Long-term buys

For those that can save for 20 to 30 years consider this pension idea. Based around a UK ISA and investing in companies within the FTSE 350.

It’s an idea developed around Benjamin Graham’s (Warren Buffett’s mentor) principles of intrinsic value.

We take 10-years of annual results and determine key numbers of consistency of growth, growth rate and present value as a percentage of value projected: i.e. is our chosen company a bargain?

Here’s a snapshot of some figures a few years back.

snip20170107_1

This analysis is for the long view. The figures are a vital starting point but does not take into consideration the longevity of the company nor the ability of those managing the company.

That is why we should only invest in companies that we understand, or are prepared to do the work to understand. For example, Blackberry scored highly on the above figures, right up until it fell off a ‘technological’ cliff.

That means, even with the figures, it is important that we do our due diligence and are happy that a company has legs.

Similarly, and often subjective, motivation and reimbursement of the individuals responsible for driving a company forward helps our decision to buy.

But having said that, thanks to Nick, the hard stuff, the figures, will be provided here soon.

We also intend to provide a ‘price action’ analysis from long-term charts to help with buy decisions.

Finally, those looking for a home for a stocks & shares ISA we thought that Charles Stanley Direct came out well. Their charges are some of the lowest and all seems clear and easy to follow. Unlike many ISA providers we found.

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