The big picture - Introducing myself

A Brief Introduction To Intelligent Financial Investments by Bernhard Mähr


When I was 18 years old I bought my first Investment Fonds at Erste Bank and learned from my favorite bank adviser about the cost average effect and invested with a monthly small payment into an Erste Bank Fond. 20 years later I still work as a Software Developer for ERP Software and studied Economics and Science at the University. In my studies I learned a lot about companies, Management and to read balance sheets and financial statements. That knowledge helps me a lot nowadays when I want to pick the right stock. With my money I earned additional USD not only from my monthly salary but from a cost average effect investment throughout the financial crisis from 2008 - 2017. In addition I earn some money with trainings (see www.laendlekurs.com). My favorite bank adviser however changed from an Erste Bank sales person to Warren Buffet or better to some wisdom of the book "The Intelligent Investor" by Benjamin Graham. As such an intelligent investor I currently see a lot of money from free credits (negative interest rates) in the stock market which means that there is a lot of leverage and stock prices are high enough to become cautious. 

A brief look at my personal finances looks as follows. I keep only 57% of my capital in a S & P 500 ETF - Index Fonds and in BRK.B berkshire hathaway company shares of warren buffets investment company. Another 38% of my capital is cash ready to invest into the stock market when the next crisis occurs. The rest of about 5% of my capital is investments in CFDs and tulip fever markets of the 21st century called Bitcoin and Ethereum. Leveraged investments include 10x BRK.B and other stocks so basically the big risk is in the same stocks as the leverage free 57% investments. You can check out my portfolio at: https://www.etoro.com/de/people/bernhard1979 and find out more about those trades. If you want to benefit from my experience but you are unwilling to invest your time in learning all the basic stuff and advanced stuff I had to learn the last 20 years about investing then you can easily copy my portfolio at etoro and earn some money when I do. If you want to join etoro the first 10 friends I invite can still get free 20$ when using the following link to create an account: http://etoro.tw/2wNGgVB. Please let me know in etoro when you created an account and want to copy my portfolio. However I advise you not to invest all of your money into the stock markets or ideas like Bitcoin especially with current price levels.

My best investment by far was the purchase of my medium sized owner-occupied flat in 2009. Back then housing prices in Austria where at 50% of the prices of 2017 and I did not speculate with swiss CHF credit like lots of Austrian citizens gambled for a small benefit in interest rates. On the other hand that also means that the free money you currently get for negative interest rates (0% interest rate) found its way into the housing markets and overheated prices to current housing prices. The financial crisis in 2008 began with dropping real estate prices in the US as lots of credit contracts became worthless. I don't know how many people in Austria reestimated their real estate market price by banks in order to get more credit money. In the US that is common sense to do so. However I did not do that because when real estate prices begin to drop that creates the well known problem of a credit contract higher than the housing price. Similar problems could occur with the CHF credit speculation which is a very common phenomenon in Austria (lots of financial advisers like to earn money and sell CHF credit products combined with life insurances that include stocks - another gamble for higher returns on stocks than the interest rate).

So you might ask yourself what I want to achieve with Etoro. Here are my Goals from my birthday (29.09.1979) to silvester - year end.

SMART Goals With Etoro (From Birthday To Silvester)
Start Date: Birthday 29th of September 2017
End Date: Silvester 31.12.2017
Specific:
- Achieve an annual performance of 15-20% with CFD investments into US Shares, S & P 500 (year end rally) and Crypto Currencies like Bitcoin.
- Show the investment community on etoro that I know about responsible trading with a 15-20% performance per year and low risks as well as small losses.
- Show the Investment community my decision making process and my 20 years of experience as a private investor
- Start building up a reputation as a financial advisor for private investments within Vorarlberg and Internationally
- Invest about 5% of total free cash capital available into the Etoro idea until 31.12.2017
- Learn 5 new investors on Etoro to do networking who have similar trading strategy and experience and can help to check my investment ideas / eventually add additional thoughts, opinions and facts to my blog.
- Get copied at least by one person in Etoro and achieve the first level of a popular investor

Measurable:
- The monthly and yearly performance can be checked with the portfolio statistics on Etoro
- The marketing and reputation can be checked with the amount of Followers & Copiers on Etoro as well as the amount of views on this blog per article
- There is a new watchlist of interesting people on Etoro to add people with similar strategy and experience

Attractive
- As I am already partly working as a teacher (www.laendlekurs.com, WIFI) a new training Course would enrich this Portfolio.
- Investing and optimising my Investment decisions is a profitable hobby of mine and a friend (Michael) for about 20 years so the time invested in the evenings is not wasted (I like doing it also without a profit). Michael and me also have something new to discuss regularily (enriches the value of this friendship).
- 15-20% performance of 5% total capital is a nice attractive yearly performance goal

Realistic
On 17th of October 2017 I have the following statistics on my trades so far: +4,65%. I already reduced this goal in the first month from 8% per month to 2% per month because I wanted to reduce the risks involved in my investment.

Timed
The goals are timed for 31st of December 2017. After that the Performance will be measured and the risks on the markets for 2018 will be analysed again.


However to show my overall responsiblity for total capital (not just 5% with leveraged CFDs) I have also created my own wikifolio portfolio "valueformoney". It has only about 0,52x the risk of a Eurostoxx 50 stock.


Introducing A Very Good Friend Of Mine


I want to use this opportunity to also introduce you to a very good friend of mine. His Name is Michael and his nickname is Tricky. In summer times we go and drive our motorcycles together. He works for the insurance company Uniqa for decades now and as a simple employee he owns almost more stocks of Uniqa than the management of Uniqa which tells me something. We are legendary friends as we know each other from the time when we went into basic school to current date. Here you can see a picture of us on a motorbike tour.



His portfolio is also public as he uses wikifolio to show his strategy to the public. You can check out his portfolio and the performance on wikifolio here. He believes in the future for a company called GreatCell Solar Ltd which he analysed in details. Perhaps he will become a millionair with that company as he owns a lot of shares for 0,118$ per share. GreatCell has some new innovative patents on Solar Cells that are highly efficient. I wrote an article on GreatCell solar because I wanted to know for myself if this company is a good idea for an investment. I decided to not invest into GreatCell Solar for a number of reasons. If you are interested on my analyses you can read through my article about GreatCell Solar on this blog.

He is also invested into Immofinanz, Telefonica and Uniqa of cause. His biggest stake by far is Uniqa - the company where he works. Here are some key metrics of his portfolio. He currently has 6 persons who placed an advanced order for his portfolio. With 10 advanced orders this portfolio will become a tradeable certificate. Michael invested his money already at a broker with this strategy although the certificate is not tradeable so you can be sure that he puts his money where his mouth is. That is the main reason I use Etoro as you can clearly see and check that I put my own money into a portfolio you can easily copy at Etoro for your own money. On Wikifolio you can never be sure about this but you can take my word for it that this is true for both of us. Keep in mind however that his strategy might be very different to my own strategy.


Conclusion - Why Not 100% Stocks

I want to start into conclusion with a citation of Benjamin Graham:

Graham advises you never to have more than 75% of your total assets in stocks. But is putting all your money into the stock market inadvisable for everyone? For a tiny minority of investors, a 100% - stock portfolio may make sense. You are one of them if you:

* have set aside enough cash to support your family for at least one year
* will be investing steadily for at least 20 years to come
* survived the bear market that began in 2000
* did not sell stocks during the bear market that began in 2000
* bought more stocks during the bear market that began in 2000
* have read Chapter 8 in this book and implemented a formal plan to Control your own investing behavior.

Unless you can honestly pass all these tests, you have no business putting all your money in stocks. Anyone who panicked in the last bear market is going to panic in the next one - and will regret having no cushion of cash and bonds.

(Graham 2006, page 105)

To update that citation to the current year you can basically use the same rules for the bear market of the financial crisis that began 2007 - 2008. Benjamin Grahams strategy concludes in the well known sentence: "Be fearful when others are greedy - be greedy when others are fearful". Currently lots of people became greedy on the shareholder markets, on the real estate markets and in crypto currencies like Bitcoin and Ethereum. If you take a look at the Shiller PE Ratio we are currently at ratios of 31,47 even higher than 2007 before the financial crisis.

(See: http://www.multpl.com/shiller-pe/)

By scanning the historical record, Shiller has shown that when ratio goes well above 20, the market usually delivers poor returns afterward; when it drops well below 10, stocks typically produce handsome gains down the road.

(See: The Intelligent Investor, Graham 2006, p. 85-86)

However there are no alternatives at the moment because the bond market revenues and the interest rates are too low to even cover inflation. That is the main reason money still continues to flow into the stock markets in 2017. A 50% investment in stocks should be fearful enough to not fall in panic mode when the next crisis comes and you still have plenty of money to buy into low prices either with a cost average strategy or you try to pick the bottom of the markets whatever suits your investment style more.

So in my own conclusion I advise you to think about this big picture for a night or two. If you are still interested to invest some money you have an option to read through this blog which covers my investment ideas besides the general Warren Buffet advised investment of S & P 500 as well as the berkshire hathaways shares. I basically follow these investment ideas with more or less leveraged contracts on my etoro profile (leveraged credit financed Investments = CFD's). You can also buy the book "The Intelligent Investor" by Benjamin Graham and follow the path of Warren Buffet if you want to do so. If you do not want to read into the details of this blog or you simply do not have the knowledge to understand the numbers and facts behind my ideas then you can simply go to etoro and start investing with 200$ + 20$ bonus if you use my link. There you can copy my portfolio to your own money investment starting with those 200$ and you can add your own investment ideas later on if you want to do so. Just be careful with leverage (1x, 2x, 5x, 10x, 25x, 50x, 100x) as those multipliers you can select not only multiply your earnings but also the daily losses. Although my portfolio is diversified you can easily multiply your daily loss to a 100% loss of your investment if you choose a high enough multiplier at etoro.

You Act On Your Own Risk

I make a final statement in regards to my responsibility towards other persons who act partly or as a whole because of my analyses in this blog. Please keep in mind that you act on your own risk and that you cannot transfer this responsibility to my person. You therefore agree not to accuse me in any case of losses you take on the markets because of my analyses. I did my best to explain the risks you are currently involved and you can read a lot of other books, websites or information material by your broker or favorite bank that will explain you the general risks within the stock market or CFDs (especially with leveraged contracts). A very good book about value investing is "The Intelligent Investor" - The Definitive Book On Value Investing by Benjamin Graham. If you are unsure what value investing is all about you can read into that book on your own. I am also not a certified financial advisor because I never worked in this business for a monthly salary but I studied economics and science so please also keep that in mind. If you want to follow me or even copy me and my investment strategy on Etoro (which is very easy and just a mouse click or two) you are free to do so on your own risk. Trading and investing contains risks. The blog articles are no financial advises.

I wish you the best and great success - may all of your dreams become reality.

Sincerely,

Bernhard Mähr








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