Trading Mastery with Andrew Barnett

“Am I sure that I’m paying for the business as it is today - not for an excessively rosy expectation of where it might be in the future.”

Guy Spier

Guy makes an important point as many retail investors over pay for stocks, particularly in overhyped IPO’s. It’s important to know the valuation you pay today for a stock matches how the business is performing today and the share price is not flying high based on future expectations.

3 years ago | [YT] | 0

Trading Mastery with Andrew Barnett

Check this out!

Following is an email I received from a client today and this is another great example of a concentrated portfolio of high quality global growth companies outperforming any diversified investment approach that money managers or super funds use.

Hi AB,
I presently have six companies in my portfolio. My investment of $240k is presently up 34% in 17 months.

Apple
Birkshire Hathaway
Costco
Home Depot
Microsoft
Occidental

Kind regards
James

FYI a diversified super fund or managed fund has returned less than half this result over the same period.

If you are sick to death of getting low returns year after year and giving money managers 30% of all your profits over your lifetime to delivery below average performance then get over to our website and register to join me for my next live coaching session.

www.tradingmastery.com

3 years ago | [YT] | 2

Trading Mastery with Andrew Barnett

How much money do you think you will need to retire comfortably?

A recent survey in the US shows most Americans think they will need another 20% more than what they thought they would 3 years ago. And I’d be willing to bet the same survey if ran in Australia would reap the same if not a more pessimistic response.

Most Americans say they now have around 10% less in savings due to the high costs of living. The expected retirement age has also increased by 2.5 years.

40% of respondents said they are worried they won’t have enough for retirement and 25% said they expect to work for longer. (I guarantee more than 90% will end up working for longer)

The responses in the USA would be the same from people surveyed with the same questions all over the world.

Sadly working folk have been earning between 4% & 7% per annum on their investment funds all their life, which is guaranteeing they will work for longer and money managers get rich off their money.

Here’s an example of how someone could retire 10 years earlier if they started to invest in their 40’s and earned just 10% per annum rather than 6%.

A $50,000 starting balance @ 6% per annum with a money manager, adding $5000 per year compounds to $504,141.22 by aged 65.

But the same $50,000 @10% per annum invested independently, adding $5000 per year compounds to $1,130,811.21 by aged 65.

That’s over $1.1 million dollars and double the result.

Did you see the email I posted earlier today that I received from my client James, who has compounded his money at 34% in the last 17 months owning 6 companies he cloned from my portfolio. He is now 5 years ahead of any money manger.

I’ll keep showing mine and my clients results and proving it year after year after year.

3 years ago | [YT] | 3

Trading Mastery with Andrew Barnett

I find it astounding so many smart people can make dumb decisions. Anyone who owns $baba the custodian of your money is the Chinese communist government. Charlie Munger is smart as hell but his insistence about owning $baba is one of his dumbest moves ever.

3 years ago | [YT] | 2

Trading Mastery with Andrew Barnett

The arm chair economic experts and analysts all predicting an implosion of the US economy but yet the unemployment rate keeps going down and the CEO’s of the USA’s biggest banks just said the following.

Bank of America CEO Brian Moynihan: “Consumers are spending, they have money, they are employed and they have good credit.”

JP Morgan’s CEO Jamie Dimon: “Consumers are in very good shape, companies are in very good shape.”

Citibank CEO Jane Fraser: “The US economy remains relatively resilient.”

3 years ago | [YT] | 1

Trading Mastery with Andrew Barnett

Are you a victim of Fee Creep?

Most investors have no idea what fee creep is but it’s eating away at the retirement savings of millions of Australians every day.

Over your working life fee creep steals around 30% of all the profits you earn. You invest the money, you take all the risk and the fund manager nibbles away every year at your account, never delivers anything better than below average and by the time you are 65 they’ve made around 30% of all your investment profits in fees. If you retire with $300,000 the probability is the fee creep on your investments, managed by a money manager has been around 30%.

And all during the years you had your money with that fund or money manager they would never have consistently kept your return in line with the average ASX 200 return. It’s impossible for them to do it because they are mandated in a way they will never on average beat the index consistently.

Just so you don’t think I’m exaggerating let’s do a true comparison that will scare the shit out of many of you and I hope it makes you angry as hell.

To keep things simple lets assume you contribute $5000 to a managed fund and add $2000 per year for 30 years.

The industry average balanced fund return is around 8.0% over 30 years so the end result after 30 years would be $306,220.71.

If you’d simply chosen an index fund instead, not picking stocks, just an index ETF that tracks the overall return of the stock market you would have earned 9.7% per year on average. Using the same $5000 at the beginning and adding $2000 per year your end result would be $391,245.00.

The difference between the two is $84,029.41. So if you chose the “so called expert” money manager they charged you a fortune in fees over 30 years that went into their pocket. But if you’d simply chosen an index ETF you keep all the profits, you get charged a 0.01% annual fee and instead of making an over rated money manager rich (you are just one of millions, do the numbers) you keep all the profits.

I know some of you that have your money with money managers and financial planners hate it when I do these comparisons but the impact on your wealth is massive and you are being hoodwinked. They deliberately make financial markets sound complicated so you leave your money with them, so they can continue to touch you up. And for the wealthy they come up with these “Private Wealth” programs where rich people think they are being treated extra special. Just another scheme to charge more fees and underperform.

For example I’ve compounded my money at 24% on average for the past ten years with a massive tail wind of loose monetary policy. Yes, I was very fortunate but I’ve never once given my money to anyone else to manage and the global growth companies I owned were nothing unique. But they not locally listed ASX stocks.

So let’s assume I only compound my money at half that, 12% for the next 10 years on average.

$1 million compounded at 12% vs $1 million compounded at 8% for the next 10 years.

12% = $3,105,845.21
8% = $2,158,925.00

That’s a $1 MILLION DOLLAR difference. That’s a life changing difference.

And if you ever find yourself thinking a sexy hedge fund might be a good option. Plenty of rich people get sucked into these. Give consideration to this. If you'd invested $1,000 with Buffett in 1965, it would now be worth $4.3 million. However, if Berkshire had been a hedge fund charging a 2% annual fee and a 20% performance fee, out of that $4.3 million; only $300K would have accrued to you, the rest would be earned by the hedge fund.

You can either continue to get jabbed up the you know where, stick your head in the sand and act like it’s not happening or make a change now before it’s too late.

Totally up to you but if you’d like some help then reach out.

3 years ago | [YT] | 2

Trading Mastery with Andrew Barnett

Here’s another investment tip for you.

Heads I Win BIG, Tails I Don’t Lose Much.

I first heard of this when I read legendary investor Mohnish Pabrai’s book The Dhandho Investor, but with due respect to Mohnish he left off the word BIG.

When Mohnish makes an investment he always ensures he is left with the scenario ….heads I win, tails I don’t lose much. But my experience has been that every time I use the value investing principles (keep reading and I’ll tell you what they are) I don’t just win, I win BIG! So if it’s ok with you Mohnish, I’m changing your phrase to Heads I Win BIG, Tails I Don’t Lose Much.

Most people think investing is a 50/50 probability, the same as tossing a coin. This is true if you have no idea what are doing. But if you know what you are doing you can slant the probabilities so far in your favour that you can’t help but end up with the scenario of winning big.

Here’s how to end up with heads I win BIG, tails I don’t lose much.

The method I’m about to share is not used exactly the same way by all the great investors but I am very confident that if they read this post they would agree that what I describe will stack the probabilities so far in your favour, that a portfolio of companies bought this way cannot help but win BIG over time. I have certainly found this to be true and the wealth it has compounded for me over the years and my clients is proof positive that it works.

Here’s what you need to know.

History shows that companies that have a combination of the following three attributes deliver above average returns on investment.

1. A company that has been consistently growing it profits over many years.
2. A company that has been consistently growing dividends or has a large share buyback program.
3. A company that delivers high returns on capital.

When a company has these three attributes I call it the Golden Triangle. The first step in ensuring you have an investment with… heads I win BIG, tails I don’t lose much is to ensure you have a portfolio of Golden Triangle companies.

Just having a portfolio of Golden Triangle companies will massively improve the odds of you winning, but I’m not interested in just winning. I want to ensure when I win, I win BIG! So here is the final piece to the puzzle, the secret sauce you might say.

When you find a company that is a Golden Triangle Company only buy shares if it is heavily discounted.

If you have a portfolio of Golden Triangle companies and you have made each investment when the company is heavily discounted your portfolio overall cannot help but win big over time. You will compound your money at an above average rate.

And the best part of all, the longer you own Golden Triangle companies the bigger you win and the more money you will make. This means that after you buy them you can sit back and do nothing but watch your portfolio grow.

Making something complicated is easy, but making something simple is not easy. This method is simple and incredibly profitable and stacks the probabilities in your favour to win BIG.

What I do for my clients is give them a list of Golden Triangle companies that are heavily discounted. They don’t need to do any research, I tell them which companies meet the criteria, all they need to do is click the buy button on the ones they want to own. I’ve even got a step by step formula that now tells them how many shares they should consider buying of each company for the amount of money they have. It could not be simpler. And for those clients who want to learn how to find these companies I teach them.

I’m running a live coaching session on Monday evening starting at 7.30pm AEDT if you are interested to learn more. I’m going to show 3 Golden Triangle companies that are heavily discounted right now and for clients you’ll receive an updated list of 25 Golden Triangle companies in Monday’s daily report.

Register at www.tradingmastery.com if you are not a client and if there are still some spots available you’ll receive a link via email to log in.

(Do not register if you are already a client, you’ll receive your own special video update and list of 25 companies on Monday)

3 years ago | [YT] | 4

Trading Mastery with Andrew Barnett

Not understanding a business you own is like marrying after the first date.

#stocks #investing #TradingMastery

3 years ago | [YT] | 3

Trading Mastery with Andrew Barnett

Great investors just find businesses they know well, businesses they know will endure, businesses that have longevity. They buy them at fair prices and they just hang on. It’s that simple.

Very few start ups make it past 5-10 years and very few businesses make it past 20 years. Great investors know how to buy businesses with longevity that will steadily grow their earnings for 10-20 years and beyond.

3 years ago | [YT] | 3

Trading Mastery with Andrew Barnett

Markets will find a floor and rally again when inflation begins to decline. End of story.

Until then…bargains are everywhere.

#stocktips #investing #stocks

3 years ago | [YT] | 2