Tag: investors

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  • Superstition In the Stock Market May Lead You to Lose the Shirt

    Superstition In the Stock Market May Lead You to Lose the Shirt

    Superstition In the Stock Market
    Stevie Wonder wrote in his famous song:
    Very superstitious
    Writing’s on the wall
    Very superstitious
    Ladder’s about to fall
    Thirteen-month-old baby
    Broke the looking glass
    Seven years of bad luck
    Good things in your past

    Superstition is so live in the stock market that you can barely believe. Imagine that it is Friday 13, just like it was in April, September, and December this year. Some people, especially scientifically-minded, would roll the eyes. But, despite the fact that Friday 13th is just a day in the calendar and it may occur several times in one year, some investors truly believe that it is a bad-luck day. 

    When enough investors share this foolish belief, stock prices can be changed but not in the investors’ favor.

    But do superstitions really affect the stock markets? 

    Some studies revealed that people are more risk-averse when thinking about Friday13.
    One study from 2005 discovered that hesitation to do business on this day ends in a loss for the US economy of almost $900 billion. Does this scare affect stock prices? Believe or not, yes.

    First superstition: Friday 13th

    According to a study, returns on Friday 13th are lower compared with other days.

    This Friday 13th effect was broad spread among numerous investors until 1980 but has disappeared. The reason is simple: automated trading erased the “Friday 13th effect”. 

    But it so funny to talk about Wall Street superstitions. So let’s proceed.

    Superstition In the stock market No2: Did you know anything about the witching hour?

    Several years ago I found an article written by the man who worked as a broker on Wall Street. I am sorry, I didn’t remember his name. But what I remember is the witching hours are between 2 and 3 PM. Superstition linked to this part of the day (notice, it was on a daily base) was related to market close. If the market sold off at that time, it was a sure sign that the market will be closed on a positive mark. In that interval, from 2 to 3 PM, he and his colleagues were maniacally buying stocks. Just to provide a stronger close.  

    It worked until it didn’t. They didn’t leave the stats.

    Superstition In the Stock Market No3: Sell on Rosh Hashanah and buy on Yom Kippur

    The superstition works like this: on Rosh Hashanah, which is the first day of Jewish New Year investors should sell some of their positions and buy them back on Yom Kippur. This year Rosh Hashanah began on the evening of Sunday, September 29 and ended on the evening of Tuesday, October 1. 

    Do you believe that this trade works? Well, yes. More often than not. But for Jewish. Maybe you should try to sell some of your positions on January 1 or on Christmas or on Islamic New Year. In 2020 it will begin in the evening of Wednesday, August 19 and ends in the evening of Thursday, August 20

    But I am not so sure, dates may vary. 

    Chinese new year will begin on Saturday, January 25, 2020. 

    Did you know that for one part of Orthodox the New Year actually begins on January, 14? Confused? It is just a calendar. But if it works for Jewish why it doesn’t work for others? There is no reason. The only thing to consider is, do you have to trade according to the Jewish calendar or you can use any.

    What I learned during my life is: about superstition and taste is worthless to argue. Take it or leave it.

    Superstition No 4: Super Bowl theory

    This theory goes that the Dow Jones will have a good year if a National Football Conference (NFC) team wins the Super Bowl. But if the American Football Conference (AFC) team wins it will end the year lower.

    For those with a lack of knowledge about American football, the American Football Conference (AFC) and National Football Conference (NFC) are parts of the National Football League (NFL). Honestly, European football is simpler. 

    From 1967 to 2003 this superstition showed it was accurate 68%.  Several years in a row AFC teams were winning the Super Bowl and that was a period of economic growth, but who cares?

    Let’s ask the stats.

    It was 1967 when one AFC team won the first Super Bowl. During the following period, AFC teams have won 11 times, if you check the stock market result you will be surprised. In 6 of those 11 years, the stock market was dropped. On the other side the stats aren’t so favorable, NFC won Super Bowl more than 30 times and Dow Jones didn’t advance in each of them.

    October Effect

    This one is a bit harder to rebut. 

    The October effect is a market anomaly. The stocks tend to decrease during October. Honestly, it is mainly a psychological effect rather than a real wonder. The stats show something different than this theory. 

    But…

    October has this reputation thanks to Panic in 1907, Black Monday, Black Tuesday and Black Thursday in 1929, and Black Monday in 1987.

    Black Monday, 1987 that happened on October 19. The Dow fall 22.6% in one day. It was possibly one of the most unlucky days for investors and the stock market. 

    Despite the scary title, this effect is not statistically exact. From a historical view, October has seen the end of bear markets more than it witnessed the beginnings. But, investors see this month as dangerous and they are selling, and that sentiment creates possibilities to buy on the other side. So, superstition or not, while one sees the end, the other will see the beginning.

    Bottom line

    Irrationality and superstition in investing will always cause lower returns. Traders, whether they admit it or not, are superstitious. Some will have a happy pen, the other lucky shirt or underwear (hard to believe), some will have some other talisman. Superstition in the stock market is broad spread.

    Luckily, many investors and traders are devoted to science, education, and knowledge. 

    As Stevie Wonder wrote: 

    When you believe in things
    That you don’t understand,
    Then you suffer,
    Superstition ain’t the way

    Happy trade!

  • How To Know If a Stock is Worth Buying

    How To Know If a Stock is Worth Buying

    How To Know If a Stock is Worth Buying
    How to recognize if a stock is worth investing in?
    What causes a stock to be good or bad?
    What things to consider?

    By Guy Avtalyon

    How to know if a stock is worth buying? Let’s assume you are new in this field and how you can decide what stock to buy. For some investors, it is a tricky part. To be honest, it is hard for everyone. The risk is involved, the volatility of stock or market, the investment goal. Everything is on the table. But if you follow some rules connected to the estimation you can figure out how to know if the stock is worth buying. Yes, many people will tell you stock investing is like a wheel of fortune. And they are wrong. Investing is like solving the problem. Everyone has its own way, own style, but the goal is the same: solving a problem.

    Prudent investors must enter the stock investing as if they have to solve a problem. Step by step. 

    Buying stock isn’t like buying a new sofa and when you find it isn’t for your room you can take it back. When you buy stocks, you have to be convinced they will hold their value, increase in value, and you will gain profit when you sell or deliver to you notable dividends over time. The main point is to know when a stock is worth buying. 

    Look at the price

    When you have to decide if some stock is worth buying the first thing you will find is its price. You have to figure out how much the ownership of shares in some companies will cost you.

    The amount of money you have in your hands will determine how many shares you can buy but the most important is to know historical data about particular stock prices. If you find the stock has steadily increased over time you will know that you can expect a good value in the future. 

    Pay attention to revenue growth

    Share prices will grow if a company is growing. A company is growing when rising its revenue. Increasing revenue will show you if the company is strong. We can say it is a major indicator often called top line. The important part is not looking at revenue isolated. You have to observe all rise and drops in each quarter and year. And here is the tricky part. The positive trendline is good for the stock price but the revenue may be dropping or be flat and it is important to understand why that is.

    You should check the company’s current holdings, projections for future operations and stability. If you hear or read some news, no matter if they are local or even rumors that the company is doing bad, it is better to step back. You wouldn’t like to hold stocks with so much stress. Your money is involved and you could lose everything invested. So, check the company’s revenue, it is easy since almost all companies have their official websites where you can find all this info. 

    But keep one thing in mind. If it is a temporary situation and historical data shows its stock was good in price that can be good for you to buy a stock at a low price and wait for it to rebound over time.

    Some stocks may temporarily drop in price and it can be a good deal to buy them now because they have the potential to recover.

    What is the company’s earnings per share

    This info is important and you can easily count it. Just divide the leftover amount at the end of each quarter by the number of shares the company has sold, and you get the earnings per share. For example, if a company made $100 million in profits in the prior year and has 52 million shares, the earnings per share is $1.92. As an investor, you should pay attention to this since the higher earnings per share (EPS) shows you that the company is in good shape. And the tricky part again arises. Some companies can manipulate with EPS. The process is simple. They do it by buying back their shares. In that way, they are boosting EPS but not increasing profits.

    Use the technical and fundamental analysis to know if a stock is worth buying

    You will have some idea about stock’s quality if you check the prices over the past 200 days, for example. And you will see the trends. Trends are repeating. 

    Analysts think that by observing the movement over a determined period, you can define the baseline, the point where the stock should recover. Here the advice, don’t buy the stock at its highs, wait to come close to the baseline or to hit it. Some may ask how is good stock if hits the baseline. Well, when the stock hits the peak it is expensive, the price is increased, and the stock has no more space to run so the only possible scenario is to go down. If you buy a stock at its peak you will lose your money. So, it isn’t a good time to buy a stock.

    Also, perform fundamental analysis. That will show the current and projected financial aspect. Use that info to discover now’s value. Use the company’s statement and balance sheet to determine the business strength. It isn’t a 100% indicator,  but it is enough good sign of what you can expect from the company in the foreseeable future.

    How to know if a stock is worth buying

    One thing is sure and you must have that in mind when you are trying to know if a stock is worth buying.

    A company can’t manage every single thing that might affect the business. The general economy can influence the health of a company and its stock play. For example, consumer prices, the changes to interest rates can affect how a company is doing. That is not in connection with its own business. But, the stable economy produces companies’ wealth and share increases come with that. And opposite, share prices can stumble during times of economic uncertainty.

    You will find many analysts that issue reports and tips about individual stocks. These tips appear with “buy” or “sell” ratings. But analysts often disagree, so it isn’t recommended to depend on one report. Always compare several to know if a stock is worth buying.

  • Getting Started Investing is the Hardest Part

    Getting Started Investing is the Hardest Part

    Getting Started Investing is the Hardest Part
    Getting started investing can be very easy and smooth since you need a little money to start. Investing is better than savings accounts because it can shorten the period of earning.

    By Gorica Gligorijevic

    Getting started investing isn’t a big deal, it shouldn’t fright you. Honestly, it’s so easy.

    You know what, when I was just a little girl (my grandma used to sing this) my parents gave a lot of effort to teach me how to save money. Grandparents would like to give me money for some holidays with advice to keep it for rainy days. I had my savings account. From time to time, they would put some money there but most of the time they insisted I have to put. And I did it. Not frequently, I have to admit, but still. With time that habit got strong roots. Every month I’d put 10% of my earnings on my savings account. I am still doing the same. That first savings account is my 10%-account. 

    No matter how big or small portion is. 10% would every time end there. 

    I can only speak from personal experience but I am sure that other people could easily find themselves in the same situation. 

    I am not going to give you advice because I know that is almost impossible to put anything on your savings when you are living paycheck to paycheck. Yes, the amount of money that the majority have available to spend every month is insufficient to put something aside. Despite the old saying about money: If you save me today, I’ll save you tomorrow.

    But we all know how important is to have something aside. And it is possible. Let me show you how.

    How getting started investing

    Okay, do you know the rule “pay yourself first”? Yes, starting this is hard. But do you understand the meaning of this rule? Of course, you do but why not tell it again. This means you have to put on your savings every month some amount of money. It doesn’t matter how much it is. A few dollars, or other currency you have. Just when you get your salary, put aside several coins. Every month. And you will see, that amount will grow with time. Try this. I am not going to tell you how should you spend this money. You may have enough for exotic travel, or to buy a car, or after some time you may have enough for house buying deposit. Just start.

    No, I will never tell you to live below your means. 

    Sacrificing isn’t a good way to save anything except life. If you try this method, living below your means, you will be unhappy and you will always have the feeling that something was taken from you. It can be a trigger for something more serious. But, anyway, try not to purchase the famous brands, too expensive things. Do it occasionally if it makes you happy. But don’t let it be your goal. Life is a lot more than brands.

    Create a budget

    What you can do is to make a budget frame. It is a smart idea to write down the amount of money you have every month. You can do that in some excel spreadsheet, or just in some memo. Also, there is a lot of money management apps you can use. OK, that’s the first step. The next is to subtract all the costs you have, for example, taxes, debts, loans if you have (don’t worry, we all have), etc. What you have in your hands after these deductions is your net income. This is the amount you have to use as a base for creating your budget. So, track your spending to be able to make some adjustments if it is necessary and possible, of course. You should review your budget from time to time to be sure you are on a good track.

    Getting started investing 

    Do you know that your money can work for you? Yes. Let’s assume that after one year of saving you have enough for exotic travel. Why do you need to make it right now? Go somewhere else and save e.g. $1.000 on your trip. That amount is more than enough for getting started off investing. You can do that with less money, here you will find how. You can choose to invest in some mutual funds (it is probably the best for starting), or stocks, or real estate. By investing you will generate a greater return than your money sleeping in your savings account. If you invest in something you will let your money work for you. The whole process may be done with your banker’s help. Your bank has financial advisors, investment advisors, they will tell you where to invest. Or you can engage some brokers.  

    What are the advantages of investing

    One of the main advantages of investment is that you can have your money work for you to earn more. Let’s say this way. You don’t need to work more to earn more. Your investment will that for you. Investing could bring you a higher living standard, for example.

    Further, you can apply investment plans for saving and growing money. The best part of investing is that you can be a long-term investor and money earned from investments can be spent to cover future expenses, for example, for your retirement, or buying a house, new car, your children’s higher education costs, or just you want to have more.

    It is important for you to understand that investing isn’t gambling.

    You can make a profit on investment due to research and careful choice of a suitable investment vehicle. It isn’t betting. The truth is that you can make losses in the market. That’s the reason to make less risky investments. Never mind if they have lower returns. Stay on them until you find yourselves capable to play riskier. That time may never come. You can stay in safe investments for your whole life. It is OK. 

    In that way, you will protect your property in the long run. 

    So, you can see that getting started investing isn’t always the hardest part. It can be very easy and smooth. You just need a little money to start. At least if you have some targeted amount you have to save in some period, investing will short that period. You’ll be able to gain it sooner. Sounds good, don’t you think?

  • Bull Market – What Everyone Should Know?

    Bull Market – What Everyone Should Know?

     

    stock bull market
    A stock bull market means that investment’s price rises over a long period. Investors’ faith in stock prices lead the prices themselves in a self-fulfilling prediction.  A bull market means profits for investors who own stocks.

    What exactly is a bull market? If you are like me several years ago, you are confused with all these terms, conditions, maths, evaluations, or estimations of the stock market.

    May I be honest with you?

    The truth is that I know nothing about the stock market when I entered. I was foolish, I know. But my desire to earn, to be investor was something I never have had before. It was like this…

    A personal story

    A friend of mine had a grandfather. Extremely interesting figure. He came from Italy to the US as a kid. OMG, he was just 12 when he bought a ticket and came with nothing except dreams about fortune. To shorten this story, after several years of struggling he made his first success. He became a clerk in the office of some broker. Step by step, that wonderful man became very rich. People, listen. Very rich! 

    I wanted the same. ASAP! I asked him for the recipe. Oh, how I would like I never did such a thing! The first lesson was: You know nothing, have to learn a lot. C’mon, man! Give me something else to start. I thought I know everything. I have just finished university. With a diploma in the hands, I thought I know everything possible about anything. Of course, I was wrong.

    That blessed man told me I had to learn. How to, where to go? I spoke with some friends. No help. So, I decided to start. I found a broker, put some money (not a lot) on my trading account, and started to find a stock. That was a nightmare! My first trade was totally a disaster! I placed another trade. The result was the same. In two trades I lost everything. 

    Ok, at least I tried. Then I went back to my friend’s grandfather and asked him to teach me. 

    “You get your first lesson, my son.” 

    OK, I understand. I have to go for basic. And I started to learn. You must learn to have a chance to earn.

    The bull market was the point where I started. I can’t explain why, but I felt I needed to know what it is.

    The term “bull market” indicates a stock market is rising. Of course, every single investor supposes the market to rise. Better say, has a hope it will rise. But having only hope means to stand in the mud. You can slide in a moment and fall. Having my previous experience in the mind, I needed more facts. 

    Nice from this zoological term

    So, I learned that the bull market occurs when the prices rise for 20% or more.  

    Further, I learned that a bull market systematically produces higher highs and higher lows. A stock bull market happens in a strong economy. Nice again, thanks bulls. But what can drive a stock bull market, that I wanted to know?

    And I found (with a little help from my friend) that great revenue, profit, and P/E ratio are the most important.

    The revenue should be in line with the economy, meaning revenue should grow by the speed of economic growth. Here is some interesting part. As consumers spend more on goods and services rise the economy will rise. Super!

    And I came to the companies profit.

    The revenue must generate profit. 

    But some knowledge defeated me. I thought that great profit is a wonderful thing and it is good when the company can generate more profit from the same revenue money. But it is not so simple. 

    And the P/E ratio! The stock price is just the amount of money it will cost to buy a share of a company. But stock prices can vary. If the demand for the stock rise, its price will rise too. The P/E ratio estimates the relationship between a stock price and its earnings per share. 

    I was confused just as you are now, I believe.

    In a bull market

    In a bull market, you’ll notice powerful demand and limited supply for securities. This means that more investors want to buy securities and less want to sell. What will happen? The stock price will rise, right. Let’s go further! Let’s observe investors’ psychology.

    In the stock bull market condition, investors have the hope of earning a profit. They are positive and optimistic. Oh, how I wanted to have that experience. Instead, I was scared to death. I needed more knowledge to sure what I am doing. My first trade was so stressful and, by the way, I wanted to show my older friend that I can learn.

    In the periods of the bull market, people have more money.

    And they are spending. In turn, it stimulates the economy to grow. My old friend told me something important and let me share that with you.

    When it is the bull market, you should buy stocks in the early stage, while they are not too expensive. As the price goes up, just wait for its peaks and sell your stocks. And don’t worry if there are some losses in price. It is temporary. Just invest in more stocks with a higher chance of getting a bigger return.
    I am grateful to him for this lesson. But there was one piece of advice that sounded the most important to me: “Play the market like toreador plays his wonderful performance in the arena. Peaceful, with confidence, elegant. Tickling the bull. You have to know where the limits are, don’t get surprised.” 

    I’ll not. Thank you, my dear mentor. 

     

     

  • Trade War Spillover In The Stock Markets

    Trade War Spillover In The Stock Markets

    3 min read

    Trade War Spillover In The Stock Markets

    The U.S. Treasury announced in a Saturday statement that the administration “is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time.”  Following this news, Dow Jones futures grew a bit on Sunday evening, the same happened with S&P 500 futures and Nasdaq futures.

    Only one day before, Bloomberg reported the Trump administration is thinking about limiting the exposure of US investment to China. Such a decision would have an impact on public pension funds’ exposure to China’s market and limitation for Chinese companies in main stock indexes.

    The information about delisting Chinese stocks from U.S. exchanges frightened investors. The consequences of the trade war spillover were that Alibaba stock dropped 5.1%, slipping through its 50-day and 200-day moving averages. JD.com stock dropped 6% to a bit over its 200-day.  Two Chinese IPOs, Pinduoduo slipped 4.2% and Huya stock 9.4% due to trade war spillover. New Oriental Education stock, dropped 6.55%, which is under its 50-day line.

    Beijing described possible limitations on U.S. investments in China “the latest attempt at a decoupling,” published in Global Times on Sunday. All reports of Chinese state-owned media stated that the delisting Chinese companies from US stock exchanges would have deep impact on both, Chinese and US economies.

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    Monica Crowley’s, U.S. Treasury assistant secretary for public affairs, stated this weekend that US administration is not thinking to block Chinese companies: “We welcome investment in the United States.”

    The trade war between the US and China lasts almost one year. The next round of discussions will be held one week after China’s National Holiday, 70th anniversary of the founding of the People’s Republic of China on October 1.

    The Chinese economy is the second-largest in the world. Its progress in the field of artificial intelligence and chips is notable. Also, robotics, 5G, energy storage could lead China to be the most powerful in advanced technologies.

    What to watch in the stock market in the week ahead?

    The next few days will produce some earnings releases, which could give some individual stocks moving. 

    Costco

    Market Cap $125.758B

     

    Its earnings report appear this week. It looks that Costco had benefit throughout the quarter. The analysts estimated they have earnings of around $2.54 per share. Last year it was $2.36. So, the expectations are a 7.6% increase.

    Costco will reveal its results on Thursday. The investors are expecting to see good news. This warehouse retailing giant has enjoyed a nice increase in customer traffic lately. In the fiscal fourth quarter, it grew 6% in the U.S. market and over its global sales.

    Stitch Fix 

    Market Cap $1.85B

     

    This company’s earnings release will be revealed on October 1.

    Its stock has dropped more than half of its value during the past 12 months. But this online service that gives clothing services has built solid annual income growth in the past 3 years. 

    Client numbers rose 16.6%  in the fiscal third quarter. This is, of course, assuming Stitch Fix keeps its pricing in check. The analysts estimate is calling for $0.04 per share this week. Good news for shareholders.

    Constellation Brands 

    Market Cap $39.511B

     

    The company’s earnings release will be public on October 3.

    The company has succeeded to keep a very constant sales trend within an alcohol industry. In the last 5 years, Constellation Brands has grown its earnings from sales. Its investment in Canopy Growth was a weak move since the Canopy didn’t show some good results this year. But the company’s beer segment may show better condition. For now, that is the best part of Constellation Brands’ business.

     

  • The value of investments is falling – What to do?

    The value of investments is falling – What to do?

    The value of investments is falling - What to do?
    This can be a big issue, try not to panic, and follow these steps to protect your capital invested.

    by Gorica Gligorijevic

    The value of investments is falling and you are worried. Don’t be, it’s normal from time to time but also, you may profit from it. Let me explain this.

    In stock investing, you have to respect a few general facts. You may face the value of investments fall, as first. What you have to do? To find the reason behind. When you determine the reason you will have a powerful weapon in your hands: you will be able to decide should you sell or hold your stocks. Moreover, you’ll be able to buy a new stock of shares. Well, you can see it isn’t the end of the world. Just think about other opportunities and try not to panic.

    Put your emotions aside and turn on your brain. Your investments are not your sweetheart.

    So, when (notice there is nor “IF”) the value of investments falls, don’t jump immediately to sell them. Yes, the news comes, but just stay cool because it can be temporary. Do you know how many investors lost their fortune reacting impulsively?

    It is painful to watch at stocks are falling in price, that’s true. But take a closer look at historical data of stock you hold. Maybe you can notice some patterns. When and why their value has had fallen before? 

    When the value of investments is falling, identify the pattern

    Yes, it is very important to identify the pattern. 

    Past performances don’t guarantee the future behave but at some point, you will figure out the causality. Most stocks respond to market movements in a logical pattern. And you’ll be ready for the next move. 

    Besides, just looking at the charts can make you more nervous. You must have more information. You must have a clear picture of how the whole industry is performing. Industry in which your beneficial company is working, of course. You are holding its stocks and you have to know something about the sector it is working on. What is about the overall market appearance, what is happening there? Is the market volatile maybe? Moreover, did you read at least one quarterly report from the company whose stocks you hold?

     

    The value of investments is falling don’t get panicked

    Okay, let’s talk about this a bit more. Let’s assume you have all the info. So, what would you do with this?

    The key is to recognize what forces the value of your investments to fall. If you cannot identify the reason behind, you should exit your position.

    Sometimes the gap in the market can cause the value of investments to fall. Or it can happen due to the market’s weakness. If you find this case, you should stay in a position. It isn’t rocket science, it is just market: supply and demand relationship. If you are on the market it is reasonable to have a diversified portfolio, right? This is very important, especially in today’s market. A diversified portfolio will produce a positive return to you. But more importantly, it will allow you to have a return higher than the inflation rate is. So, if you are a long-term investor, just stay cool when the value of investments is falling. Your investment horizon is what is really important. 

    Temporary drops shouldn’t concern you. 

    The question is, what is the main goal of any investing strategy? To gain returns bigger than the overall market for some level of risk. It is always a good concept to check how the performance of your stock is in comparison to the overall market. 

    But what if the value of investments is falling suddenly and it different from past performances? The company is still good as it was when you bought your stock! Think! Maybe the reason for the value of investments falling is exactly there. The company is too good and maybe many investors are willing to buy a stake of its shares. If you are not among them, leave your position and invest in some other company.

  • Traders are Worried Due Economic Recession

    Traders are Worried Due Economic Recession

    3 min read

    Economic Recession is Here

    Gorica Gligorijevic

    Investors are worried due to the economic recession. Traders have invested a huge capital into bonds over the past 3 months. Actually, they invested a record $155 billion into bond funds during the past three months.

    So, what’s going on? This activity shows that traders and investors are looking for safe assets and the global crisis is on the door. Traders are purchasing sovereign debts. If they continue as it seems they will, we can be pretty sure we will have a huge recession. This trend isn’t good.

    Investors prefer bonds as increased global economic difficulty induces a need for safety.

    According to data collected by Bank of America Merrill Lynch, investors put a record $155 billion into bonds during the last three months. And we all know what is the safest investment when crisis knocks on the door. The government bonds are the safest assets.

    Worries expressed in money

    In just one week, the week behind, the bonds lured $7.1 billion. For one week only. By the way, it was one of the biggest inflows ever.

    Investors have a risk aversion. They don’t like to see their capital is at risk. And as they recognized the symptoms of this financial illness called the economic recession they started to invest in safer bonds. But their action caused another problem. Everyone in the markets feels anxiety, the trade tensions are rising along with worries the global economy is worsening. 

    The markets are volatile and everyone would like to put money in assets that perform better during the crisis.

    “What we’re seeing from a risk standpoint at this point in the market is really investors that are seeking haven in longer duration US treasuries,” Charlie Ripley, a senior investment strategist for Allianz Investment Management, said Markets Insider in the interview. 

    What does stand behind this traders’ action? 

    Fear! Fear of a coming economic recession. Fear is a powerful force. And that fear is caused by an inverted yield curve. It appears for the first time since 2007, and traders and economists noticed it several days ago. 

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    That’s important because such an inversion has happened before every economic recession since 1950.

    The yield curve is inverted again. Meanwhile, China ramped up its trade war with the US. The previous developments in trade war have pushed companies of an economic slowdown. The new situation added more stress to investors.

    Trump’s “Sorry”?

    President Donald Trump, at a press conference at the Group of Seven summit in Biarritz, France, said he was not concerned that his more volatile attitude toward China would threaten stability in the global economy. 

    “Sorry! It’s the way I negotiate,” he told reporters. “It’s done very well for me over the years. It’s doing very well for the country.”

    This comment occurred after a woozy week of economic announcements from the White House. These reports have caused uncertainty among businesses and investors. 

    Trump said that China asked the US to restart consultations and negotiations. He also said about President Xi Jinping that he is “a great leader who happens to be a brilliant man”. Yes, only a few days before, he called him “enemy”.

    The Global Times, an organ of the Chinese Communist Party, also disputed Trump’s enthusiasm.

    “Based on what I know, Chinese and US top negotiators didn’t hold phone talks in recent days,” the Global Times editor Hu Xijin wrote in a tweet. “The two sides have been keeping contact at the technical level, it doesn’t have significance that President Trump suggested. China didn’t change its position. China won’t cave to US pressure.”

    All of this caused great uncertainty among investors. We will follow what is next.

  • Where To Find Investors For Startups

    Where To Find Investors For Startups

    Where To Find Investors For Your Startups
    An old story tells that almost all important brands begun as startups. Is it really true?

    By Gorica Gligorijevic

    Startups and corporate venture capital are yet underestimated and discredited category. The entrepreneurs are broadly seen as capricious and attached with dishonest strings. In some people’s minds, startups take the money and have protection from a powerful partner.

    Is it true in real life? 

    Some researches show that corporates are becoming more skilled at working with startups. It is a kind of out-sourcing. The fact is, big companies invested more than $50 billion last year into startups. The year before their investment was about $36 billion.

    It’s similar to Europe. You can read about very powerful companies like Bosh or Daimler that investing in innovative startups. The point is to stay in the game and it is easier to financially support some small startup than to develop the whole new section inside the corporation.

    Many big companies began as startups

    For example, Lyft is one of those startups, also Monzo, Bolt, etc. You just have to look at the giant’s investment portfolios.

    But, it isn’t the main subject. It is good to have such big corporations ready to invest in venture capital. The problem is if you are an entrepreneur, which company is ready to invest in your business, what is their interest, how to contact them. If you want to invest in Europe you will need some valuable information. So, Traders-Paradise recommends Dealroom, where you can find fantastic data.

    We will present you with the list of three but with the promise that we will update.

    Robert Bosch Venture Capital

    Its headquarters are in Stuttgart, Germany. As the sub-organization of Robert Bosch, it is normal that engineering technology is their focus. Its investments in AutoAI, Actility, Movidius, etc are well-known. With offices in Stuttgart, Frankfurt (both Germany) and Tel Aviv, Shanghai, and Sunnyvale in California, US we can say it covers almost all continents. 

    The company says about itself:

    “With offices in Europe, Silicon Valley, China, and Israel, we are working with Deep-tech companies worldwide. Having our investment sweet spot at an early stage we are also looking into later-stage companies, as well as seed-stage in selected cases. We prefer to syndicate our investments with existing or new investors in the company and can take the lead, co-lead or follow as necessary. Beyond the financial commitment, startups receive access to our vast network and support in commercial collaborations. Up to EUR 15m per company for 5-25%, Equity Position and 100% Commitment”

    When they are investing in startups and venture capital their focus is on AI/Deep Learning, IoT, Distributed Ledgers, Analytics, Next Generation Computer Architecture, AR / VR, Mobility Solutions, Autonomous Driving, as we found on their website.

    Novartis Ventures is one of the startups

    Their headquarters are in Basel, Switzerland and they operate as sub-organization of Novartis, a multinational pharmaceutical company also based in Basel. They already have been invested in Nabriva Therapeutics, Proteus Digital Health, Galera Therapeutics, etc. 

    The essence of their investment strategy we found on their website: 

    “Our primary focus is on the development of novel therapeutics and platforms. In our investments, we look for unmet needs and clinical impact, novel proprietary science, and understanding of the mechanism, management, and board experience and capital efficiency in the program. Foster innovation, drive significant patient benefit and generate superior returns by creating and investing in innovative life science companies. NVF is stage agnostic, engaging in investments from seed- to later-stage life sciences companies across Biotechnology/Biopharma. NVF manages over $800m in committed capital and more than 40 portfolio companies across North America, Europe, Israel, and Asia/Pacific. We invest in North America, Europe, Israel, and Asia/Pacific with approximately USD 800 million under management in committed capital and more than 40 portfolio companies. We continue our strategy of making larger focused investments and anticipate total investments up to USD 30 million per company over its life. We make equity investments in Biotechnology/Biopharma life sciences companies. NVF is stage agnostic and engages in seed investments as well as later-stage investments. We typically lead or co-lead an investment and play an active role on company boards.”

    So, you can see that health is their focus while investing in startups.

    Swisscom Ventures 

    With headquarters in Zurich, Switzerland operates as a sub-organization of Swisscom. Their business focus is on communications. Since now, they have already invested in startups like SimpliVity, Symetis, Quantenna Communications.

    What they say about their investment strategy Traders-Paradise found on their official website:

    “We are investing in Swiss and global technologies to foster digital transformation. More than 40,000 new companies are set up in Switzerland every year. We look in particular at the Swiss high-tech companies and University Spin-offs as they are fundamental contributors to the economic growth and innovation of Switzerland. We are typically leading or co-leading financing rounds from the early beginning and also take board seats. As a strategic investor, we offer entrepreneurs to access a broad range of portfolio services in addition to financial support. Those comprise the use of Swisscom’s technical infrastructure but also access to market channels and key experts in the lines of Business.”

    They say about their investment focus:

    “Artificial Intelligence – Digital applications utilizing artificial intelligence technologies and that are deployable across various industry sectors including data-driven internet services

    Cybersecurity – Advanced applications and tools to protect the integrity of networks, programs and data from attack, damage or unauthorized access

    Telecom and IT Infrastructure – Next-generation IT and cloud technologies that constitute the backbone and underlying enabler to the digital transformation comprising software, hardware, and services”

    How to start up your own bussines

    Just take a look at the list of supported startups and you will see how good is to have the strong arms behind you when starting your own business. Sometimes it looks really hard to find an investor to give life to your good idea. But, did you try? How many contacts you have? On how many doors were you knocked?

    Just don’t sit in your room and don’t cry how nobody understands you.

    Take the initiative. Be proactive! And have confidence in your abilities. Who never try, never knows. Try! And the door will open to you. Find an investor!

    Traders-Paradise will update the valuable information of this kind.

     

  • The best Australian Investors of all time

    The best Australian Investors of all time

    5 min read

    Have you ever asked yourself who are the best Australian investors of all time? We are going to introduce you just a few of them. They are the best Australian investors of all time. They are unique, specific and extraordinary.

    Richard “Dick” Fish

    Richard “Dick” Fish is one of the best Australian investors. He is retired now,  but while he was an active trader, he was a legendary pairs trader.

    He holds a 10-year track record that is extraordinary and no one has such record before.

    Since its origin in 2002, his Bennelong Long Short Equity Fund strategy has yielded investors 10 times their money.

    He was trading over Listed Investment Company, so-called LIC.

    LIC is a listed investment vehicle that gives investors access to a diversified portfolio of shares in some other companies also listed on the stock market. LICs are listed on the ASX.

    Richard “Dick” Fish had a very specific and risky strategy of the fund. How does this fund’s strategy operate?

    The fund performs this by trading pairs of stocks. They are betting on one and betting against another (well-known shorting). The returns are provided based on how the stocks perform relative to one another.

    Here’s an example.

    A pairs trader saw that company ABC was a better stock than the company XYZ. So the trader would take a long position in ABC shares and short sell XYZ.

    If the market fails off and both shares drop, the trader will still make a profit if XYZ falls more than ABC, because the short position profits will be larger than the loss of keeping the ABC shares.

    If the market grows and ABC earns more than XYZ, again the trader will profit because the gains in the “long” ABC position will more than cover the losses from betting against XYZ.

    In short, if both stocks are moving in the proper direction, that is ideal, but the investor will make a profit even if just one stock goes up.

    This strategy is extremely risky but Richard “Dick” Fish was the master of this game.

    The “pairs trading”, is a risky way to make money but very powerful when it serves.

    The downside, of course, is that both stocks could move in the opposite direction to what was formerly expected.

    The strategy is liberated from the limitations of an index benchmark and the vagaries of global markets.

    This the reason why this strategy is defined as stock-picking in its absolute form.

    “It sounds trite, but investing is simple and one way of simplifying it is to take out the risk you can’t control,” said Fish.

    Sam Shepherd

    The LIC was managed by Richard Fish and Sam Shepherd who were the fund managers behind the highly successful Bennelong Long Short Equity Fund. That fund produced annual net returns of 18.14% between February 2002 and September 2015. The fund was only open to institutional investors.

    Sam Shepherd joined the team in May 2012,  after 21 years of Australian equities experience.

    Just before he joined the Bennelong Long Short Equity Fund, he was Head of the Melbourne institutional equities desk for Credit Suisse. On this position, he held the research sales, account management, and execution. Earlier, Sam Shepherd was a sales trader and research salesman at JP Morgan.

    The first seven years of his career he worked at Norwich Investment Management. He was a dealer, analyst, and portfolio manager. Sam Shepherd has a Bachelor of Commerce and a Graduate Diploma in Applied Finance and Investment.

    Portfolio Manager, Sam Shepherd, retained portfolio management responsibilities and the management of the team after Richard “Dick” Fish departure. Sam has 24 years of Australian equities experience, with the last five workings alongside Richard at Bennelong Long Short Equity Management (BLSEM).

    Led by Sam Shepherd, BLSEM has a highly experienced team.

    On BLSM official website we found

    “There is no change in the approach to the day-to-day management of the portfolio. Portfolio management is clearly defined and is managed in a highly disciplined way. Decision making is team-based, and that has been the case for a number of years.”

    Richard “Dick” Fish and his business partner Sam Shepherd are an Australian investors dream-team.

    Kerr Neilson

    Kerr Neilson is an Australian investment manager, the co-founder and managing director of Platinum Asset Management. He was born in Johannesburg, South Africa and earned a Bachelor of Commerce degree from the University of Cape Town. Also, one of the best Australian investors.

    Neilson began his financial management job in the investments division of Courtaulds in London.

    But he returned to South Africa in 1973.  Ten years later he moved to Australia to become the head of retail funds management for Bankers Trust Australia. Today it is BT Australia.

    Georg Soros provided him initial backing to establish the Platinum Asset Management fund in 1994.

    Platinum concentrates in international equities and has an estimated $US16 billion in funds under management. Kerr Neilson is a managing director and portfolio manager.

    In 2007, Neilson set 20% of Platinum Asset Management on the Australian Stock Exchange. The 57% of the company’s shares he held were valued at A$2.9 billion. That made him one of Australia’s wealthiest people.

    Neilson is frequently compared to Warren Buffett for his talent to consistently pick high-performing stocks.

    However, in business, not everything is spring and flowers. Bad results during 2012 produced a 16% drop in net profit, essentially due to a 14% decrease in investment income. Neilsen was forced to abstain from a bonus and an increase in his salary. As the major shareholder of Platinum, Neilsen yields A$42 million in dividends during 2012.

    The accent was on renewing the prosperous investment strategy he had used before. This required structuring portfolios of the companies that were experiencing change or mispricing. The reasons can be different, the temporary factors or biases practiced by market participants.

    By investing in such companies around the world, Platinum held really differentiated portfolios and delivered excellent investment returns.

    When his investment philosophy was totally implanted within the team, he resigned as the Chief Investment Officer in 2013. Over time Kerr Neilson stepped out of his various duties and delegate them to other global portfolio managers in the team. With the full approval of the Board, Neilson handed over the role of Chief Executive Officer of the Platinum Group to Andrew Clifford in 2018.  

    Proceeding to work as a full-time executive director of the Platinum Group and a member of Platinum’s investment team, he is completely involved in the business.

    You might like to know who are the best UK investors


    Robert Dobson Millner

    Robert Dobson Millner was born 4 September 1950.

    After leaving the school he acted as a stockbroker for two years. Almost 14 years he farmed in Cowra, New South Wales. In 1984 he entered the family business, Washington H.Soul Pattinson, as a manager. In 1997 he was named deputy chairman of Souls and since 1999 he has been Chairman of the company.

    He is the leader of many big Australian organizations. For example, he is chairman of Washington H. Soul Pattinson, as we mentioned, further, New Hope Coal, Brickworks Limited, Choiseul Investments, and NBN Television.

    Robert D. Millner is a director of Milton Corporation Limited since 1998 and appointed chairman in 2002. Chairman of the Investment and Remuneration Committees. Millner has vast experience in the investment industry.

    Milton Corporation Limited is a publicly owned investment manager. The firm conducts separate portfolios. It invests in the public equity and fixed income markets of Australia. The company also invests in trusts, real estate, and mortgages. Milton Corporation Limited was founded in 1938 and is based in Sydney, Australia.

    He is been called the hardest-working man in corporate Australia.

    Find who are the most successful Indian investors

    Robert D. Millner is also the head of Pitt Capital Partners Ltd. It provides business consulting and advisory services. The Company offers a range of corporate finance advisory services in relation to mergers and acquisitions, equity capital markets, private equity, restructures, and debt funding. Pitt Capital serves customers over Australia.

     

     

  • Modern German Investors

    Modern German Investors

    Modern German Investors 4Who are modern german investors?  Why are they popular? How do they differ from others?

    By Traders-Paradise Team

    Modern German investors escaped traditional limitations. They are truly representatives of modern times. Young enough to understand the requests of modern times. They are strong enough to ignore what is wrong in traditional opinions. And, the most important, modern German investors have the knowledge to build their own empire.

    Oliver Jung is among Modern German investors

    Modern German Investors

    Oliver Jung is one of the modern German investors. He was born on July 5, 1972, in Heidelberg, Germany. As a boy, he spent most of his childhood in Hockenheim in southern Germany.

    Later, he relocated to Karlsruhe.

    He attended the Technische UniversitÀt Karlsruhe, the University of Karlsruhe. When he was 20, he got a degree in computer science.

    As a student, Jung showed interest in Internet technologies. Today, investing is one of his main interests. He participates as founder, the consultant also, in a big number of companies all around the world.

    Jung’s first company was eCommerce consulting “Entory AG’. He founded it in 1997.

    Only 4 years later he sold the company to Deutsche Boerse Group, which is the giant operator of stock exchanges in Germany.

    In that time Jung’s company reached about €100 million of annual sales.

    After this purchasing Jung became a member of the Executive Board of Deutsche Börse Systems AG. He held that position for almost one year, not longer.

    In 2003 he started to invest in internet and mobile companies.

    Form 2004 to 2010 Jung was investor and consultant in various companies in Germany and over the world. Among others, Xing, StudiVZ, Canadian Beyondtherack, Russian KupiVIP, Brazilian Brandsclub, Markafoni from Turkey. He was an investor in Australian Spreets which was sold to Yahoo 2011.

    The other company sold to the bigger one was Brands4Friends. It was a German company sold to eBay and Facebook.

    Jung founded a lot of companies. In 2007, established the consulting company Springstar. Next year, he founded the real estate investment company Awari Capital GmbH. The core of the Awari business is to buy and hold real estate, essentially in Germany.

    He spread his money and influence in Switzerland too. He was a co-founder of Adinvest II, as a part of Adinvest AG, which is the dominant shareholder of Adyen.

    In 2011, Jung scored with Springstar when the company partnered with Airbnb.

    Jung joined Airbnb full-time and dissolved Springstar in 2012.

    He took the main role in Airbnb’s efforts to develop its business in 72 countries. When this project was done, he moved to Houzz. It was 2014.

    Houzz is an online network for home design and home improvement professionals and Jung developed their international business.

    In the same year, Jung was involved as an investor and consultant,  with SpoonRocket, Artsy, Flightcar, iCracked, and Homejoy.

    Jung, modern German investors, is a partner, at Jung-Miropolski, Investment Manager at Adinvest AG and Chief Executive Officer at Awari Capital GmbH.

    His investments are in Lyft, Adinvest, Airbnb, Artsy, BeyondTheRack, Homejoy, Houzz, Wash.io, Tilt, Ticketfly, and many others.

    Elvir Omerbegovic as one of the Modern German investors

    Modern German Investors 1

    Elvir Omerbegovic is one of the modern German investors too.

    He is an Angel Investor. We add him because his life-story is incredibly interesting. Omerbegovic was born in Germany, in Mettmann, in 1979. But his origin is from Bosnia.

    Actually, Elvir Omerbegovic is a German entrepreneur of Serbian– Bosnian descent. His father is from Bosnia, and mother from Serbia.

    He is a German entrepreneur who is largely known as the founder and CEO of the Hip Hop label Selfmade Records and as President of Rap of Universal Music Germany.

    He played basketball. By the age of 20, he was professional in basketball. At age 16 he also played basketball at a High School in Kentucky, the US for one season.

    When he was 20, he stopped professionally in basketball. Elvir enrolled in college and began studying sociology.

    He merited a bachelor’s degree in Political Science, Media, and Sociology. Later, he received a master’s degree in Political Communication.

    He started building his publishing house from the age of 24. The first repertoires, with which he began to gain success, were Kollegah and Farid Bang.

    Elvir’s milestone was In 1999. He met Philipp Dammann during a community service training in Herdecke, Germany. Dammann alias is Flipstar and he was a member of the Hip Hop group Creutzfeld & Jakob.
    Omerbegovic was interested. He began to perform as a rapper under the name Slick One. Flipstar also gave Omerbegovic opening contacts in the German Hip Hop scene.

    In 2003, Omerbegovic was introduced in the song Game Over for the first time on the Creutzfeld & Jakob album “Zwei Mann gegen den Rest’.

    Over the next two years, he recorded contributions to five releases by Selfmade Records.

    On the track Bruderkrieg, a collaboration with Edo Maajka, Bosnian musician, Omerbegovic appeared as a rapper for the last time.

    He established a music label with Philipp Dammann under the name “Selfmade Records.” Initially, the label was only supposed to work as a platform for Dammann’s publicity as Flipstar.

    But soon he spread his business to the other Hip Hop acts in the region.

    In  2014, Elvir Omerbegovic and Maximilian Scharpenack established the Suckit GmbH. They did it with Marco Knauf and Inga Koster, founders of the company true fruits. Suckit specializes in the production of alcoholic water ice, freeze-pops.

    Soon after sales began by the company’s website in April 2014, Suckit sold almost 30,000 units of its products.
    Today, this merchandise is distributed over numerous supermarkets. According to Suckit, 750,000 units of ice were sold in the first two-year. More than 500,00 just in one year, in 2015.
    Next year they hit the new record, 1.4 million units were sold.

    In April 2005, the sampler Schwarzes Gold was released as the first Selfmade Records production.

    At the end of May 2009, Omerbegovic established the fashion brand Pusher Apparel.

    The new fashion products were combined with the marketing efforts of the album “Jung, brutal, gutaussehend”. Rappers Kollegah and Farid Bang promoted new fashion products.

    Pusher Apparel is part of the network of the Bravado Merchandise GmbH, a sub-company of Universal Music Group.

    The product line fundamentally targets sporty male customers between 13 and 28 years of age.

    The interesting part is that sales are exclusively done via the company’s online shop.

    Many German rappers promote this fashion label. In June 2016, Rappers Gzuz and Bonez MC of the 187 Strassenbande signed a cooperation agreement with Pusher Apparel.

    Later, MoTrip, Marteria, Farid Bang, KC Rebel, Schwesta Ewa, 257ers, Favorite, Joko Winterscheidt, Klaas Heufer-Umlauf, and Micaela SchÀfer had shows with the product.

    Why Elvir Omerbegovic is here as one of the modern German investors?

    Because he is a kind of Slumdog Millionaire. He raised in a problematic environment, came from the family with broken roots, but he had the power and strength to fly to the sky.

    Guy Spier is one of the Modern German investors

    Guy Spier

    Guy Spier is a great German value investor and one of the best among modern German investors. He was born in South Africa on February 4, 1966. Spier spent his early years in Iran and Israel. He received a bachelor’s degree from Oxford and an MBA from Harvard. Also, he lived in New York. In 2008 he moved with his family to Zurich.

    Spier is a polyglot thanks to many different countries he lived in.

    His reputation among the value investing community is growing day after day. Spier is well-known for paying $650 000 to have charity lunch with Warren Buffett.

    His 2014 book, “The Education of a Value Investor,” is very popular among investors. It’s one of Amazon’s best-seller.

    Almost three years, from 1988 – 1990, Spier worked at Braxton Associates. Later it became Deloitte Consulting. In 1991, he worked at the European Commission in Brussels.

    Spier started out as a professional money manager in 1997 with $15 million mostly borrowed from family and friends.

    Since then he achieved excellent returns in the S&P 500. In 2011, his profit was 221.6% versus the S&P 500’s 36.7%. That’s an awesome result.

    Spier manages the Aquamarine Fund, an investment partnership inspired by Warren Buffett’s 1950s investment partnerships. He is also a financial commentator in the media, from time to time.

    Aquamarine is fairly restrictive with regards to who it manages money for, and fund information is only distributed by request. Also, the fund inspiration was Buffett’s early investments but Speir is more Benjamin Graham type of investor.

    Meaning Spier prefers traditional deep value investments.

    Just like many other young investors in value investing, Spier’s focus was on Warren Buffett’s investment strategy. It means buying growing companies with powerful moats at fair prices.

    He was really devoted to Buffett’s strategy. He studied every single detail. And he was playing according to that.
    But soo, Spier revealed some errors.

    As Guy Spier explained, Buffett’s strategy has a few major pitfalls.

    “Something I learned during the financial crisis was that when you pay up for a better business, you can suffer greatly when the price people are willing to pay for that business goes down dramatically, as it did in 2008. …I lost more money owning those businesses than I would have if I had owned the right cigar butts…”

    But large declines in price in the periods of bear markets wasn’t the only investment problem that Spier, this modern German investors, detected. He revealed, the GARP strategy also forced investors into doing extreme behavioral errors when investing.

    “If you talk about your stocks, it will affect how you think about them as well as the portfolio decisions you make. At the time, I did not believe it would skew my decision making. But if I go back over the life of Aquamarine Fund and examine my letters to investors, I can see clearly how this created a bias for better businesses, simply because it was more fun to talk about them.”

    This was followed by an admission that he developed a bias for companies that are fun to talk about.

    Say, Buffett was right when calling inflation a ‘corporate tapeworm’.

    So, as a result, we have, emotional prejudices are surely an investor’s tapeworm.

    They make investors overvalue the returns they can expect from specific stock. Also, there can be some misconception about how quick some company will become, or how big profit the business will produce. This trick occurs frequently due to the Halo Effect.

    When investors assume that one single good company’s feature is followed by others, also good.

    The trend to assign or overvalue a spectrum of good features that a company may not truly have.

    For example, you may see the fruit from the South as juicy, sweet, and tastier by virtue of its image. But it may not actually possess any of those attributes.

    The same belief is at play in investing.

    As Guy Spier reveals, you end up paying a large price upfront for a business that is suffering a continual rule of nature.

    And finally, that return on equity will drop. So the company will be far less successful than when you detected it.
    Moreover, the risk-reward correlation may still be in an investor’s benefit, but the company’s margins can face a huge volume of pressure.

    Spier supported firmly Warren Buffett’s principles on Value Investing and capital allocation.

    Today, he also reveals that Value Investing has changed over time.  Well, the reputation and popularity of this style mean that fewer chances are possible to investors. Beliefs that it will work would still be around.
    But the victorious value investor of modern times has to look beyond. Sometimes out-of-the-box.

    And Spier gave that possibility, a critical view on traditional value investing.

    Spier lives in Zurich with his wife and three children.