My Approach to Investing
Summary
I focus my efforts on small and mid-sized companies searching for those where the growth prospects are not reflected in the share price. I am disciplined about the valuation I am prepared to pay; I don’t like to pay over 20x forecast earnings and favour companies that are paying a growing dividend and have a prospective dividend yield of at least 2.0%. I search for companies generating strong cash flow and if not having net cash, then debt levels that is low to moderate. Where possible I like to meet management and understand what makes them tick and if they have a decent stake in the business so much the better; our interests are aligned! I like companies that are beating expectations and earnings forecasts are being upgraded. Ultimately I am looking for the “double whammy” that comes from a re-rating and from faster than expected earnings growth. Having found a potential investment I look at the share price chart as it can help with timing; so often resistance and support levels work. I size a position based on my assessment of the potential Risk and Reward of the stock. I hold between 20 and 30 holdings, making use of investment trusts for overseas or thematic exposure.
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The most important number to me is the return of the Portfolio! I try not to get too emotionally involved with individual companies; if I cut a holding and it immediately bounces, so be it. All that matters is the return of the Portfolio, each month, each year, each decade!
I invest principally in the UK
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I invest mainly in UK stocks as that is where I have gained my experience. There are clearly opportunities to invest in overseas companies, and it is fair to say that it is now much easier to get the information you need. I think that for a private investor, such as myself, with limited time resources, it is better not to spread my net too wide. For me, it makes sense to focus my efforts on a market where I have experience and familiarity.
I focus on mid and small-sized companies
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I focus on mid and small-sized companies but not exclusively.
The FTSE 100 Index comprises the largest 100 companies and by value accounts for around 70% of the UK market, The FTSE 250, (the next 250 companies) accounts for about 25% of the market by value, and the FTSE Small Cap, FTSE Fledgling and FTSE AIM, the remainder.
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The table below shows the percentage returns over 1, 3, 5, and 10 years to 31st December 2020
My Approach to Investing
Summary
I focus my efforts on small and mid-sized companies searching for those where the growth prospects are not reflected in the share price. I am disciplined about the valuation I am prepared to pay; I don’t like to pay over 20x forecast earnings and favour companies that are paying a growing dividend and have a prospective dividend yield of at least 2.0%. I search for companies generating strong cash flow and if not having net cash, then debt levels that is low to moderate. Where possible I like to meet management and understand what makes them tick and if they have a decent stake in the business so much the better; our interests are aligned! I like companies that are beating expectations and earnings forecasts are being upgraded. Ultimately I am looking for the “double whammy” that comes from a re-rating and from faster than expected earnings growth. Having found a potential investment I look at the share price chart as it can help with timing; so often resistance and support levels work. I size a position based on my assessment of the potential Risk and Reward of the stock. I hold between 20 and 30 holdings, making use of investment trusts for overseas or thematic exposure.
​
The most important number to me is the return of the Portfolio! I try not to get too emotionally involved with individual companies; if I cut a holding and it immediately bounces, so be it. All that matters is the return of the Portfolio, each month, each year, each decade!
I invest principally in the UK
​
I invest mainly in UK stocks as that is where I have gained my experience. There are clearly opportunities to invest in overseas companies, and it is fair to say that it is now much easier to get the information you need. I think that for a private investor, such as myself, with limited time resources, it is better not to spread my net too wide. For me, it makes sense to focus my efforts on a market where I have experience and familiarity.
I focus on mid and small-sized companies
​
I focus on mid and small-sized companies but not exclusively.
The FTSE 100 Index comprises the largest 100 companies and by value accounts for around 70% of the UK market, The FTSE 250, (the next 250 companies) accounts for about 25% of the market by value, and the FTSE Small Cap, FTSE Fledgling and FTSE AIM, the remainder.
​
The table below shows the percentage returns over 1, 3, 5, and 10 years to 31st December 2020
ABOUT ME
I launched this website in January 2012 so that I could share with other investors how I manage my investment portfolio; the JIC Portfolio.
There is complete transparency with the current portfolio and all transactions shown. I explain all trades through my blog and hope the site provides food for thought to more experienced investors as well as helping those who are new to managing their own portfolios. I believe JohnsInvestmentChronicle is unique: There are plenty of “tipsters” who will remind you of the “good ones” and quietly forget the disasters; I do not have that luxury as the Portfolio is there for all to see, backed with real money; mine! I have to confront my mistakes and deal with them; there is no hiding place! Above all, this is a true expose of the trials and tribulations of a private investor!
TESTIMONIALS
I follow your chronicle and really like a lot of the stuff you’re doing and your results have been superb. I also like your very clear explanations of your rationale behind decisions. You’re doing a really good job at de-mystifying investment speak!
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David F
"Happy New Year to you – I am sending this email to let you know that I enjoy your chronicle"
Stuart
"Merry Christmas, John. Thanks very much for sharing your portfolio, I have learnt a lot from it. Please continue your good work"
Jag
"Great website and well informed comments, keep up the excellent work"
Peter P
"I have stumbled on your great site while researching my new holding Baillie Gifford Japan Trust"
Constantin R
"I have been following you through your site for some time and I’d like to say thanks for the wealth of well thought out information that you present"
Dan P
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"I find your approach refreshing and informative and reassuring that somebody is capable of doing well in this industry. I look forward to your future blogs and appreciate the effort you put into creating this material and distributing it"
John S
"Firstly, I find your website invaluable and a real no nonsense way to invest and keep track of trades. It’s helping me a lot with my endeavours. Keep up the good work"
Nick G
"I find your website very interesting and informative, you explain your investment choices in easy to understand language and most importantly you keep it very much up to date with immediate email notifications about new company reviews, investment transactions etc."
Tina K
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"I follow your posts with interest. Thanks for posting a great site"
Alex D
"I am an avid reader of your Investment Chronicle. As a relative new comer to trading and investment I really appreciate both the success of your investment strategies and the clarity, rigour and transparency you share within your blogs."
Glen W
"I recently discovered your website from a BB on ADVFN ad I think it is really good. Keep up the great site, it is refreshing to find someone being so honest about what is and is not working well and less so."
Guy V
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"Congratulations on such a great website. I first learned about it from a trader’s forum and now check it 3 – 4 times a week."
Richard D
"I stumbled across you at the beginning of this year and enjoy your well written articles."
Geoff C
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"Thanks for your blog. It makes interesting reading!"
Sam A
"I have this morning discovered your site, very interesting reading. I must go back and look more thoroughly at your investment strategy."
Paul M
"Many thanks for your investment chronicle, wish I’d found it earlier."
Simon
"Just a short note to say I really enjoy reading your blog and updates!"
Steve G
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"Great blog, John – well done; I enjoy it and its premise."
Paul B