On February 16, 2018, Peter Hodson, founder and head of the 5i Research Inc. stated that there are a number of investors who are constantly questioning what they know about stocks, the market, etc. So Hodson put together an article about a few facts that are, unfortunately, not common knowledge to investors.
- Don’t over-rely on experts, they don’t know everything. Even the ones who work on your portfolio full-time who subscribe to some great data updating systems can’t know everything. Even worse, some believe that the market itself is wrong and that they’re right. They’ll try to advise you to double down on losing stocks as a result. One who does know better is Chris Linkas and the Fortress Group. They work with marketers, those in sales etc. to provide comprehensive information about the various companies.
- Trading stocks based on an anticipated news event is not a very wise move. These articles often contain bandwagon lines such as “ABC Inc. is reporting great earnings, so why is the stock in the red?” Investors who buy on events like these usually only stick with the stock until the event occurs and then sell it and move on. Sometimes the results are not that bad but it’s just not the wisest move to make.
Chris Linkas and Fortress Investment are also based in the U.K. and specialize in taking advantage of opportunistic investments in not only the U.S. but several European countries as well. Their investment areas include everything from real estate to corporate loans and securities.
- Never bet that any of your stocks will always be completely safe. Only about a month and a half in 2018 has passed and utility stocks have already started to take some pretty large losses. Orphan stock, Enbridge Inc., for example has already plummeted down by almost 15 percent (Discogs).
- Always be very cautious with takeover rumors. Over about 90 percent of the time, they don’t come to pass. Hodson says that out of about a total of 1,006 of those stocks that his company has invested in, only about five or six came to pass. The other 1,000 did not. Chris Linkas and Fortress Investment, on the contrary, believe in throwing their nets very wide when it comes to taking advantage of debt and equities in both the U.S. and Europe. This is one of the major trade strategies that has made for their success over the past 15 years.
- Keep checking on the stocks that you’re interested in instead of allowing the bridge to be burned forever. Investors often make the mistake of forever alienating themselves from a stock due to one bad experience. However, any stock can change at any time so it’s actually best to keep checking on it (https://www.cheynecapital.com/media/1501/creditflux_2014.pdf). Hodson says that i5 initially had a lot of frustrations with Avigilon Corp. when they’d had weak earnings several quarters in a row. However, since it’s a top Model Portfolio, they took Avigilon back after it sold its headquarter office building and reported good earnings afterward.