Tag archives: Value Investing

Review of The RAFI Index Stock Picking Strategy

Last update on June 22, 2015.

Factory

 

ETFs are great. As I’ve explained in my free book, I think they’re a much better way of investing your money than by investing in higher cost mutual funds. This has been particularly true for ETFs that invest in stocks.

However, no financial product is perfect, and if there’s one criticism of the traditional type of stock ETF, it is in its failure to distinguish between cheap and expensive stocks, even though buying cheap stocks has been proven to boost returns.

The traditional stock ETF weights each stock according to the market cap (i.e. the size) of their ...

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The Manual of Ideas (Book Review)

Last update on May 21, 2015.

"All achievements, all earned riches, have their beginning in an idea." - Napoleon Hill

Every time I read a book, I always ask myself what value it ultimately imparts to the reader. In the case of “how-to-invest-type” books, the vicarious pleasure of finding a compendium that challenges one to think is usually a rare experience: many authors successfully introduce us to the tenets and strategies that define a particular style of investing, but very few actually supply us with a framework for how to think about certain investments; how to approach and build our own unique process; or even how to ...

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The Art of Value Investing (Book Review)

Last update on May 7, 2015.

Imagine you’ve been invited to attend an exclusive value investing conference, featuring some of the world’s most successful and renowned value investors. You share a limo with Joel Greenblatt; sit next to Seth Klarman at a workshop; have the soup du jour with David Einhorn; and listen to Bill Ackman and others light up the ballroom tables with anecdotes of the ‘08 meltdown.

That’s sort of what it feels like reading The Art of Value Investing: How the World’s Best Investors Beat the Market.

Okay, maybe it’s not that glamorous; but readers truly are given breathtaking access to the minds ...

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Are You Willing To Hold An Investment For 10 Years, As Buffett Suggests?

Last update on Feb. 8, 2015.

 10 Euro Bill

 

"Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years." - Warren Buffett

When I read the above quote for the first time, I was a novice investor and I couldn't wrap my head around it. Back then, I thought value investing was about investing in companies with low Price to Earnings ratios and/or companies with low Price to Book ratios. I noticed that these ratios moved up and down a lot, which meant that stocks that looked like "value stocks" one year did not fit the description the ...

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Reasons To Avoid Momentum Based ETFs (WXM)

Last update on Jan. 13, 2015.

 

Over the last few years, we've seen a big increase in the number of ETFs in the market. Some of these new ETFs focus on specific sectors of the economy or countries, while others give us the opportunity to invest according to specific investment strategies. (If you want to learn more about ETFs, please read our free book).

One of the new ETFs that employs a specific strategy is the First Asset Morningstar Canada Momentum Index ETF (Ticker: WXM.TO). As the name suggests, this ETF selects stocks that have momentum. WXM.TO has performed very well since its ...

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How Warren Buffett Picks Stocks

Last update on Oct. 27, 2014.

 High jump

 

I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over. - Warren Buffett

When I first read the above quote, I was pretty new to investing. So when I read it, it didn't make any sense to me.

Warren Buffett is widely regarded as the most sophisticated investor alive. He has expertise in accounting, finance, economics, regulation, as well as intimate knowledge of many industries. By all accounts, he uses his knowledge in all of these areas before he makes a single purchase of stock. So how can ...

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My TFSA Update Aug 2014 - Why I Had First Bought Tim Hortons

Last update on Sept. 15, 2014.

Tim Horton's

 

In this series, I (Jin Choi) talk about my goal of reaching $1 million in my TFSA account by 2033. Note that this is just for my own personal account, not me and my wife's combined. For an easy explanation of the TFSA, please read our free book.

In this episode, I'll update you on my August results, and talk about why I had first bought Tim Horton's stock over a year ago.

 

August Results: Up 2.8%

At the end of August, I had $71.691 in my TFSA account. That's up 2 ...

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Q: MoneyGeek vs. Canadian Couch Potato Portfolios - What's The Difference?

Last update on March 13, 2015.

The Canadian Couch Potato (CCP) is a popular blog run by a journalist named Dan Bortolotti. The site offers its own model portfolios, as well as other information of interest to investors. What's more, its portfolios are available for free, whereas access to MoneyGeek's regular porfolios cost $70/year.

Some readers have asked me what the differences are between MoneyGeek's and CCP's portfolios. In my view, there are 5 main differences.

1. Portfolio Variation

MoneyGeek offers 5 different regular portfolios. Each of these regular portfolios contains the same ETFs, but in different quantities. The portfolios differ ...

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Q: What Is The Premium Membership?

Last update on Feb. 10, 2014.

High horsepower

More horsepower: Premium portfolios are like cars with higher horsepower. You can potentially go where you want faster, but it's also riskier.

 

I've received quite a few emails asking me about the premium membership. In this post, I'll explain the difference between the regular and premium memberships.

Regular vs. Premium Portfolios

Whereas regular members have access to regular model portfolios and other tools, premium members have access to everything regulars have, plus premium model portfolios. Let me explain the differences between the two types of portfolios.

Regular portfolios mainly consist of ETFs. Because each ETF invests ...

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Dividend Investing Won't Work

Last update on Dec. 20, 2014.

 Poker table

Poker table: Investing is a lot like poker. Drawing analogies from poker helps to explain why simple investment strategies such as dividend investing don't work.

 

Many people today like to invest in higher yielding dividend stocks. In this series, I explain the reasons why I'm not a fan of this approach.

In our last installment, I explained why dividend stocks aren't any safer than other stocks. In this article, I will explain why I think you shouldn't follow the dividend investing strategy, or any other simple investing strategy for that matter.

The Perceived Advantages ...

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