GLEN ARNOLD INVESTMENTS
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Having an edge, enough diversification, low costs and respect for the crowd

25/11/2021

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  1. Don’t invest where you have no discernible edge. Only invest in sectors where you have a superior knowledge of the business or can, with effort, gain that knowledge over time. For example, you might want to avoid technology shares. Some industries are much easier to understand than others. Do not try to jump over six foot hurdles when one foot ones are around.
  1. Don’t over-diversify
Some degree of diversification is necessary to lower risk and bolster performance, yet to over-diversify could lead to hobbled performance.
John Neff said ‘by playing it safe, you can make a portfolio so pablum-like that you don’t get any sizzle.  You can diversify yourself into mediocrity.’
You do not have to hold shares in every sector of the economy; merely a reasonable spread, staying within your circle of competence and in areas of the market where there is evidence of undervaluation.
It is stupid to own, for instance, turbine companies if the market is over-excited about this sector.
A dozen or so companies is usually sufficient to provide the private investor with enough diversification. A mutual fund, such as the one I’ll be running next year, needs to be more diversified to be able to withstand a flood of client redemptions at a time of market turbulence to avoid too much dependence on rapid liquidation from a mere handful of stocks; but still I expect to have only around 20-25 companies.
  1. Don’t incur unnecessary expense
Try to keep running c
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    Prof. Glen Arnold

    I'm a full-time investor running my portfolio from peaceful Leicestershire countryside. I also happen to be UK´s best selling investment book author and a Financial Times Best selling author.

    Originally, I wrote all my ideas out in full on this website. Now that ADVFN publish them they are entitled to display the full version for six months – you can see them here. Thus can I only post the first few paragraphs here for anything younger than six months.

    I write 2 to 3 newsletters per week - investing is about making the right decisions, not many decisions.

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In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long-run, the market is a weighing machine.  Benjamin Graham




  • About
  • Newsletter
  • Books
    • My Books
    • Other Books
  • Blog
  • Portfolio
    • Buffett-style
    • Modified price earnings ratio
    • Net Current Asset Value
  • Resources
    • glossary of investment terms >
      • A - B
      • C
      • D - E
      • F - G
      • H - I - J - K
      • L - M - N
      • O - P
      • Q - R
      • S
      • T - U - V - W - Y - Z
    • TOP 10 TIPS FOR INVESTORS