1/ A bit more than a year ago I left my "safe" job to focus full-time on investing; what I truly enjoy.
Despite being active at Best Anchor Stocks for all this time, I regularly come across people who have no idea about this project, so let me explain it briefly! π
Despite being active at Best Anchor Stocks for all this time, I regularly come across people who have no idea about this project, so let me explain it briefly! π
2/ The pandemic period brought quite a bit of volatility, and while many thought of this volatility like a one-off, truth is that volatility has been at the core of financial markets for a long time.
There are always clouds in the sky:
There are always clouds in the sky:
3/ Where does this volatility come from? Mainly from one of the two variables that move stock prices:
a. Fundamentals (expected cash flows)
b. Investor expectations (ie., the price tag investors give to those expected cash flows)
a. Fundamentals (expected cash flows)
b. Investor expectations (ie., the price tag investors give to those expected cash flows)
4/ Simply put, what a company is worth today is a function of its expected cash flows and how the market values those cash flows today.
In most cases, (a) does not change much over the ST, but (b) swings pretty violently, leading to significant volatility
In most cases, (a) does not change much over the ST, but (b) swings pretty violently, leading to significant volatility
5/ But...does volatility really matter as long as we get to the desired destination? Most people will say it doesn't, but I believe it does, to an extent.
Let me explain why.
Let me explain why.
6/ I believe most people focus on returns, when they should focus on risk-adjusted returns. This means we should not only look at returns but what it took to get those returns and how much risk we took to achieve them
7/ There are ultimately two things necessary to enjoy worthwhile returns:
(1) Finding high quality companies at reasonable prices
(2) Holding on to these companies through thick and thin, allowing them to compound
Many people struggle with the second due to volatility
(1) Finding high quality companies at reasonable prices
(2) Holding on to these companies through thick and thin, allowing them to compound
Many people struggle with the second due to volatility
8/ This is why Best Anchor Stocks was born.
Volatility is not risk for the LT investor, but it does lead to a significant risk: selling soon.
The goal of BAS is to find high-quality companies that are "easy" to hold, hopefully leading over time to good risk-adjusted returns.
Volatility is not risk for the LT investor, but it does lead to a significant risk: selling soon.
The goal of BAS is to find high-quality companies that are "easy" to hold, hopefully leading over time to good risk-adjusted returns.
9/ This translates into a goal of finding high-quality companies where extreme changes of sentiment (and thus volatility) are rare.
Of course, there's no way to look forward and estimate volatility, but stable financials and strong moats are a good starting point
Of course, there's no way to look forward and estimate volatility, but stable financials and strong moats are a good starting point
10/ The portfolio is currently made up of 13 companies, with the goal of getting to somewhere between 15 and 20. This is a number that allows me to:
Β· Be sufficiently diversified
Β· Track all of them closely
They are distributed as follows across industries:
Β· Be sufficiently diversified
Β· Track all of them closely
They are distributed as follows across industries:
11/ All of these companies comply with the following characteristics (we call them traits) and are screened for them.
12/ The portfolio has been built over time (it's still in construction) and I invest my money in it with total transparency.
This has been the performance since inception (14th January 2022):
This has been the performance since inception (14th January 2022):
13/ Note that only one year and a half has gone by, and this is not (in my view) a sufficiently large period to judge performance. The goal is to obtain good results over the long term (minimum 5 years)
14/ How the service works is straightforward. Every week, you'll get articles on companies in the portfolio, and to a lesser extent, companies in the watchlist.
Articles can also be of general investment topics.
Articles can also be of general investment topics.
15/ Then at the end of the week I upload the News of the week, with relevant company-specific news and a short market commentary.
A subscription also gets you access to the community and other perks such as webinars.
A subscription also gets you access to the community and other perks such as webinars.
16/ Important to consider that the companies in the portfolio do not constitute investment advice. I do research on these companies, invest in them, and help subs building conviction, but what they do with their money is up to them.
17/ Sorry for the long thread, although I thought it was necessary to explain the why behind Best Anchor Stocks and what it offers.
If you feel this could interest you, don't forget there's a two-week free trial and my DMs are open
seekingalpha.com
If you feel this could interest you, don't forget there's a two-week free trial and my DMs are open
seekingalpha.com
17/ If you want to read articles before starting the free trial, I have uploaded a bunch of free articles too.
Company-specific articles can be found here: seekingalpha.com
General investing articles can be found here: bestanchorstocks.com
Company-specific articles can be found here: seekingalpha.com
General investing articles can be found here: bestanchorstocks.com
bestanchorstocks.com
Best Anchor Stocks | Substack
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18/ Also, word of mouth is also important in this industry, so if you feel it might interest someone you know, feel free to send them my contact or share this thread with them.
Have a great day and week!
Have a great day and week!
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