“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett “The desirability of a business with outstanding economic characteristics can be ruined by the price you pay for it. The opposite is not true.” – Charlie Munger The quote from Warren Buffett above is often cited […]
A great year for modified magic formula investing
A year ago I started a trial of three model portfolios based on Joel Greenblatt’s magic formula approach (click here to read more about this). I wanted to see how this strategy would work in the real world and with all investing costs taken into account as many studies of investment strategies ignore costs. The portfolios are […]
What is investing?
Why do people invest their money rather than just save? It’s not just about growing your savings so that you will have more money in the future. It’s about growing the buying power of your money. You want the £1 that you are investing today to buy more things in the future than it does […]
A brief guide to tax-efficient saving
Tax-efficient savings accounts (ISAs) and self-invested personal pensions (SIPPs) are the best option for most savers and investors. Here’s what you need to know. Savings Individual savings accounts (ISAs) are tax-free savings accounts. That is, you are not liable to pay capital gains tax (CGT) on the profits you make on this money. You can […]
Choosing your first investments
For some people the thought of picking their own shares can be a little bit daunting. Rest assured, it doesn’t have to be. Whilst it is best to do at least a little bit of homework before you part with your hard earned cash, successful investing does not require a high IQ or lots of […]
Investing in funds, investment trusts and ETFs
Many investors like to build a portfolio of individual shares and even bonds but for some investors, investment funds can be a useful alternative. For example, some investors may want to have a degree of control over their investments but don’t wish to dedicate the time to choosing and managing a lot off individual investments. […]
Investing your portfolio for retirement income
From what I can see we are still firmly in a bull market in shares. Momentum remains a strategy that is paying off handsomely with a select group of companies continuing to see their share prices increase faster than their profits. But this will not go on forever. Shares with stretched valuations have little downside […]
Chapter 1: You can be a Stock Market Analyst
Updated: August 2024 If you are reading this, the chances are that you’ve decided to take control of your investments or are doing so already. You may have been investing for some time but feel you could do better. Many of you may be new to investing, or have previously left the management of your […]
Chapter 2: Balance sheets
Updated: August 2024 ShareScope is packed full of useful financial data. This data holds the key to understanding the financial health and value of any company you are looking at. To a new or inexperienced investor, the mass of numbers may seem a little daunting. That’s quite understandable but it shouldn’t be. If you understand […]
Chapter 3: Analysing balance sheets
Updated: August 2024 In the previous chapter, we looked at how a balance sheet was put together and the numbers that go into it. In this chapter, we are going to take all those numbers from the balance sheet and turn it into useful information for investors. A company’s balance sheet contains a wealth of […]
Chapter 4: Income statements
Updated: August 2024 Hopefully, you will now understand balance sheets and how important and useful they are. Let’s move on to a set of numbers which most people think are even more important – profits. Just as we did with balance sheets, I am going to explain the numbers in an income statement in this […]
Chapter 5: Analysing income statements
Updated: August 2024 Now that we’ve dealt with the basic format of an income statement it’s time to move on and show you how ShareScope turns those numbers into really useful information. Knowing your way around an income statement is vital to understanding what makes a company tick. However, to get the most out of […]
Chapter 6: The cash flow statement
Updated: August 2024 The last four chapters have been spent looking at the balance sheet and income statement and how to use them. In this chapter, we will move on to arguably the most revealing piece of financial information that a company gives investors – its cash flow statement. When a company’s financial results are […]
Chapter 7: Analysing cash flow statements
Updated: August 2024 We did a little bit of cash flow analysis in the last chapter. In this one, we look at the cash flow ratios that ShareScope calculates for you and what they can tell you about a company’s financial performance. The key issues that this chapter will point out are: Cash flow is […]
Chapter 8: Is this a good business?
Updated: August 2024 In this chapter, we look at ways to measure how good a company is at generating profits from the resources at its disposal. We will be looking at what the company is getting back in profits as a percentage of the money it has invested. This is the real measure of how […]
Chapter 9: Share valuations
Updated: August 2024 In the previous chapter, we looked at how to find out if a company was any good or not. In a nutshell, good companies get back a lot of profit or cash flow as a percentage of the money they invest – they earn high financial returns. How to tell when shares […]
Chapter 10: Value investing
Updated: August 2024 In the next three chapters we are going to be looking at three different styles of investing, starting with Value investing. The previous chapters have hopefully shown you how useful ShareScope can be when you are sifting through the finances of a company. Information that might have taken you hours or even […]
Chapter 11: Dividend investing
Updated: August 2024 If you are watching or listening to the news at the end of the day you will usually be told what happened to the stock market that day. More precisely, you will be told whether it went up or down in price. Yet investing in shares is not just about changes in […]
Chapter 12: Growth investing
Updated: August 2024 The last couple of chapters have focused on two particular styles of investing – value investing and dividend investing. Both these approaches to owning shares are largely based on the current state of a company – its profits and its dividends. In this chapter, we are going to turn our attention to […]
Chapter 13: Investing in bonds
Updated: August 2024 Despite its name, ShareScope is not just all about shares. It can help you with other investments as well. In this chapter, I’m going to show you how you can use the information available to invest in bonds.. What are bonds Bonds are IOUs. Just like shares you can buy bonds on […]
Chapter 14: Putting it all together
Updated: August 2024 In this final chapter, I use the data and tools in ShareScope to show you how I analyse shares. Even if you are not a subscriber, you should find this article extremely useful as a guide to making informed investment decisions. One of the main selling pitches of the fund management industry […]
