 

One thing I found helpful is to actually write out a short investment thesis for every businesses you are interested in, even though it might not be worth buying at this time. Set a price target 3 years out (one each for pessimistic case, baseline case, and optimistic case) and lay out your expectations for the 2-3 core drivers. I think three years out is a reasonable time for the market to recognize a company's value and this would give you good feedback on your investment process.

 

Also an Investment diary that captures your thought process behind each trade - not just a particular businesses but the days that you actually bought and what you are thinking in real time as you make the trade. 

 

Vinod

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Does anybody use CapitalIQ? Anyone have regular screens they run like NCAV? Stocks which have new lows? Large share buybacks?

 

The idea of going through Valueline is appealing to me but I was also thinking with augmenting this with some screens.

 

@West: I thnk the idea of  writing down aggressive buy price is a wonderful idea. Thanks.

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I read valueline every week (print version), scan new lows list and read a cople of papers per day. About once a month i do some simple screens to look for distressed areas of the market. Low p/E, low P/b, etc... I try to value at least one or two companies a week.

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I have a few other tricks I use as well..

 

Always the coy one  :P

 

There is a lot of money to be made in the inefficient news flow of unlisted and tiny companies.  I'd hate to blast that stuff out on the public internet where anyone can find it through a Google search.  I'm willing to divulge in a PM or an email.  I have no problems sharing secrets, but some should be held tighter than others.

 

I'll say that digging around for about an hour on OTCMarkets and anyone should be able to figure out some of the searches I do.

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Does anybody use CapitalIQ? Anyone have regular screens they run like NCAV? Stocks which have new lows? Large share buybacks?

 

The idea of going through Valueline is appealing to me but I was also thinking with augmenting this with some screens.

 

@West: I thnk the idea of  writing down aggressive buy price is a wonderful idea. Thanks.

 

I'm using my buddies access to CapitalIQ to do a bunch of screens based on ROE, insider ownership and growth earnings as well as share buybacks

 

Ill probably jump to value line once his access disappears as a result of getting it for his MBA

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Newspapers: FT, WSJ, op-ed and bus sections of NYT and WPOST

Periodicals: Economist, Value Investor Insight, Hedge Fund Wisdom (very mediocre but decent source of info)

Blogs: corner, pragcap, big picture, short side of long

Other: Off Wall Street - great source of deeper industry analysis

 

On top of company filings, presentations, transcripts and available sell side notes, the above provides more than enough daily reading and a steady stream of ideas.

 

I personally do not find much use in large screens - I haven't figured out how to narrow down a list of 50 "low-pe" stocks especially when I don't want to own more than 10. Not too difficult to figure out what the most hated sectors and stocks are just reading the paper and following financial sites such as Bloomberg and CNBC.

 

 

Somewhat related side note - I just finished reading the Forbes article on Icahn from this week. Awesome depiction of how he does business - much like Buffett he never leaves his office and does a lot of work via the phone. With his Dell investment - according to the article he saw the headline that Michael Dell was taking it over and figured the stock must be cheap since Mike was putting so much equity into the deal and decided to put $1B into the company. I love it!!  He is a brilliant guy, but he puts his pants on no differently than the rest of us - guarantee you be did not put in a tenth of the work Ackman did on HLF, but decided that such extreme action such as shutting down HLF entirely doesn't happen very often and that the stock is extremely cheap. Same thing with Dell - guaranteed be doesn't know the ins and outs of the future of the IT business....it's a cheap frickin stock with limited downside and he can put a lot of money to work.

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Just a related question, do you guys all keep up this hunt for value daily/weekly? I've evolved a style so far that's a little different.

 

At times I find that I'm either fully invested (or near enough fully invested) and/or I have around the number of positions that I'm comfortable with. In these situations where I wouldn't be able to go out and buy shares right away, I tend not to go looking for new things.

 

I do have an established watch list of companies that I may feel comfortable digging deeper into, if the price were lower and/or I had more dry powder, but I don't go into detailed research until that time comes.

 

Just my two cents (rounded down now to zero cents in Canada).

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I have the basic subscription.  I subscribed to the others but found limited usefulness as I could find more data from other sources (i.e. Morningstar).  The other source I purchase is Morningstar.

 

Packer

 

Packer,  what do you purchase from M*?  Website access or ?

 

Thanks in advance

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it seems like these resources are worthwhile:

 

barron's, forbes, fortune, value line, morningstar

 

any of the buffett-related blogs - buffetfaq etc.

 

i shut down premium cable - found myself watching too much espn and cnbc didn't prove too fruitful.  that said, i turn on sirius in the car if buffett or tepper is speaking.

 

 

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