- Where can I look up the investment terms used on this website and other financial information?
- What books do you recommend for learning about investment?
- Why did you build this website?
- How did you develop your investment strategy?
- Do you receive remuneration from the companies for recommending their stock?
- Are you modifying your system as you gain experience?
- Where do you get your financial information?
- Why do you use price/sales ratios rather than price/earnings ratios as your main method of valuation?
- In addition to the points covered in Strategy, what else do you consider when choosing stocks?
- Do you do short sales?
- Do you trade options?
- Why are 2 different industry classifications given for some of your stock picks?
- How many people have visited LloydBarclay.com?
- Are you affiliated or associated with Lloyds Bank or Barclays?
- Is Lloyd Barclay your real name?
|Where can I look up the financial terms used on this website and other financial information?|
|Please go to the Glossary of Investment Terms.|
|What books do you recommend for learning about investment?|
|Please go to the Investment Books.|
|Why did you build this website?|
|I built this website to build a career in investment. One option is to start a web-based business. I am also considering becoming a portfolio manager or mutual-fund manager.|
|How did you develop your investment strategy?|
|On the Investment Books page, you’ll see a list of recommended investment books. All of these books played a part in developing my strategy. The framework of the strategy came from “Contrarian Investing” by Anthony M. Gallea and William Patalon III.More ideas on value investing came from, “The Intelligent Investor.””Common Stocks, Uncommon Profits” and the books written about Warren Buffett provided me with an understanding of qualitative analysis.|
All of this information was tempered with a healthy dose of skepticism from
In order to consolidate this information and clarify my own investment objectives, I integrated the essentials of these books into a 20-page essay that articulates my own investment strategy. The main points can be viewed on the Strategy page.
|Do you receive remuneration from the companies for recommending their stock?|
|I receive no remuneration of any kind for my recommendations.|
|Are you modifying your system as you gain experience?|
I believe that in almost everything, experience is the best teacher. Yes, I have modified my system as I gain experience. I have used a value-contrarian system since 1996. Some mistakes made when I started, forced me to make changes. When I established the model portfolios in November of 2004, I thought that the system was sufficiently refined and that the portfolios were sufficiently diversified to earn superior returns in any 6-month period. Considering the average returns (from November, 2004 to April, 2007) and having read “A Random Walk Down Wall Street” a second time, I now believe that 20 stocks are needed to fill that objective. And I believe that 3 to 5 years is a suitable time frame with which to compare my returns to the S&P and the DJIA.
Where do you get your financial information?
|I get most of my financial information from Yahoo! Finance. I get other information from Reuters. For more investment resources, please visit the Links Page.|
|Why do you use price/sales ratios rather than price/earnings ratios as your main method of valuation?As of October, 2007, I no longer use only price/sales ratios as my main method of valuation. I also use divend yields, price/earnings price/free cash flow and price/book ratios.|
Originally, my reason for using price/sales ratios came from What Works on Wall Street. In this book, different measures of pricing were researched to determine the best indicator of future price performance. Buying companies with low price/sales ratios (in relation to their industry) was one of the best indicators of future price performance.
The main reason that price/sales ratios are better is that sales is much less variable than earnings. Many value investors look at price/earnings as a measure of how cheaply you can buy earnings. But in a difficult business environment, when a company’s stock drops dramatically, companies that are cheap (relative to sales) can appear expensive by price/earnings ratios because of a temporary period of low profitability. The stock price often bounces back before normal profitability returns to the industry. If you wait for a return to normal profitability, you will often miss out on buying stocks at their lowest prices.
|In addition to the points covered in Strategy, what else do you consider when choosing stocks? |
I also consider debt/equity ratio, dividend yield, insider trading, and price/book ratio in relation to other companies in the same industry.
|Do you do short sales?|
No. There are too many risks in short sales.
|Do you trade options?|
No. I don’t buy options and I don’t write (sell) options. Buying options is too expensive to maintain long-term positions. Writing naked options means unlimited risk. Writing cover-call options is the best option, but you could have the underlying stock taken away from you, just before a substantial price increase. Everything considered – the risk (of partcipating in options trading) is too high to justify the reward.
|Why are 2 different industry classifications given for some of your stock picks?|
|Yahoo! Finance and Reuters classify stocks in different ways. With many stocks, the classification is the same or almost the same. But with other stocks, the classification is different. For example, both organizations say that Navarre (NAVR) is in the Computers – Wholesale Industry. But in the case of Celestica (CLS), the classifications are different. Yahoo! Finance classifies Celestica (CLS) as being in the Printed-Circuit-Boards Industry, while Reuters classifies it as being in the Electronic-Instruments & Controls Industry. Since I do research using both Yahoo! Finance and Reuters, I specify both classifications when there is a significant difference.|
|How many people have visited LloydBarclay.com?|
|As of September 19, 2010, the website has been accessed roughly 132,000 times, by viewers from 79 countries, for a total of about 567,000 page views. About 725 of those viewers have signed up for the free subscriber’s newsletter.|
|Are you affiliated or associated with Lloyds Bank or Barclays?|
No. I am not associated with either bank.
|Is Lloyd Barclay your real name?|
Yes it is. It is not a pseudonym or a pen name. Nor did I change my name.