Not much more i can add. Just read Fama & French's 3 Factor Model paper, 1993. Their conclusions were statistically significant
- small cap companies outperform large caps. It's easier for a $10m company to grow 100x than BHP to grow 100x. There's just more opportunities to grow fast when you're small - companies with High Book to Market ratios outperform those with Low Book to Market. Pretty much value stocks, or those that are near or less than the value of their parts outperform growth stocks (people pay too much for the blue sky, or story) - from memory illiquid stocks outperform more liquid ones.
what do i own? Illiquid assets that are less than their parts and are hard to disrupt. The best asset that can't be disrupted is a tree
-Boundary Bend, owns Cobram Estate and 6m olive trees. Unlisted, via Low Volume Market - Kemp and Denning, owns a whole block of inner city Hobart. Unlisted, via Low Volume Market. Trades at 30% of true value/ illiquid - Longevity Group. Unlisted, via Low Volume Market. Trades at 30% of true value/illiquid - stakes in radiata pine plantations in NZ. Illiquid - ASX KPT, wood chips. Trades at 70% of NAV. - ASX MYL - NSX RFP, chicken broiler, pays a 15% dividend and is 10% less than NAV - also buy takeovers/buybacks as there is good money in short term investing
But Caveat Emptor, i only buy if i know how i'm going to get my money back
So it doesn't matter what you buy, there is a buck in every faze of a company. Birth, growth, maturity, decline and death. Just don't overpay. You're buying income streams not stories. Finally don't over diversify as you don't have the time to follow all of them and overtime you will start to mimic the market.
