GLEN ARNOLD INVESTMENTS
  • 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

The value school of thought has many faculties

20/10/2021

0 Comments

 
​There are a number of different types of value shares. I've discussed many times the approaches of Benjamin Graham and Warren Buffett, and, of course, my own as applied to contemporary UK shares. Today we look at the five categories Anthony Bolton concentrated on.
Recovery shares. 
These are businesses that have been performing poorly for quite some time, but there is good reason to believe that matters are about to improve.
Investors, generally, like to be associated with companies that are doing well, which can lead to those in trouble receiving little attention. When a change for the better occurs, most investors miss their chance to invest at a low valuation.
Change can come about because of new management, restructuring or a refinancing.
One area where Bolton has done well is in purchasing shares coming out of bankruptcy, because these companies tend to be completely ignored by most equity institutional investors.
Recovery shares must be split into two groups: those that have a strong economic franchise and those that do not.  Only go for the good ones – poor franchise businesses will never recover.
With recovery shares Bolton usually takes a small stake to start with – it is easy to be too early – then as his conviction grows that the worst is over, he adds to the holding.
Unrecognised growth. 
This could be in areas unfamiliar to most investors, such as an obscure industry.
Another possibility is the firm has a terrific division hidden within the company by the less attractive divisions (e.g., Nokia).
Valuation anomalies. 
For example, a share is the cheapest in its sector when it does not deserve to be.
Another possibility is that those shares with few trades become underpriced because the market tends to over-price the highly liquid shares and underprice illiquidity.
Bolton agrees with Peter Lynch that firms that sound dull, ridiculous, depressing or doing something disagreeable are disregarded and not owned by institutions.
‘I have always started my search amongst the stocks that
0 Comments



Leave a Reply.

    Picture

    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.

    Categories

    All
    Berkshire Hathaway (NYSE:BRK.A)
    Caffyns
    Capital And Counties
    Character Group
    Charlie Munger
    Connect Group
    Daejan-lsedjan
    Dewhurst-lsedwhta
    Highcroft
    Investment-ideas
    Investment Philosophy
    John Templeton
    J Smart
    McCarthy And Stone
    MS International
    Orchard Funding
    Samuel Heath
    Tandem
    TClarke (LSE:CTO)
    Town Centre Securities
    Wynnstay

    Archives

    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020

    RSS Feed

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