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How to Pick Quality Shares

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OLTB
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How to Pick Quality Shares

#310062

Postby OLTB » May 19th, 2020, 7:15 pm

Evening all.

I have just ordered the above book by Phil Oakley in an attempt to improve my share picking. I need to stop trying for the quick returns in the small caps market and go for quality. It will arrive in a couple of weeks (Amazon is out of stock).

If anyone has read it and is willing to offer comments, that would be appreciated.

Cheers, OLTB.

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Re: How to Pick Quality Shares

#310663

Postby 1nvest » May 21st, 2020, 2:00 pm

Picking your own stocks is the opinion that you can better the 'Index' returns, where the mathematical manner of how that index is managed has evolved over time to/towards the best method. IIRC that betters 80% of other methods.

The way the broader Index tends to rise is as a result of one/few exceptionally good performing stocks that uplifts the overall average. Not so much a case of a room of 10 people, one 5' tall, eight 6' and one 7' ... yielding a overall average of 6' such that most match that average, but more a case of one 5', eight 6' and one 12' that yields a 6'6" average such that nearly all fall below that 'average'.

More often the few exceptional good/great stocks are surprising - unpredictable.

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Re: How to Pick Quality Shares

#310689

Postby jackdaww » May 21st, 2020, 3:34 pm

it may be more a matter of simply AVOIDING dud shares .

:)

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Re: How to Pick Quality Shares

#310692

Postby doug2500 » May 21st, 2020, 3:43 pm

I've not read it, but as you like books one of my recommendations would be 'The most important thing' by Howard Marks.

OLTB
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Re: How to Pick Quality Shares

#310920

Postby OLTB » May 22nd, 2020, 10:34 am

doug2500 wrote:I've not read it, but as you like books one of my recommendations would be 'The most important thing' by Howard Marks.


Thanks doug2500 - I will order that as well as I do subscribe to the memo from Oaktree Capital.

Cheers, OLTB.

OLTB
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Re: How to Pick Quality Shares

#310924

Postby OLTB » May 22nd, 2020, 10:39 am

1nvest wrote:Picking your own stocks is the opinion that you can better the 'Index' returns, where the mathematical manner of how that index is managed has evolved over time to/towards the best method. IIRC that betters 80% of other methods.

The way the broader Index tends to rise is as a result of one/few exceptionally good performing stocks that uplifts the overall average. Not so much a case of a room of 10 people, one 5' tall, eight 6' and one 7' ... yielding a overall average of 6' such that most match that average, but more a case of one 5', eight 6' and one 12' that yields a 6'6" average such that nearly all fall below that 'average'.

More often the few exceptional good/great stocks are surprising - unpredictable.


Thanks 1nvest - I have a rough third of my pension in index funds, a third in ITs and third in HYP - the small cap stuff is some 'play' money that was a small percentage, but I have somehow contributed more over the last few years thinking I could do better. Evidently not and I know why - it's my own fault for not putting in the hours with research. Hopefully, this book that explains how to read the annual reports will, along with some robust discussions here, will make my choices more successful. I'll be staying away from AIM from now on, that's for sure.

Cheers, OLTB.

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Re: How to Pick Quality Shares

#311514

Postby monabri » May 23rd, 2020, 5:28 pm

https://books.google.co.uk/books/about/ ... edir_esc=y


Sample of 47 pages to see if you like the style.

Just found this on YT..not listened to it ( annoying background muzak :roll: )
https://youtu.be/2gc15Ycb_rw

I guess that by having a clue what is good, then one can avoid the dogs masquerading as stars?

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Re: How to Pick Quality Shares

#311523

Postby monabri » May 23rd, 2020, 5:38 pm

OLTB wrote:Evening all.

I have just ordered the above book by Phil Oakley in an attempt to improve my share picking. I need to stop trying for the quick returns in the small caps market and go for quality. It will arrive in a couple of weeks (Amazon is out of stock).

If anyone has read it and is willing to offer comments, that would be appreciated.

Cheers, OLTB.


..£ 16.78 ( you could cancel the Amazon order).
https://www.ebay.co.uk/itm/How-to-Pick- ... ect=mobile

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Re: How to Pick Quality Shares

#311529

Postby scrumpyjack » May 23rd, 2020, 5:46 pm

I'm sceptical that a couple of books are going to enable the average PI to beat the market consistently.

I gather tests have shown that a monkey throwing darts at the FT does better than the average active manager, and they are supposedly the professional experts (the active managers not the monkeys, or perhaps it's the other way round?)

OLTB
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Re: How to Pick Quality Shares

#311552

Postby OLTB » May 23rd, 2020, 6:29 pm

scrumpyjack wrote:I'm sceptical that a couple of books are going to enable the average PI to beat the market consistently.

I gather tests have shown that a monkey throwing darts at the FT does better than the average active manager, and they are supposedly the professional experts (the active managers not the monkeys, or perhaps it's the other way round?)


Thanks scrumpyjack and given my past experience, I can pretty much guarantee that I won't best the market consistently! The vast majority of my pension funds are in both passives and ITs - this book is for my far smaller ISA savings. The vast majority of my ISA savings are in Scottish Mortgage (SMT), but I do like to dabble. However, this dabbling has resulted in bad choices so I just want to scratch the itch, try and make some money (instead of losing it) and also learn some new skills.

Cheers, OLTB.

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Re: How to Pick Quality Shares

#312326

Postby Charlottesquare » May 26th, 2020, 1:23 pm

OLTB wrote:
scrumpyjack wrote:I'm sceptical that a couple of books are going to enable the average PI to beat the market consistently.

I gather tests have shown that a monkey throwing darts at the FT does better than the average active manager, and they are supposedly the professional experts (the active managers not the monkeys, or perhaps it's the other way round?)


Thanks scrumpyjack and given my past experience, I can pretty much guarantee that I won't best the market consistently! The vast majority of my pension funds are in both passives and ITs - this book is for my far smaller ISA savings. The vast majority of my ISA savings are in Scottish Mortgage (SMT), but I do like to dabble. However, this dabbling has resulted in bad choices so I just want to scratch the itch, try and make some money (instead of losing it) and also learn some new skills.

Cheers, OLTB.


Apart from selecting the correct shares one needs to hold them for the correct time, whilst a lot of selection issues can be sorted by reading accounts the timing issues still tend to subsist.

For instance I had a chunk of Braemar Shipping, I was down over 40% so decided to partly cut my losses and sold half on 30.4.20 at a loss, today they have jumped back up 26%; whilst I exhibited a poor first choice buying them (though seems to be more Covid than Company) I exhibited a second poor choice selling when I did.

Personally I usually find getting timing right more difficult than buying the wrong shares, I tended to buy right dogs when I was younger, age and experience has reduced their number but has done nothing for my ability to time purchases and sales (and accountancy is how I earn my living)

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Re: How to Pick Quality Shares

#312337

Postby scrumpyjack » May 26th, 2020, 2:17 pm

Charlottesquare wrote:
OLTB wrote:
scrumpyjack wrote:I'm sceptical that a couple of books are going to enable the average PI to beat the market consistently.

I gather tests have shown that a monkey throwing darts at the FT does better than the average active manager, and they are supposedly the professional experts (the active managers not the monkeys, or perhaps it's the other way round?)


Thanks scrumpyjack and given my past experience, I can pretty much guarantee that I won't best the market consistently! The vast majority of my pension funds are in both passives and ITs - this book is for my far smaller ISA savings. The vast majority of my ISA savings are in Scottish Mortgage (SMT), but I do like to dabble. However, this dabbling has resulted in bad choices so I just want to scratch the itch, try and make some money (instead of losing it) and also learn some new skills.

Cheers, OLTB.


Apart from selecting the correct shares one needs to hold them for the correct time, whilst a lot of selection issues can be sorted by reading accounts the timing issues still tend to subsist.

For instance I had a chunk of Braemar Shipping, I was down over 40% so decided to partly cut my losses and sold half on 30.4.20 at a loss, today they have jumped back up 26%; whilst I exhibited a poor first choice buying them (though seems to be more Covid than Company) I exhibited a second poor choice selling when I did.

Personally I usually find getting timing right more difficult than buying the wrong shares, I tended to buy right dogs when I was younger, age and experience has reduced their number but has done nothing for my ability to time purchases and sales (and accountancy is how I earn my living)


Yes timing is vital but less important the longer you hold the share. I hardly ever sell. I too made some serious errors in my younger days (and older ones too!) but at least you can't lose more than 100% of your investment whilst the real winners can multiply many times. As I get older I go far more for investment trusts and ETF trackers. Fortunately my largest IT by far is SMT, having never taken a profit on it but just let it be.

I too was an FCA


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