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Important Investing Lessons From The Expert

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Important Investing Lessons From The Expert

You’ve probably heard of George Soros, the investment magnate and one of the world’s most famous investors.

Within investment circles, his co-founder of the Quantum Fund, Jim Rogers, is equally respected and renowned.

Many see him as a legendary figure.

Read on for lessons from the man himself.

Why listen to Jim?

Well, in case you don’t know who he is, here is a little about him:

  • Earned his loyal investors returns of a staggering 4,200% over his last ten years as an investment manager (he retired in 1980)
  • As mentioned before, he co-founded the Quantum Funds, founded in 1973 and which grew to be one of the most successful funds ever: based in the Cayman Islands and Curacao
  • He is also renowned for his books that appeal to audiences outside of finance, for their humor and interest stories (he has traveled extensively since retiring from finance)

One of his books, Adventure Capitalist, was written after clocking up 150,000 miles driving around the world.

In it are many valuable lessons.

If a stock is right, hold it forever

Rogers believes that buying things and holding them forever is a good method.

The success he has had in investing has typically come from very cheap and undervalued stocks.

The silver lining of buying cheap is that you won’t lose much, even if your bets are wrongly placed.

They are low risk and have a high return potential.

The graph below shows the responses received from holding stocks over time, compared with other investment targets:

jim-rogers-1

Having said this, buying cheap on its own isn’t enough.

If this were true, investing would be easy.

You need to buy cheap, but also buy in something in which you see improvements on the horizon.

Something that will become common knowledge in the next few years or decades, but that you latched on to before anyone else.

That is the key to successful long-term investing.

Seeing trends like the rise of middle-man platforms like airBnb or Uber, or earlier things like the rise of DVD and the fall of Betamax; having enough wisdom to know what major shifts will occur in the next few years, and having the guts to stand by your predictions.

Luck probably helps too, but the best investors have proven themselves adept in forecasting trends.

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[ms_featurebox style=”4″ title_font_size=”18″ title_color=”#2b2b2b” icon_circle=”no” icon_size=”46″ title=”Recommended Link” icon=”” alignment=”left” icon_animation_type=”” icon_color=”” icon_background_color=”” icon_border_color=”” icon_border_width=”0″ flip_icon=”none” spinning_icon=”no” icon_image=”” icon_image_width=”0″ icon_image_height=”” link_url=”https://offers.thecapitalist.com/p/58-billion-stock-steal/index” link_target=”_blank” link_text=”Click Here To Find Out What It Is…” link_color=”#4885bf” content_color=”” content_box_background_color=”” class=”” id=””]This one stock is quietly earning 100s of percent in the gold bull market. It’s already up 294% [/ms_featurebox]

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Things aren’t always this straightforward though

Prices are relative.

The same price may be expensive for one stock and cheap for another.

Stocks are more elusive and ambiguous if you don’t know your stuff, and you can get caught out by looking at price alone.

For example, a share that trades for $100 could be cheap for what it is, and similarly, something trading for a few dollars per share could be expensive depending on what it is.

What needs to be looked at is a stock valuation, measured in either price to book, or price to earnings ratios.

A low price to earnings ratio (P/E) compared to other stocks in its sector or the historical levels recorded would be considered cheap.

And you also have to think about the reasons why a stock might be cheap.

Research and industry knowledge are critical here. Things to consider include:

  • Where the company is facing management problems, be it interpersonal or structural
  • It could have invested capital disastrously and could be seeing evil returns, or just seeing a general low return on assets
  • The sector the company is in: if it is a declining industry doesn’t be surprised to see low stock valuations with no bright future for growth

These issues can lead to a situation which investors call a ‘value trap.

It is when a stock appears like a good deal because of its comparatively low price, but once bought the investor realizes they been sold a pup.

However, at the same time, a value trap can turn into a golden egg.

For each of the problems mentioned, there could be a silver lining, such as (respectively):

  • Improved management thanks to individual ability, which is hard to predict: venture capitalists are renowned for their capacity to assess individual aptitude and character, as such assessments are integral to success
  • The capital could see a turnaround thanks to favorable tax changes, reduced regulation, increases in value of certain assets due to outside factors
  • The industry could pick up again: some manufacturers to see strong, sharp recent growth after decades of decline are the vinyl industry and artisan breweries

jim-rogers-2

The graph shows how it the industry has gone from virtually a flat-lining to a pickup in recent years (though still far from its dominance in the seventies).

Sometimes you just have to do nothing

Though knowing when this is the case is the key to being a successful investor.

Being too energetic and eager is a sure way to lose money.

Rogers says that the active investor normally does nothing until they see opportunities spring up.

If money is lying there, of course, you go and pick it up.

But don’t buy the treasure chest to find it empty inside.

Of course these opportunities come along few and far between, and so the key is seizing them when they present themselves.

But even so, you stick to the first piece of advice, which was buy cheap and when you predict positive change on the horizon.

The important thing that you need to remember is the advantage you have from your position.

As an individual investor, you are not constrained by time, targets or client demands.

Short-term performance can be disregarded for the long-term objective, whereas a portfolio or fund manager belonging to multiple clients will not have this luxury.

Final Word

Remember that every investment has an opportunity cost.

Don’t sell hastily if you don’t see short term gain from a cheap stock.

Relax in the luxury of time that has been afforded you as an independent investor.

Keep capital available for those moments when opportunities present themselves to you.

Have some leeway to move towards the money lying in the corner, if you will.

The advice from Rogers has led to his legendary status among investors and rightly so.

Following these pieces of advice should help you move forward in the investment industry.

 

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Business

RetailMeNot’s Five to Buy in February

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RetailMeNot's Five to Buy in February
Image via Shutterstock

The wintry temps may make you cold, but February deals are sure to warm your heart. It’s not only a great time to shower your valentine with roses and gifts, but it’s a great time to make other smart and timely purchases as well.

The shopping and trends expert for RetailMeNot, Sara Skirboll, agrees. “With the biggest football game of the year, Valentine’s Day and Presidents Day on the horizon, retailers will offer tremendous savings on a variety of categories — from TVs and TV dinners to all of your Valentine’s Day needs.

1. Play Cupid

With Valentine’s Day this month, shoppers might be struggling to find the right present that symbolizes their love. You can never go wrong with a customized gift made especially for them. This month, shoppers looking to go the extra mile for their loved one will save an average of 40% on items like personalized photo albums, picture frames, wall art and more. You name it, they make it — and just because it’s customized doesn’t mean it will break the bank. Turn to retailers like Shutterfly who is offering a RetailMeNot exclusive for 28% off your regular priced purchase.

2. Ding-Dong Deals

While some might make dinner reservations at the fanciest restaurant in town, many will opt to eat at home. Those who do can take advantage of special promotions and discounts. In fact, diners can save an average of 30% off all month long, so be sure to search the food delivery deals from RetailMeNot. Right now, DoorDash is offering 25% off your first purchase and Postmates is offering $15 delivery credit for existing users.

3. Flower Power

Everything’s coming up roses! According to a recent RetailMeNot survey, 46% of shoppers plan to buy flowers for Valentine’s Day this year, up from 34% in 2019. Many florists will be offering promotions and discounts to help shoppers prepare for the holiday. This year, retailers like 1800Flowers are having up to 40% off flowers & gifts and FTD is offering a RetailMeNot exclusive offer for 20% off sitewide.

4. Get Your Game On

Attention sports fans: Discounts on electronics are not strictly reserved for Black Friday! In fact, February is the second-cheapest time of year to buy a new TV. With the big game right around the corner and March Madness close behind, manufacturers will use those big-time events to highlight big savings on big-screen sets. Another reason for the markdowns is that new models will be released next month, so retailers will be looking to make room for new inventory. Shoppers in the market for a new TV should head to Samsung where they can get 10% cash back with RetailMeNot, and Best Buy where they can find up to 64% off clearance items.

5. Meet Your (Price) Match

Life can easily get in the way of finding “the one,” but online dating sites and convenient mobile apps are here to help. Those looking for love are in luck: Dating sites can offer up to 75% off enrollment fees to encourage singles to put themselves out there. Dating sites like eHarmony are offering 35% off all subscriptions and OkCupid is offering free membership.

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Arts

Shutterstock Announced as Official Photographer of the 2020 EE British Academy Film Awards

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shutterstock 2020 EE British Academy Film Awards
Shutterstock Announced as Official Photographer of the 2020 EE British Academy Film Awards (Photo: PR Newswire)

Shutterstock, Inc., a leading global technology company offering a creative platform for high-quality content, tools and services, today announced that it has been renewed as the official photographer of the 2020 EE British Academy Film Awards, which recognizes the very best in film over the past year. As the official photographer of the show on Sunday, February 2nd, Shutterstock’s on-site entertainment photographers, editors and engineering team will deliver exclusive high-quality images from the event at the Royal Albert Hall in London to the world in less than one minute from the image being taken.

Shutterstock’s editorial team captures, edits and distributes celebrity portraits and candid images leveraging proprietary software optimized for speed to market. As the moments from the red carpet, inside the awards show, and at the after-parties are captured, Shutterstock’s team makes lightning-fast crops and edits and transmits them directly to the desks of photo editors, writers and media. This speed-to-market empowers Shutterstock’s editorial customers to keep up with today’s fast news cycle to quickly deliver their news stories.

“We are pleased to continue our long-standing relationship with BAFTA, an arts charity whose purpose of celebrating and supporting the best work and talent in film, games and television is closely aligned with Shutterstock’s,” said Candice Murray, Vice President of Editorial at Shutterstock. “As a company whose passion is rooted in creativity, it is always an honor to be selected to shoot and share these unique moments recognizing the industry’s top creatives from around the world at the BAFTAs.”

“Shutterstock is best equipped to provide the world’s media with high-quality images of our awards ceremonies and year-round program through their advanced creative platform,” said Claire Rees, Photography Director for British Academy of Film and Television Arts. “Our partnership has grown over the years and as Shutterstock’s technology and service continue to evolve, we continue to see greater results in amplifying the mission of BAFTA around the world.”

Shutterstock’s annual partnership with BAFTA, a world-leading independent arts charity, originated in 2013 and includes editorial photography coverage of the Television Craft Awards, Games Awards, Television Awards, Young Game Designers Competition, Scotland Awards, Cymru Awards and Children’s Awards.

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Business

Amazon Profits Surge as Investment in Faster Shipping Pays Off

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Amazon Profits Surge as Investment in Faster Shipping Pays Off
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By Dominic Rushe

Amazon’s massive investment in faster shipping paid off for the tech company over the Christmas holidays with record sales and four times as many customers taking advantage of its free one-day shipping offer over the shopping season compared with last year.

Amazon is spending billions making one-day shipping the default for its Prime members and the gamble helped drive its revenues up over $87bn for the final quarter of 2019, or $29bn a month, compared with $72.4bn in the fourth quarter of 2018.

Profits increased to $3.3bn in the fourth quarter, up from $3bn in the same period last year, after a fall of 25% from July to September due to its costly shipping investments. Amazon’s shares shot up over 10% in after-hours trading.

“We’ve made Prime delivery faster – the number of items delivered to US customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year,” said Jeff Bezos, Amazon founder and CEO.

Amazon’s bumper Christmas – the best in its history – came as other retailers including Target, Macy’s and JC Penney have reported lower sales.

Amazon Web Services (AWS), its cloud computing business, reported revenues of $9.9bn for the quarter, up 34% from the year-ago period.

Amazon also gave an update on its number of Prime subscribers, who pay an annual fee for faster shipping and access to free content on its streaming media services. Bezos said the company now has over 150 million paid Prime members around the world, up from 100 million last April.

Amazon’s share price has lagged its tech giant peers in recent months as investors have worried about its spending. The latest results push the company back into the exclusive club of tech companies now valued at over $1tn including Apple, Alphabet and Microsoft.

Copyright © 2020 theguardian.com. All rights reserved.

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