One of the things that compelled me to first dip my toes in investing was reading Peter Lynch’s One Up on Wall Street. The straightforward prose of the book, as well as its key conclusion- that average investors can do as well as, if not better than the professionals inspired me. It is the first book I always recommend to friends who wants to learn how to invest in the share market. Of course, as many of you have experienced, the theory is a lot more difficult to practice. Especially in microcaps, individual investors have significant disadvantages to institutional investors. In saying that, there are some key structural differences that evens the playing field for the individual investors.
So, I have put together some pros and cons of individual investors in the microcap space.
Note: I am assuming that the investors here are long-only and invests with no margin. Continue reading →
This was an article I wrote when I was in university 6 years ago for the investing club (I am getting old…). I have learnt a lot more since then, but the core ideas in the article still stayed true. Some of the examples are outdated:
for BHP the mining boom has turned into a bust and is undergoing its mini-revival. The stock price of BHP has stayed flat (it is at $23.67 as of 10/3/17). You would have done better buying their South32 spinoff…at the right price of course (Forager Funds did a great write-up on it 2 years ago).
Warren Buffett has bought IBM, airplane stocks and Apple (another testimony of how much of a learning machine he is!)