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Hello and welcome to this new video from Luca's paper on the stock market. Today I wanted to talk to you about Michael Belli's investment strategy. I recently came across an article written by Michael Berry, "Prohibited Masses of Demons" in the 2000s and 2001s, where he himself explains his investment strategy in detail, also giving some examples before starting.
However, I want to ask you to leave a nice live stream and write to the channel so as to support his growth. Regarding his investment strategy, I will first briefly explain it and then demonstrate the details. I'll look at the MSN Money article where I explained it in a very detailed way. First of all, Michael Berry shows little interest in the overall market.
He does n't care if it's overvalued, undervalued, and so on. He focuses only on the individual stocks he buys. His only catalyst is the value, which is not the background teaching. In short, we can say that when the stock is sufficiently undervalued, then don't worry about anything else. Focus on the cash flow rather than on the price.
In fact, if you look at the stocks he owns or is afraid to buy, they still have a divine relationship between Inter press malware free cash flow very low typically lower than Vieri stops us instead you find diversification prefers to have between 12 and 18 stocks which for him guarantee a good psychological security if we can say so our years using some technical analysis techniques that I will post shortly these practices on some key points of his analysis we will now see the article by ms le mode where he explains in detail his strategy let's start so my strategy is not very complex try to buy unpopular stocks when they seem like road accidents and sell them when they have been cleaned up a bit managing my portfolio as a whole is as important as choosing the stocks well and if I manage to do both things well I know that I will be successful my weapon of choice as a stock picker and research is in fact of fundamental importance for me to understand the value of a company before spending a cent I really have no choice in this since I first read the books Big Bang RAM I felt as if I was born to bathe investor all my stocks are based on the concept of margin of safety introduced to the world by the book security analysis that Graham has I've written with David Dodd, but from now on, my own version of their techniques.
The bottom line is that I want to protect myself from the lows to prevent permanent capital losses. I'm not very interested in the general level of the markets after restrictions on potential investments. These can be large-cap, small-cap, medium-cap, or micro-cap stocks, both technological and non- technological.
I don't care if I can find value in them. It will become a candidate for my portfolio. It seems silly to me, in fact, to put limitations on my options. However, I've discovered that in general the market likes to throw the baby out with the bathwater, so I find outside of the favorable industries particularly fertile ground for the best stocks in a big fight.
The MN MSN Monet Central website is a good tool for discovering these deals. As for determining whether the stock is at a discount, I usually focus on free cash flow and enterprise value. Free cash flow is simply the cash flow that the company generates from its operations, which it frees up to spend as value after it has satisfied its basic needs, such as repaying debt and expenses for the maintenance of its assets, such as its plants, and possibly some dividends.
As for enterprise value, I've talked about it. I'll go into more detail in this video that I'll leave you at this link. Take a look at it anyway, the Inter Press, but simply given by the sum of the market capitalization minus liquidity plus debt. I usually screen through a large number of companies by looking at the Enterprise Value/EBITDA ratio, even if this value differs based on the company and its position within the economic cycle.
If a company passes this screening, I study it in more detail to determine the most accurate price and value the company. When I do this, I take into account the off-balance sheet item and the true free cash flow. I tend to ignore the P&L and the return, where it is a risky and unstable situation. I prefer low debt and am careful to adjust the book value to a realistic number.
I also invest in special occasions, i.e. rare birds, such as arbitrage opportunities, companies that sell for less than two- thirds of the net value, which is given by the difference between the receivables minus total liabilities. I happily take risks with Warren Buffett's favorite companies, those with a great competitive advantage and a proven and stable return on invested capital, as long as they are available at a good price.
These can also include technology companies if I can understand their business. But obviously all these types of investments are rare birds and when found they deserve a very long prison term. Good portfolio management is not just about choosing stocks but also requires answering some very important questions: what is the optimal number of stocks to buy, when to sell, you need to pay attention to diversification across different industries and between cyclical and non-cyclical ones, should I care about taxes?
As for my investment decision, a low turnover is a goal. Most of the answers to these questions are a subjective choice, so there is no need to justify yourself if one choice is different from another. I like to hold between 12 and 18 stocks diversified across various depressed industries and I tend to cover all my liquidity.
This number seems to give me enough room for my best ideas while reducing my volatility, although I don't feel that volatility is in any way linked to risk, but as you can see, this is a school problem, so I don't need extra stress. Even the tax issue is not of primary importance to me. I know that my dear portfolio generally turns over just over 50 percent per year and So the long- term benefits of the taxes of a portfolio with step turnover practically disappear.
As far as the vice-president is concerned, when to buy risk some technical analysis tools in my strategy I prefer to buy companies whose price is not higher than 10-15 percent of the price that had as lows of the last 52 weeks. This price has indeed proven to offer some support. This is the opposite side of me.
And if a nation outside the deceleration described above breaks these new lows in most cases, cutting losses. This is the practical part. I don't see fundamental analysis as infallible, rather I see it as a way of putting the odds on my side. Although I don't recognize that the market is efficient, I don't even believe that the market is perfectly inefficient.
In fact, insiders lose information. For some analysts, they distribute illegal formations to a select few. Let's say that's how the price of shares can reflect the most recent information. I, as a fundamental analyst, discover them in the end. Investing is neither a science nor an art, but it is a scientific art.
Well, that's all for Michael Berry's strategy. I'll leave you the link in description because in this article there are also some examples of shares that he bought it shows a little how he advanced them unfortunately but in English so maybe some people might find it a little boring but in my opinion it is worth spending some time to understand some operations well for this video that's all I hope you found it interesting if so don't forget to leave a nice light and subscribe to the channel to stay updated for when my next video comes out bye
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