Introduction and Expectations for this Blog
Investor discussing small and medium cap companies around the world.
Welcome to Patches AKF. I plan to write as frequently as I can find compelling ideas, which, to be honest, isn’t all that often. Some posts will simply be additional information about ideas already discussed. 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 appreciate any and all constructive feedback and pushback on my posts and ideas. I usually own shares, at the time of writing, of companies discussed on this blog. Nothing I write should be considered investment advice. I post updates and thoughts more regularly on X (Twitter) at @PatchesAKF
Please share and invite others to subscribe if you find these posts valuable.
Personal Investment Style: 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, that the intrinsic value is actually below the price paid. My investment time frame is 3-7 years, and I try to focus on information that will be relevant throughout such a time frame (information with a “shelf life”). 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.
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 (especially regarding capital allocation), 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 usually own shares, at the time of writing, of companies discussed on this blog. I write articles myself, expressing my own opinions. I have no business relationship with any company mentioned on this blog. There are no plans to provide updates on my buying or selling activities for each stock. I may buy or sell shares of the companies discussed on this blog without notice for any reason at any time.
Disclaimer: All information 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 opinion and experience, it should not be considered professional financial investment advice. These ideas should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. My thoughts and opinions will change from time to time as I learn and accumulate more information. I am under no obligation to publically update my thoughts and opinions.