Replicating Share Sleuth's winning formula
Our companies analyst responds to a reader who’d like to buy the successful Share Sleuth portfolio.
11th April 2019 10:56
by Richard Beddard from interactive investor
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Our companies analyst responds to a reader who'd like to buy the successful Share Sleuth portfolio.
I invest in funds and investment trusts and avoid shares. This reflects my lack of equity knowledge. But I look with envy at Share Sleuth's results in Money Observer and wonder how to 'buy the portfolio' or parts of it. Is this something you would recommend?
Roland Waterhouse, by email.
Richard Beddard replies: I wouldn't recommend slavishly buying the shares I buy without forming your own views. The easiest way to see what I am thinking about the shares I follow is to read my articles on interactive investor as they are published (ii.co.uk/authors/richard-beddard) or follow me on Twitter. Every five weeks, I rank all the shares I follow and publish the table in an article on interactive investor.
Many of my other articles are write-ups of the companies I rank, and I also write about the companies I am thinking of buying and selling in the Share Watch column in Money Observer.
Your question about 'buying the portfolio' is one I am asked frequently. In November, we published a general explanation of why I think people should be cautious about doing such a thing. Here is an extract:
"The official objective of the Share Sleuth portfolio is to beat the index over any five-year period, but I really think in terms of a 10-year horizon. If the portfolio performed poorly over a three-year period, I wouldn’t think I was doing anything wrong.
I won't comment on copying fund portfolios, as it is not my manor, but there are a number of pitfalls when copying share portfolios. You might, for example, buy a share I am about to sell. Your faith in the investor you are copying needs to be unshakeable (and justified), because he or she will perform poorly from time to time, so I can't advise you to copy me or anyone else.
My goal as a writer is more modest: to help people learn enough about company analysis to put their confidence in companies and to introduce them to companies that might make good long-term investments."
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
Disclosure
We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.
Please note that our article on this investment should not be considered to be a regular publication.
Details of all recommendations issued by ii during the previous 12-month period can be found here.
ii adheres to a strict code of conduct. Contributors may hold shares or have other interests in companies included in these portfolios, which could create a conflict of interests. Contributors intending to write about any financial instruments in which they have an interest are required to disclose such interest to ii and in the article itself. ii will at all times consider whether such interest impairs the objectivity of the recommendation.
In addition, individuals involved in the production of investment articles are subject to a personal account dealing restriction, which prevents them from placing a transaction in the specified instrument(s) for a period before and for five working days after such publication. This is to avoid personal interests conflicting with the interests of the recipients of those investment articles.
This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.