Rock ‘n’ Roll Investing Strats
Investing ‘thought’ is heavily influenced by dusty old books. We love these books and we love their Superinvesting authors, Peter Lynch, Bruce Greenwald, and Warren Buffett, but some argue they represent an overhang of past ideas. Their market methods have been co-adopted by the masses, and now it’s tough to squeeze out a competitive edge.
The usual stuff drives profitable portfolios on the Invstr Fantasy League today; investing in what you know, and investing with a wide margin of safety. However, it’s also become cool to get creative as these ancient authors fade out. We have folks in our community engineering differentiated market strategies, unafraid of outlawed ideas!
For example, many still go for long-term value investments – low maintenance – low volatility, but it makes sense to rotate into shorter-term positions on the eve of potential catalysts.
Think of a catalyst as something that tips off excited investors about a big payday ahead. It jolts an undervalued stock to revert to its fair value, and investing around catalytic events can put you in control of risk and time.
There are catalysts that trigger more catalysts, and catalysts that have obvious hedges. This approach gets you thinking about more knock-on investment ideas. It could be a quarterly earnings release, a stock relisting, an investor roadshow by management, some new analyst coverage, or just some regulatory approval. Anything’s possible!
You can sometimes find stocks undervalued for reasons unrelated to business performance, seriously, and you can keep all the variables within one frame. There’s less getting overwhelmed with multi-year forecasts, as this makes for simpler investing; quicker situations.
It’s exciting to duck and weave between oil crises, trade wars, commodity crunches, and elections. Call this another string to your investing bow. Rock-n’-roll investing, baby!
