# Unorthodox investing styles.



## Spidey (May 11, 2009)

I always like to hear from people who think outside the box and utilize different strategies than the typical balanced approach. For example, I find Rickson's strategy of concentrating almost entirely on solid balance sheets and investing almost entirely in one sector while for the most part ignoring big picture prognostications (eg. concern about currency differences, inflation, economic trends, industry trends, etc.) to be intriguing. (I think I've summed up his strategy, he can elaborate if I've misrepresented it.) I also heard on another forum a lady who planned to invest her entire portfolio (I believe of about $200,000) in 5 emerging market ETFs covering a range of countries from Israel to China. Her strategy was to leave the portfolio for about 25 years and emerge as a millionaire. Of course, she was mostly lambasted by other posters, but I found her strategy to be gusty and probably a reasonably good bet over that length of time.

So do any of you have what you consider to be a unique investing style that you could elaborate on? Or have you heard of unique investing styles that have intrigued you?


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## furgy (Apr 20, 2009)

I've switched to 100% Canadian REITs , which is working out VERY well so far for me.

With most income funds facing conversion and potentially smaller payouts , bonds not paying as well as they used to , GICs etc. , paying virtually nothing , I feel that investors seeking bigger returns will be flocking to REITs big time.

So far the rise in most REIT unit prices , as well as the number of new issues and IPOs in the REIT sector lately , would indicate I'm not the only one who feels that way.

Going by past experience I find that the so called "rule of diversification" , while it does tend to lower risk somewhat , only brings about mediocre gains , unless one gets lucky.

It's just my opinion , but is so far is paying me very well for the risk involved , for instance , if you had bought Retrocom REIT as I did , when at all time lows (march 09) , you would now be getting almost 35% return on investment , that is one of the better ones , but others are paying extremely well also.

This may seem risky to many others , But I feel I am being fairly compensated for that risk , up almost 30% in the last 6 months or so with a 15% average return , I'm sticking with this approach until I see some flaw in it , or the general market heading in some other direction.

I also fully expect payouts to increase as unit prices go up and the markets return to something closer to "normal".


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## Berubeland (Sep 6, 2009)

I am solely invested in warrants on the TSX. 

There are about 139 warrants and I figured it would pretty easy to get to know this little corner of the stock world. 

The biggest buyer of warrants are the banks. They buy in large quantities. So you can make money just because of volume periodically. 

You can also look for warrants trading under par like this one here. 

http://www.newswire.ca/en/releases/archive/October2009/06/c4508.html

TORONTO, Oct. 6 /CNW/ - Middlefield Group, on behalf of Pathfinder Convertible Debenture Fund ("Pathfinder" or the "Fund"), is pleased to announce that it has filed a preliminary prospectus in relation to the initial public offering of Combined Units at a price of $12.00 per Combined Unit. Each Combined Unit consists of one Unit of the Fund and one Unit purchase Warrant. Each Warrant entitles the holder to purchase one Unit at a subscription price of $12.00 on or before 5:00 p.m. (Toronto time) on November 30, 2010 (the "Expiry Time"). Warrants not exercised by the Expiry Time will be void and of no value.

PCD.UN-T is trading at $12.16
PCD.WT-T is trading at $0.15

So basically you make one cent just for buying it and plus there is a premium on the warrant. 

Now I'm not sure why this is but it takes a while for the different brokerages have a lag between the time the warrant is listed and trades on all the different brokers. Now I can buy this one on Questrade but on Itrade it doesn't show up yet as a security. 

I also buy warrants at .005 and wait for them to trade at .01 and double my money. 

Since August when I started learning about warrants I have doubled what I initially put into the market over the last 3 years. But I had previously lost 2/3 of my initial investment. So since August I am up around 600%. I started with very little capital thought. So I am looking forward to doing it some more. 

Warrant because of the low cost and low volume lend themselves to many small investments. Sometimes I wait for months for a trade and another several months for a sale. I keep the amount of capital involved in every trade small so if I have losses I can minimize them. I also learned not to buy warrants with a close expiry date. I lost $300 buying warrants that expired.

So warrants have been good to me they paid for Christmas this year. The process of trading warrants can be a little like watching paint dry thought I have to wait on the buyer's side and on the seller's side to trade sometimes. The attribute most required for trading warrants is patience.


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## humble_pie (Jun 7, 2009)

the pro approach would be to buy the warrant, exercise wt & sell the shares, all within 2 minutes.

without looking this up at all, and without knowing one iota about the stock, my guess is that there's no volume in the underlying, so it's impossible to sell the shares in the quantity that would be necessary to make real money on the in/out deal. (If the gain is only one penny per share, you'd need 100,000 sh to even earn $1000, and this nebbishy stk probbly doesn't trade 100,000 sh in a month.)

that's why the pros don't work this deal. They know stk won't move. Stk could drop. This would put wt out of the money.

i wouldn't follow your approach, because i have other approaches up my sleeve, but it has a wonderful appeal. Folkloric. Rakish. Robin Hood lurking in the forest for the big banks to come riding by. You do realize, i hope, that you are functioning as the arbitrageur, and a self-taught one at that. Châpeaux. Hats off to you.


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## osc (Oct 17, 2009)

My investments are divided in two. One is a classic balanced portfolio and one is basically gambling in the futures market. I designed the gambling part to potentially produce very high returns. The downside is that it also has the potential to lose all money. I am planning to constantly balance my investments between the two. 
Last year I made the normal 25% with the balanced portfolio and 500% with the gambling part. At the start of this year I moved a substantial portion from the gambling part to the balanced portfolio. I expect the balanced portfolio return for this year to be 5%-15% and the gambling one -90% to 300%.


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## ssimps (Dec 8, 2009)

osc said:


> My investments are divided in two. One is a classic balanced portfolio and one is basically gambling in the futures market. I designed the gambling part to potentially produce very high returns. The downside is that it also has the potential to lose all money. I am planning to constantly balance my investments between the two.
> Last year I made the normal 25% with the balanced portfolio and 500% with the gambling part. At the start of this year I moved a substantial portion from the gambling part to the balanced portfolio. I expect the balanced portfolio return for this year to be 5%-15% and the gambling one -90% to 300%.


Great gambling!

2009 was probably the year to gamble; cards stacked against the house. 20/20 hindsight says I should have gambled more myself in '09. It's always easy to say 'I should have....' though hey.

It will be interesting to see what happens for your strategy in '10 / '11, but with a 500% return it in 1 year, it may not matter much to you anyhow.


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## Oldroe (Sep 18, 2009)

I went all in in div. stock inside and outside of rrsp from Oct 08 to March 09. Then bought a couple growth stocks.

My wife pension is look after.


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## Berubeland (Sep 6, 2009)

Thanks humble pie. 

I am more than happy to pick up the crumbs that the big boys leave behind. I rather like it and I find it really funny actually. I get immense satisfaction knowing that I double my money or more every time an impatient frat boy working for Goldman Sachs puts a market order in on a warrant I trade. 

Pennies add up. A lot. 

Oh and Humble Pie thanks for not falling asleep during my description of what I do to make money on the stockmarket.


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## dogcom (May 23, 2009)

The key is you found something comfortable and is working it for you berubeland and that is the key so good for you.

I like to buy and sell penny stocks that I believe have potential and are low in price compared to where they have been. I find I can get good returns with little money at risk, while most of my funds are in cash, so if they don't do well I have the cash and if they do well I get a better overall return.

Most people would call us idiots while they sell into market crashes and lose money on their great stocks. But they forget we are happy with what we own and are very aware of the risks. Of course this is not where all my money is and it is only a small portion of it. When the market gets destroyed again then I will get serious about being fully invested.


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## mutant guppie (Jan 13, 2010)

Berubeland said:


> I am solely invested in warrants on the TSX....


Thanks Berubeland. You've peaked my interest.


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## Spidey (May 11, 2009)

Compared to you other guys, I guess I'm a little boring. I stick basically with a mixed portfolio and like the general strategy laid out by William Bernstein. I do try to look for long term trends and try to imagine what an industry will look like 10 years out, rather than a year or two. This has lead me towards energy, health care, some REITs, Candian banks and pipelines. However, I always try to keep an open mind to new ideas. 

Mutant Guppy - This is your opportunity to provide your market timing strategy. (Not an attempt to trap you, I'd actually be interested in hearing about it.)


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## leslie (May 25, 2009)

Berubeland said:


> I am solely invested in warrants
> PCD.UN-T is trading at $12.16
> PCD.WT-T is trading at $0.15
> So basically you make one cent just for buying it


Although off topic something must be said to protect anyone reading that. The math here is wrong. The valuation of importance is NOT the PCD.UN. The .un will quickly become irrelevant. It is the *net asset value of the packed unit (.un plus .wt)* that is important. This is especially so when the dilution from warrants is so high - like here at 50%.

The NAV will be equal to the market value of the underlying portfolio PLUS the ( $12*units o/s ) exercise price of the warrants. Divide that by double the number of shares currently o/s because after exercise there will be twice the number of shares. 

So to re-work the example. The value of the underlying securities portfolio is actually $11.56 (per issuer). The value per diluted shares after exercise of the warrants would be:
50% weighted by the portfolio at $11.56
50% weighted by the exercise of the warrants at $12.00
-----------------------
equal average value* $11.78*. So the warrants are trading at a *premium*, not a discount of $0.37 (because their NAV is negative <$0.22>)

This is all important for the people buying the .un shares as well. 50% dilution from warrants means that the 50% of the portfolio's ups and downs will be going to the warrant holders, NOT the .un owners. Their returns will be FAR muted from the changing value of the underlying securities. See for yourself what will happen if the underlying securities increase in value by *10%* from the initial $12.00.

50% weighted by the portfolio at $13.20
50% weighted by the exercise of the warrants at $12.00
-----------------------
equal average value* $12.60*. That is only a* 5%* increase for the .un owners. The website will probably quote a NAV ($13.20) for the .un as well as a Diluted NAV ($12.60). The market is not efficient because so many retail investors don't understand this stuff. So it may be that the .un stock trades FAR above its true value (towards the $13.20). 

On some of the market data sites where the premium/discount is calculated for closed ended funds, the discount is calculated on the (wrong) NAV . It should be calculated on the Diluted NAV. The value of the warrants will always equal the difference between the NAV and Diluted NAV quoted.

I just looked at the Middlefield site. It does not disclose the Diluted NAV. Not everyone can be trusted to do the right thing. And the units are now valued below the $12.00 issue, to the OP's arguments based on market value are WAY wrong.


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## Berubeland (Sep 6, 2009)

I buy the warrant not the stock. I have never bought a warrant with the intention of exercising it. I buy it because it is an unusually good deal. 

Here is an article talking about what warrant are.
http://www.investopedia.com/articles/04/021704.asp

This website lists all warrant and values of those warrants calculated properly.

www.canadianwarrants.com

So currently the warrant I bought should be trading at 0.80. Warrants have both an intrinsic value and a time value. Intrinsic value is linked to the difference between the strike price and the market value of the stock. In this case .16. The time value is linked to the amount of time you have the right to buy the share. So a warrant that has a longer time value should be worth more than a warrant the expires next week.

I also like warrants because their value is linked to a much more stable stock than a similarly priced stock. (in this case .15) 

I do not have a buy and hold strategy, I don't care about the underlying security too much, I just take advantage of volume effects on the market and as humble pie said occasional arbitrage errors such as this one. 

I spend about an hour per day examining the prices and looking for these types of errors. There are only 130 or so warrants on the TSX so I know my section fairly well to make money.


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## DavidJD (Sep 27, 2009)

I like some gambling too. One strategy that gets criticized a lot is using a HELOC to invest. I prefer this to a Margin account. I held units that provided a 50% margin amount. I bought more of the same units on margin. The units' yield was 14% at my book-value and the margin acct was prime+one. The spread was fantastic and made for major gains.

TDW called my margin! The units were posting higher earnings, acquisitions etc. TDW decided to reduce their margin amount to 0% as they were involved in aviation. (Who saw that coming??) Otherwise a low-risk use of a margin acct. So I had to sell and repurchase on my HELOC (did not max this out so I am not going to lose my home. TDW made high fees (was below the $100K threshold for low trades at the time) and I had to buy and sell and 10-15% higher purchase prices.

However now the units have gone from a value of $11 to $13.5 and pay the same dividends (yield of 11%). I transfer the dividend into the HELOC which is also at prime+one, and I expect can be written off.

I feel very comfortable doing this - borrowing to invest - and think some people should do similar, as part of their investment strategy. Cautiously selecting what they invest in.

Anyone else surprised this is frowned upon so much more than the risks deserve?


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## ssimps (Dec 8, 2009)

DavidJD said:


> I feel very comfortable doing this - borrowing to invest - and think some people should do similar, as part of their investment strategy. Cautiously selecting what they invest in.
> 
> Anyone else surprised this is frowned upon so much more than the risks deserve?


I'm adverse to debt of any kind; only time I have had any was my first house mortgage, which I paid off ASAP. It is a comfort thing to me; perhaps I could make more $ leveraging my LOC or other leveraging techniques, but I would rather make less and be happy knowing I owe no one anything $ wise.  It is a personal preference I guess.

Now if the markets dive 50% and/or hit 10 - 12 year lows again, then I would consider (definitely would period maybe) using my LOC to invest for the first time ever, because I think the medium term risks in such a case would truely be low and yields for div. paying long track record companies would be high again. 

That is not the present though; using my LOC to buy more stock at today's prices for good quality div. yielding stocks, and with my knowledge level and / or luck for cherry picking high flyers (lack of that is), is just something I am not willing to do.

Save, then invest, if you are comfortable with it IMO.


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## mutant guppie (Jan 13, 2010)

I take a straight forward approach to most everything and don't waste alot of time on things that work too slowly or don't work at all. It's rubbed some slow people the wrong way. My apologies, but really I don't care.

I day / swing big blocks and rely heavily on mulitiple TA indicators, fundamentals for the direction of the wind. Something as simple as a broken 
trend line, macd etc are indicators that maybe it's not seeding time. Somewhere in all that noise is a picture. It's for that reason 
I made 400% in 2009. Even still I've made a number of dumb trading mistakes, and for that reason I've sought out/ found coaches
who have shown me better ways of finding/ butchering kobe cow. Now, those guys surgically carve out large juicy profits with nothing more than a butter knife, truly amazing to see them work. 

What got most people in 2008/ 2009 is blindly trusting following those institutions over a cliff ( i.e. caisse de depot). I followed my convictions and took money off the table and avoided the lemming ride. Now if more people looked out the window instead of relying on the weatherman then maybe...


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## humble_pie (Jun 7, 2009)

leslie you are so not getting this story. This is not an OCD exercise about computing-discounts-to-nav-into-the-twilight-zone.

this is a story about a resourceful woman who built a small investment income for herself in the most challenging of circumstances. She learned how to make money in the stock market with almost no capital whatsoever.

it's a grameen bank story. It's a 21st century eliza doolittle, selling lavender and warrants to rich gentleman bankers in the covent garden nook of the toronto stock exchange.

ps in my humble experience the drop in sh price tends to occur when the secondary offering-w-wts is announced, not when the warrants are exercised.


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## Spidey (May 11, 2009)

_My apologies, but really I don't care._

This is meant to be taken in the spirit of helpful advice and not as an initiative to start a debate or argument. It's better to offer no apology at all than to offer this type of apology. Relatonship skills will probably contribute much more to your happiness than financial ones.


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## mutant guppie (Jan 13, 2010)

Spidey said:


> _My apologies, but really I don't care._
> 
> *This is meant to be taken in the spirit of helpful advice*
> 
> ...


Criticism/ sarcasm/ opinion in any investment forum comes with the territory. Grow a thicker skin.


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## Spidey (May 11, 2009)

I tried . . . . You will have to find out some things on your own. Good luck to you.


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## hboy43 (May 10, 2009)

Hi:

This is to some extent a rambling missive. Tough. The only reason I am here much at all these days is that I am sick. You wouldn’t think that the virus and my immune system would be in equilibrium for 2 weeks. You’d think that I’d either be dead or cured, and you’d be wrong.

Enjoy or not.

To understand my investing style, you need to know a bit about my lifestyle. I live way under my economic means. My lifestyle would be low quartile. Over my life, I have smoked less (not at all actually), drank less, run fewer automobiles fewer km, had fewer restaurant meals, had way fewer electronic toys (main TV is 13 inches 15 or so years old) etc, etc. So if I hit age 65 bankrupt, the good people in the government are prepared to give me way more funds than I need to support my lifestyle. Having no fear of the downside means that I can run my finances riskier than the average person would otherwise.

What would my financial goals be? Well the main one would be to never again work as a paid cog in the machinery of society. My wife being a teacher, we have that pretty much covered. Even if I blew up everything, come 2021 or whatever year it is, that pension comes rolling in. My second goal would be to be that old fart that kicks the bucket at 95 and leaves millions to the hospital or something. To be living (well at that point dead) proof that everybody, and I mean everybody that lands in North America as an adult without medical issues (and of course remains medically lucky for most of his life) can be wealthy. Sort of my parting joke. I suspect my second goal is more of a longevity issue than a financial one.

Some will say, you have money, why not spend it? I do occasionally spend, but frankly modern society produces little of value. Consider that society has evolved to the point where it is no longer possible to buy a zipper that will last. Both my primary and secondary winter coats need the zippers replaced. At least one if not both of them have already had this done. It is cheaper to buy a new printer than to replace the ink cartridge - thus is highly wrong. Most of what is produced these days is garbage, figuratively, and after a year or two literally. Why do people work so hard to buy garbage? Why not save your money, go without the gizmos for 10 or 15 years, and get yourself set for life?

Consider hand planes. You have two choices if you want a satisfactory hand plane. A classic Stanley, Record etc. made over 50 or 60 years ago, or a new plane from Veritas, Lie-Nielson or other modern boutique maker. The classic will cost you a few dollars at a garage sale, (my most recent find was a wooden jointer plane for $15) flea market or auction and a half to a full days work to recondition it. Or buy from a boutique manufacturer for $200+. There are no mass produced hand planes of any value, you will need to invest the time to make it work and there will be no guarantee of success. Wait for the classic to show up or pay the money at the boutique. Otherwise you are working hard to buy garbage. Please don’t do this.

For those of you who even know what is a hand plane, you may ask, aren’t hand planes obsolete? Don’t people use jointers and planers now? Well yes they do, but some things are done faster with a hand plane, and some things are done better, and some things both. Do you need to always use the funky financial instrument with a high MER and dubious fine print, or will the common share work? A plane iron well sharpened is sharper than a razor blade. It will cut you if you are careless, but it only projects a few thousandths of an inch through the mouth of the plane. A jointer will take the ends of your fingers in a split second.

Well for those who are following, I do things differently. No FI and leverage. Oh, and I don't spend much time reading financial reports any more either. 

I tend toward Canadian high cap stocks, but have a few US high caps. I have found over the years that I tended to buy small caps that subsequently went bankrupt. Plus with a high cap that has been around for decades or centuries, no great need to read the financial reports. Smarter people than I have already done that and they have agreed on a price in the market. What value can I possibly add to that?

I like to take maximum advantage of certainties, or near certainties. For example, it is certain that FI gets taxed higher than Canadian dividends or capital gains. So I tend to own investments that provide Canadian dividends and capital gains. It is certain that a mutual fund has a MER, but holding an individual share does not, so with the exception of two mutual funds that came into the marriage with my wife, I have never held a mutual fund. It is a certainty that a Canadian dividend is taxed better than a foreign dividend, so I tend to hold Canadian dividend paying stocks. The few US stocks tend to wander into the RRSP.

The long term return on stocks is about 8%, so if I can borrow funds at substantially under that, then leverage is accreditive in the long run, reasonably certain.

The downside of the above is that my ride is wild and I may crash. That is fine, I don't really care about the path to financial success, only getting there reasonably rapidly. And if I don’t get there, well as discussed, that is OK too.

I tend to buy and hold. Elsewhere on this forum I talk of holding MX for about 15 years. That is not the same as once having bought MX 15 years ago and done nothing since. Actually bought 5 different times, and sold 2 (as recently as yesterday I returned 400 shares to Mr. Market at just under $26). 

If you thought my tale of MX was wild, you should see my trades in NCX over the years. 

The point here is that I get to know and love (well maybe love NCX is a bit much) an investment over a long term, so when it falls to a really, really silly low price, I have the confidence to back up the truck. I can ignore the fact that I have lost a pile of money on paper in the past and buy with both fists. When I bought another 9400 NCX shares in early February, it was a marginal investment of $12000, a speculation even. What is the context. Well net worth at the time of about $600,000, so the investment was about 2.5% of net worth, so hardly reckless. I already had 5200 shares so total position still under 4%. Here is where most people lose me. I had already lost about $60,000 on my initial 5200 shares. I didn't care and you shouldn't care either. The only things that matters is what is the opportunity that day and the size of the bet relative to net worth that day. The situation was at the time that Nova needed to come up with an additional 200 million dollars financing. My thinking at the time was that hey this is a 6 billion dollars sales company. Hey the board of directors of Nova or any other company that size has an aggregate net worth in that ballpark. It just was not reasonable that Nova would fall for want of such a puny (relative) amount of money. A few weeks later, I was proven right as the company was sold for US$6/share. As Nova was now about 20% of net worth, and haven recently drank the BCE kool-aid, I sold about half into the market and waited out the closing of the deal on the balance. I only made money on two of my 8 or so purchases of NCX over the years, but made a small amount in the aggregate. NCX was a shitty company to be involved with over the years. I would have been better off never hearing of the company. But that miserable history allowed me the confidence to make one more fateful buy.

So maybe this makes me a lousy investor who occasionally makes his own luck. That was definitely the TSN turning point for me last year. 

Interestingly, around the same time TCK.B was hammered down to about $4 and I was sniffing about, but I just didn't have the time in bed with this one over the years, so I passed. Talk about the one that got away!

Last year was a bit frantic. Most years I do about 6 trades. In 30 years of investing I have only held 60 or so unique securities and hold 21 today. About 6 of those 60 went bankrupt, and about 10 were bought out. I don’t know the number, but my average hold time from first purchase to elimination from the portfolio would have to be somewhere between 5 and 10 years. I really do tend to buy and hold. Never done an option, warrant, bond, ETF, or mutual fund. I occasionally hold preferred shares. 

I had BBD.PR.B (?) but sold and bought more common when BBD.B was in the $2.50 range. Again BBD.B goes back a long way, something like 10 or 15 years. I took the opportunity last year to increase holdings from 2600 to 8100 shares at a really favourable price. I expect at some point of BBD.B share price and rising interest rate prospects (the preferred is a variable rate), I will do the reverse.

I have never purchased a lottery ticket for myself. Occasionally as a small throw away gift. Why would I? Remember I like certainties, or near certainties. It is a near certainty that for every dollar paid on a lottery ticket, 80 cents comes back. I like the adage that lotteries are a tax on stupidity. I bring this up to tie back with my NCX caper. You could rightly accuse me of gambling on that one. But there is gambling when the expected value is < unity, a lottery, and > unity, certain investing opportunities that occasionally come by. Understand the concept of expected value and stay away from < unity situations.

I leverage the certainties and near certainties. I know my bottom line. I aim for buy and hold, but adapt to exceptional circumstances. I let compounding work its magic. I invest for the long term. I occasionally gamble on EV > 1 situations. I use the hand tools of investing. 



Hboy43


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## OptsyEagle (Nov 29, 2009)

hboy, I love it. 

I am not sure that yours is an investment style, but is more like a "personality" that unfortuneately few would be able to or even want to replicate.

But I do love it. Good luck to you.


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## Rickson9 (Apr 9, 2009)

I find hboy's investing strategy interesting. It's not suited for my personality (I'm a coward so I trade far less and hold far fewer different securities; I also don't adapt as well), but I can definitely see how one can be very successful with it. As the clichee goes, "there are a million ways to make a million bucks". Well done.


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## MoneyMaker (Jun 1, 2009)

Rickson's technique is pretty much 'value investing'.... buying companies for pennies on the dollar with a competitive advantage/moat whilst imploring a margin of safety and using a bottom's up approach vs top down analysis which is widely used today

Warren Buffet is the most famous example of this style with a tad bit of Fisher's teachings in him


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## financeguru (Jan 18, 2010)

My strategy is pretty much based on leverage. Back in October 2008, i realized that it was a really good opportunity to play the stock market. The only problem is, no one knew when the market would bottom out. There were all kind of rumours flying around ~TSX as low as 6500 etc. So my strategy was based on three principles: 1. Since i can't predict the bottom, i'm going to dollar cost average my investments, and specially buy on dips during that high volatility time period. 2. Since every asset class seemed high risk (financial, oil, high tech) my best would be to buy a diversified ETF and let the market take it course. 3. Since i have faith that the market will pop at some time,this is a good time to leverage my money otherwise my returns would not be that impressive (required a lot of courage for me to do i must admit at that time, in hindsight now it seems so logical).

I bought XIU from my margin account in Oct 2008 for about 10K. The money came from my HELOC. I then leveraged it to about 30K by making timed investments though my margin account....by December i had maxed out my margin account.....i then put another 10K from my HELOC and contributed on dips till March. By that time i had invested about 55K, non of which was really my own money (20K from HELOC, 35K on Margin). My ACB was about 13.5 on XIU at that time. I was also prepared to put more money in if the market didn't recover.

I recently sold some of my XIU holding @ 17, i'll sell another half at 20. Made about 14K so i'm happy with that (includes paper profit). Given that my initial investment was 20K, i made a 70% return - i know some have made 300% returns, but i had a piece of mind investing in XIU which was a play on the biggest firms on TSX and i had faith that they wouldn't go belly up so in the end it wasn't that risky.

In my mind opportunities like this come around once every 7 years. Some people take advantage, others just ring out the doomsday scenarios. I don't know how many people at that time were saying that we would get the great depression....bla bla.

I should mention that i have a separate cash account with another broker, in which i do some stock picking as well...that one also got me a return of 60%.


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## dogcom (May 23, 2009)

I think to many in the US but not Canada feel they are in the middle of a great depression at this very moment financeguru. Even so you had guts doing it the way you did and now I would pay off the loan at this point and wait until you get another opportunity.


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## financeguru (Jan 18, 2010)

dogcom said:


> I think to many in the US but not Canada feel they are in the middle of a great depression at this very moment financeguru. Even so you had guts doing it the way you did and now I would pay off the loan at this point and wait until you get another opportunity.



You are right, irrational exuberance, ppl in general get too optimistic when the market is booming and too pessimistic when market is crashing. The emotions of investing are an interesting and different topic altogether. I was reading somewhere that the actual high one gets from making a killing in the market is what spurs people to invest. Also when you are sitting on a huge capital gain it doesn't 'motivate' you as much than the frustrations of having a capital loss. The above is particularly true in my case. For example, i've almost doubled my investment on GOOG (bought @ 310) but i'm more pissed at my losses on RIM, which i bought at 75. Being aware of these emotions, allowed me to cut my losses on RIM and invest that money somewhere else, it was hard for me to do - but i believe its the right thing, i can't read the damn company - its P/E is very favorable compared to its peer group (14ish versus 33 for AAP) but so much noise about it losing market share and blah blah and the stock hasn't done too much over the past 3-4 months despite its blowout Q4 earnings. Not too mention that i don't like their product compared to an iphone or other gizmos coming out there. In other words too much uncertainity.

I believe people who win in the stock market are the ones who can control their emotions.


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