How to Value Shares and Outperform the Market
A simple, new and effective approach to value investing
Published on 7. July 2011
Book
Paperback/Softback
286 pages
978-0-85719-047-5 (ISBN)
Description
The simplest way to make money in the stock market is to buy shares when they are cheap and make profits when their prices increase. This technique is known as value investing and is the creed of the world's most successful investor, Warren Buffett. But how do you know when a share price is cheap?
This book explains in simple terms how you can develop your own UK share and FTSE100 valuation spreadsheets to calculate share and market valuations. Comparing the valuations to current market prices reveals when shares are underpriced and produces calibrated buy and sell signals. The FTSE100 system, for example, indicates the periods when you should be invested in the FTSE100 and the periods when you should not be. Since 1984 the in-periods have produced 94 times more capital growth than the out-periods.
The new valuation system is the heart of this complete practical guide for managing your own investments. It shows how you should be able to double the value of your long-term investments purely through avoiding high commercial fund management fees. Using the new valuation system should help you do a lot better than this and, for example, secure a pension up to eight times larger than that provided by commercial managers.
As well as providing comprehensive information about the practical and profitable ways in which you can use the new valuation system, this book is a complete toolkit for creating personal wealth through UK equity investment. It includes risk controls, tax breaks, free information sources and recommendations on the best service providers. In short this book is your first step along the road to financial security.
This book explains in simple terms how you can develop your own UK share and FTSE100 valuation spreadsheets to calculate share and market valuations. Comparing the valuations to current market prices reveals when shares are underpriced and produces calibrated buy and sell signals. The FTSE100 system, for example, indicates the periods when you should be invested in the FTSE100 and the periods when you should not be. Since 1984 the in-periods have produced 94 times more capital growth than the out-periods.
The new valuation system is the heart of this complete practical guide for managing your own investments. It shows how you should be able to double the value of your long-term investments purely through avoiding high commercial fund management fees. Using the new valuation system should help you do a lot better than this and, for example, secure a pension up to eight times larger than that provided by commercial managers.
As well as providing comprehensive information about the practical and profitable ways in which you can use the new valuation system, this book is a complete toolkit for creating personal wealth through UK equity investment. It includes risk controls, tax breaks, free information sources and recommendations on the best service providers. In short this book is your first step along the road to financial security.
Reviews / Votes
This is an excellent - and very readable - guide to the principles and practice of valuing shares from an expert with a first-rate record of identifying stock-market opportunities. A must-read for both aspiring and established value investors. -- Dominic Picarda, Associate Editor, Investors Chronicle A raft of useful advice...a useful aid to investors of all levels of expertise. Not many books aimed at the private investor actually explain how to create and apply valuation models in such a simple manner, so for that reason alone the book is well worth a read. -- Spreadbet magazineMore details
Language
English
Place of publication
Petersfield
United Kingdom
Target group
Interest Age: From 18 years
Product notice
Paperback (UK-trade)
Illustrations
black & white illustrations
Dimensions
Height: 234 mm
Width: 156 mm
Thickness: 15 mm
Weight
408 gr
ISBN-13
978-0-85719-047-5 (9780857190475)
Copyright in bibliographic data and cover images is held by Nielsen Book Services Limited or by the publishers or by their respective licensors: all rights reserved.
Schweitzer Classification
Other editions
Additional editions
Glenn Martin
How to Value Shares and Outperform the Market
A simple, new and effective approach to value investing
E-Book
11/2011
1st Edition
Harriman House
€26.49
Available for download
Person
After graduating from Wadham College, Oxford, Glenn Martin started a career in the City. Over 34 years he worked for a number of financial institutions. For the latter part of this career he worked as Chief Information Officer for investment banks. In 2004 he won the Banking Technology Award for the Best IT Operational Achievement. As a successful private investor, in 1994 Glenn developed a system for calculating the intrinsic value of the FTSE 100 and of individual UK shares. When the system proved reliable, he established ShareMaestro Limited in 2006 to package and promote the system. ShareMaestro (www.sharemaestro.co.uk) has received very positive reviews in the financial press. For example, in the business section of the Daily Telegraph, Tom Stevenson said: "ShareMaestro ticks all the right boxes in my holy grail quest." After his family and investment, Glenn's main interests are tennis, travel and drumming.
Content
Acknowledgements Risk and copyright warnings Preface Prologue: The Birth of My New Valuation System PART I - CRITICAL INVESTMENT CHOICES 1. Asset Selection - Choosing Equities The outperformance of other assets by equities Index-linked investments The reason for equity outperformance 2. Why You Should Manage Your Own Funds Fund management options The impact of fees on long-term fund values The underperformance of commercial funds Better returns from a smarter approach PART II - INTRODUCTION TO VALUE INVESTING 3. What Is Value Investing? The principles of value investing Origins of value investing Traditional value investing approaches and their weaknesses Value investing and growth investing 4. Other Approaches to Investing 1. Technical analysis 2. Event-based investing 5. My New Approach to Value Investing The sources of value A five-year investment period Dividends at the heart of the process The detailed steps to determine current value 6. The Superior Returns You Can Expect from Using the System Effectively The long-term returns achieved by the ShareMaestro funds Building wealth through superior, long-term compound returns What returns to expect from a share portfolio PART III - THE NEW VALUATION SYSTEM 7. A Step-By-Step Guide to Valuing the Market Input data Results The final valuation Setting up a master valuation sheet The nature of the input data The reliability of the System's FTSE100 valuations 8. Using the System's Market Valuations as Buy and Sell Signals Extreme signals The optimum buy and sell signals for the FTSE100 Validation of the buy and sell signals The importance of the FTSE100 dividend 9. A Step-By-Step Guide to Valuing Individual Shares A more difficult task than valuing the market Input data 104 Results The final valuation Setting up a master share valuation sheet 10. Testing Different Valuation Scenarios Altering inputs in the FTSE100 valuation Altering inputs in the valuation of individual shares Identifying one-way bets Value-buying rather than random-buying substantially increases your chances of success PART IV - PUTTING THE SYSTEM INTO PRACTICE 11. Medium-Risk, High-Return Strategy The principle of the strategy FTSE100 ETF Strategy Detailed track record of the strategy Trading the FTSE250 to get even greater returns 12. Running Your Own Share Portfolio Successfully 1. Time your entry to the market 2. Draw up a shortlist of shares 3. Select shares for investment 4. Limit risk 5. Set up email alerts for the shares in your portfolio 6. Review progress and take appropriate action Advantages of the share portfolio management strategy 13. Optimising Share Selection 1. Qualitative evaluation techniques 2. Quantitative evaluation techniques 14. Transforming Your Pension Prospects Introduction Why most young workers face pensions penury How to escape pensions penury Pension practicalities 15. Evaluating Fixed-Rate, Five-Year Cash Investments Basic rate taxpayers Higher rate taxpayers 16. Evaluating Structured Product Investments Example of stress-testing a structured product 17. High-Risk, Stellar Return Strategy Covered warrants FTSE100 covered warrants strategy Financial spread bet strategy A possible modification to stop losses PART V - INVESTMENT ESSENTIALS 18. Establishing Your Investment Objectives Determining and monitoring your overall investment objectives Your other investment objectives Setting your investment targets Freeing up money for investment 19. Taking Advantage of Tax Breaks Self-Invested Personal Pensions (SIPPs) Individual Savings Accounts (ISAs) Additional Voluntary Contributions (AVCs) Financial spread betting Other allowances and planning devices 20. The Best Service Providers 1. Current account 2. Instant-access interest-bearing account 3. ISA provider 4. SIPP provider 5. Online broker 6. Covered warrants 7. Financial spread betting 8. ShareMaestro 9. ShareScope 21. Key Risk Controls Manage your own funds Do not be a passive investor Use your parachute Use stop-losses Investing in individual shares Make use of tax breaks Monitor credit risk Never put all your eggs in a high-risk basket Monitor the FTSE100 dividend growth trend Epilogue Appendices Appendix 1 - Free Web Information Sources Appendix 2 - Glossary of Terms Index