Hi - I’m Patches and this is my investing blog. Below I want to briefly discuss how I approach investing and the purpose of this blog. I plan to write as frequently as I can find compelling ideas, which, to be honest, isn’t all that often. I appreciate any and all constructive feedback and pushback you may have on my posts and ideas.
I attempt long-term, intelligent investing; not value investing or growth investing, just intelligent investing. Intelligent investing simply means buying securities that offer an attractive reward-to-risk ratio. Reward is the return on investment if the share price reaches my estimate of intrinsic value. Risk is the possibility of losing money; that is, the intrinsic value is actually below the price paid. My investment time frame is 3-7 years. Identifiable investments with attractive reward-to-risk ratios are rare. If opportunities were obvious and abundant, other investors would buy until the price no longer reflected an attractive investment. The purpose of this blog is to share my research with a wider community, in hopes of receiving constructive feedback and bringing greater awareness to what I believe are attractive investment opportunities. I own shares, at the time of writing, in each company discussed on this blog. Nothing I write should be considered investment advice.
Structure of posts: Every losing investments contains at least one of the following characteristics: low quality business model, low quality balance sheet, low quality management team (from a capital allocation perspective), or low quality valuation. Not every investment that contains one of these characteristics is a loser, but all losing investments contain at least one of these characteristics. Each investment is different and the importance of one characteristic for a specific investment depends on how it measures in the other characteristics. For example, balance sheet and valuation are extremely important for investments in low quality business models, but less so for investments in high quality business models. Moreover, these characteristics are not black and white. Characteristics fall on a quality spectrum and can be compared across investments. By analyzing these characteristics for each potential investment, we can create an investment quality spectrum. The higher an investment falls on the spectrum, the lower its chances of being a loser. By avoiding low quality investments, we reduce our chances of investment losses. Therefore, my posts will focus on these four characteristics.
Disclosure: I have a long position in the companies discussed in my posts. I wrote the posts myself, and they express my own opinions. I am not receiving compensation for these posts. I have no business relationship with any company mentioned in these posts.
Disclaimer: All information and data on this site is for informational purposes only. I make no representations as to the accuracy, completeness, suitability, or validity, of any information. I will not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. Because the information is based on my personal opinion and experience, it should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. My thoughts and opinions will also change from time to time as I learn and accumulate more knowledge.
