In this series of video posts, I look at a series of accounting red flags and explain how you can spot skullduggery by devious CFOs. Some of these are really simple, and a few take a certain amount of accounting knowledge, which I explain in each post.
 


All of these techniques should be within the reach of the average private investor after reading the post and watching the videos - and if you still don't understand, post below and I will try to answer your questions.

In this video, I Introduce the subject, discuss the main tools we shall examine in upcoming posts and explain why this is such an important subject. In fact, there are two reasons for looking at these issues. The first is to detect companies which are frauds for look odd, and the second is to ensure that your process involves doing a series of checks, including the basic due diligence checks, when buying a new stock.

You can also find these videos on our YouTube channel, without the added explanatory text.

In this video, I explain why you must always read the audit report - it shines a light in areas of potential concern. It's always useful also to check the audit fee - ensure it's not stupidly low (or high!) and that the auditor is not receiving excessive remuneration for non-audit work.






This basic check in most circumstances will only take you 10 minutes. If the auditor draws attention to a particularly difficult matter, it may take an hour or more, but that spending that time is usually a useful insurance policy. 

In this series of video posts, I look at a series of accounting red flags and explain how you can spot skullduggery by devious CFOs. Some of these are really simple, and a few take a certain amount of accounting knowledge, which I explain in each post.



All of these techniques should be within the reach of the average private investor after reading the post and watching the videos - and if you still don't understand, post below and I will try to answer your questions.

In this video, I Introduce the subject, discuss the main tools we shall examine in upcoming posts and explain why this is such an important subject. In fact, there are two reasons for looking at these issues. The first is to detect companies which are frauds for look odd, and the second is to ensure that your process involves doing a series of checks, including the basic due diligence checks, when buying a new stock.

Voss is a former FBI terrorist negotiator, so you can take it as read that he knows how to negotiate. A friend of mine who is the number 2 at a well-known major hedge fund, recommended it as an investment book. No idea why, as it has nothing at all to do with investing, but I am glad he pushed me to buy it as it’s a brilliant book. Even if you aren’t a professional buyer or a salesperson, negotiating skills are at the heart of all inter-personal exchange, whether it’s trying to get yourself a larger raise or to persuade your kids to go to bed.

The book is full of practical advice on how to handle such negotiations and Voss provides concrete examples from his own experience, often involving life-threatening situations. I take notes on books using an A5 sheet and rarely fill one page, but I did with this book (small writing, too!). Often the advice is amazingly simple, and I found some difficult to believe, but the author’s real-life examples are testament to their effectiveness.

His negotiation of a purchase from an automobile dealership had me amazed, or his suggestion that you should use your name in a negotiation. In a shop, having been told that there were no discounts, he said that his name was Chris and asked what the Chris discount was. Clearly, he has the personality to carry this stuff off, which not all of us have, or perhaps would feel comfortable with – but much of it resonated with me. I recall getting 40% off a sofa in Harrods simply by telling the salesperson that my price limit was x and that I would sign there and then if he gave me the discount and otherwise I would walk away. Showing conviction is no doubt helpful.

This isn’t one of the strategies recommended in the book, but it's full of practical advice: 

For graduates attending an interview, he suggests the question “What does it take to be successful here?” – simple and no doubt effective.

A brilliant, helpful, practical and enjoyable book – well worth picking up. Get it on Amazon UK or US through our affiliate links (money goes to charity).





Voss is a former FBI terrorist negotiator, so you can take it as read that he knows how to negotiate. A friend of mine who is the number 2 at a well-known major hedge fund, recommended it as an investment book. No idea why, as it has nothing at all to do with investing, but I am glad he pushed me to buy it as it’s a brilliant book. Even if you aren’t a professional buyer or a salesperson, negotiating skills are at the heart of all inter-personal exchange, whether it’s trying to get yourself a larger raise or to persuade your kids to go to bed.

The book is full of practical advice on how to handle such negotiations and Voss provides concrete examples from his own experience, often involving life-threatening situations. I take notes on books using an A5 sheet and rarely fill one page, but I did with this book (small writing, too!). Often the advice is amazingly simple, and I found some difficult to believe, but the author’s real-life examples are testament to their effectiveness.

His negotiation of a purchase from an automobile dealership had me amazed, or his suggestion that you should use your name in a negotiation. In a shop, having been told that there were no discounts, he said that his name was Chris and asked what the Chris discount was. Clearly, he has the personality to carry this stuff off, which not all of us have, or perhaps would feel comfortable with – but much of it resonated with me. I recall getting 40% off a sofa in Harrods simply by telling the salesperson that my price limit was x and that I would sign there and then if he gave me the discount and otherwise I would walk away. Showing conviction is no doubt helpful.

This isn’t one of the strategies recommended in the book, but it's full of practical advice: 

For graduates attending an interview, he suggests the question “What does it take to be successful here?” – simple and no doubt effective.

A brilliant, helpful, practical and enjoyable book – well worth picking up. A brilliant, helpful, practical and enjoyable book – well worth picking up. Get it on Amazon UK or US through our affiliate links (money goes to charity).





As a follow-on to the 2020 revisited video, I looked at what areas of the market might offer fruitful opportunities as we look forward to the remainder of 2021 and hopefully a return to a more normal life. In this second video in the Market Outlook series on my YouTube channel,  I look at a couple of areas which I think may have been unfairly overlooked by market participants.

The common thread is looking at supply rather than demand - it's often overlooked by investors and can be a much more reliable source of alpha. Supply is often easier to forecast than demand yet analysts focus much more on the latter. This creates opportunities.







Also included here is a warning - when looking for stocks which have been hard hit by the pandemic, don't just look at the share price - you need to take the overall valuation into account. I show how Carnival's share price has halved but the valuation is as high as it was pre-Covid. 

As a follow-on to the 2020 revisited video, I looked at what areas of the market might offer fruitful opportunities as we look forward to the remainder of 2021 and hopefully a return to a more normal life. In this second video in the Market Outlook series on my YouTube channel,  I look at a couple of areas which I think may have been unfairly overlooked by market participants.

The common thread is looking at supply rather than demand - it's often overlooked by investors and can be a much more reliable source of alpha. Supply is often easier to forecast than demand yet analysts focus much more on the latter. This creates opportunities.




Also included here is a warning - when looking for stocks which have been hard hit by the pandemic, don't just look at the share price - you need to take the overall valuation into account. I show how Carnival's share price has halved but the valuation is as high as it was pre-Covid. 

I like John Authers' columns. It was a treat on a Saturday morning when he wrote for the FT and he now does a daily for Bloomberg. His Hindsight Capital annual roundup is always worth reading and has been reviewed in these columns. I was struck by one facet of 2020 markets' performance and used this in a presentation to the Mello private investors conference in January.

I have recorded that presentation as two videos on YouTube. The first looks back on 2020 and explains that you only needed to get the big picture right. When there is a major macro-economic change, as we have seen with Covid-19, the market takes time to work out the implications and process this in stock prices; it also often overshoots.






As I explain in the video, you only needed to work out that the pandemic meant lockdowns and that in turn tourism would suffer and businesses that delivered to the home, usually via the internet, would prosper. That simple conclusion - hardly rocket science - would have made you a lot of money in 2020. 

In a typically simple and thoughtful piece, Michael Mauboussin explains why stocks were rerated last year - bonds went down, the equity risk premium fell and volatility went up. The article explains the relationship between the three variables. Worth a read.

My book is nr 5 on this blog and the site also has a review of investing courses and even a short interview with me about my book.