At Mello Workshop 2015 I presented on the topic of the best websites for the private investor and this is the content of that offering with annotations to provide additional colour.
Mello Workshop 2015 is the latest venture from Mello Events and I ran a workshop on the best websites for a private investor in the UK. The short-list covered in this talk is culled from a much broader long-list of websites with the successful sites being selected on the basis of utility, timeliness and ease of use.
In thinking about websites, and how to structure this introduction, I've focused on my own investment process and the resources that I use on a regular basis. However I think that it's worth taking a step back and reflecting on the fact that this presentation couldn't have existed twenty years ago; we truly live in a golden age for the private investor. There are numerous sites available to us and new ones are appearing all of the time to fill unappreciated gaps in the market. So it's important not to let our mental list of favourites become too stale.
As private investors we often have a portfolio of shares that we need to manage; so keeping abreast of current news is important. At the same time all but the most indolent of us are on the lookout for new ideas and there are many sources, in blogs and otherwise, of such ideas. However once we've taken someone else's suggestions on-board the onus is on us to put in some leg-work and actually research the companies of interest; this is where clean data and intuitive tools are useful. Of course investing can be something of a lonely business and it's always good to chat and perhaps hear the bear-argument for our intentions. The only problem with this is that even on-line we don't want to appear too foolish when we don't understand these arguments - fortunately there are plenty of learning resources available to fill the gap.
Listed companies are required to disclose standard announcements, such as financial reports, and price-sensitive information in a fair manner (to avoid a false market) and most do this with an RNS. Investegate are an excellent source of these announcements and I have them set-up to send email alerts whenever an RNS appears for one of the shares in my portfolio. However this can lead to a rather large number of emails and if you want to pick out interesting announcements from new companies then StockMarketWire is useful; here the announcements are split into sensible categories such as takeover bids, new contracts and other potentially important transactions. For more direct news and comments the Financial Times have a Market Live commentary where pundits spell out their immediate thoughts during every working day.
Once you've dealt with your own portfolio there are numerous bloggers submitting their thoughts and, in the case of regulated professionals, offering share tips. Michael Walters has been a financial journalist for over 40 years and now puts out three or four small-cap tips a week on his own website. It's a subscription site, costing £75 per annum, but some articles are free and as a subscriber you gain access to his private discussion board. Richard Beddard runs a public portfolio of small-cap shares for Interactive Investor with a number of updates appearing every week. There are some very familiar company names here and I find Richard's approach to investing very sensible. Mercurius Research are somewhat different in that they are a new kid on the block but they've started strongly with some very detailed, up-to-date research notes. They also send out a free daily note, by email, with their thoughts; it'll be interesting to see if they can maintain their momentum.
Paul Scott probably doesn't need an introduction for many small-cap investors but he writes a daily blog that I find somewhat compelling; his mixture of objective balance-sheet analysis and subjective commentary has taught me a great deal. In a similar vein Maynard Paton is a full-time private investor with a bias towards companies with some sort of moat and a willingness to undertake detailed analysis. Compound Income comes from an ex-fund manager who now invests privately; what I like about his approach is that he has created his own quality/value/momentum ranking strategy and is happy to share the results of this for free.
The only problem with harvesting other people's ideas is that unless you perform your own research they remain exactly that; someone else's idea. So we need to do our own analysis and I find Stockopedia an excellent way to do exactly this. They source their data from Thomson Reuters, calculate a large number of statistics every night and then make all of this available via screening tools. The problem with Stockopedia is that their data only goes back six years and this is where InvestorEase comes in useful. Where available they have results dating back to 1989 and dividend data to 1997; I find this invaluable in determining how a business has performed through several economic cycles. A further source of good data is Hemscott although it can be tricky to find; they provide 5 years of data alongside some of the more useful investment ratios and broker forecasts for the next year or two. This data is made available through many stockbrokers, under their own name, and is often worth checking out.
Of course private investing can be a lonely and thankless business, stuck in your office with a spreadsheet, and so while you're working on a new idea it can be useful to bounce your thoughts off of other investors. This is where discussion boards come in and one that I've used for many years is The Motley Fool. They provide boards on everything from dealing with debt to rural living and in most cases the advice on offer is both sensible and dependable. However if The Motley Fool is like a warm country pub then ADVFN is a Wild West saloon where anything goes and you can't hear yourself think. This is a shame as there are some real nuggets of interest on some boards - but they can be hard to find. Interactive Investor offers a middle-ground with their nicely designed boards but they don't feel quite as well supported by the site owners.
The only downside of reaching out to other investors is that occasionally they come back with a comment on Discounted Cash Flow and it can be a bit embarrassing to admit that you're out of your depth. This is where Investopedia comes in as they offer step-by-step guides to the most arcane of ratios and analysis topics. A fundamentally different education is provided by the shareholder letters of Warren Buffet; in recent years these have considered human psychology, and its impact on investors, as well as financial results. In my opinion knowing why we act is as critical as the act itself and there's no downside to knowing a little bit more about how our mind works. On a different tack Investing for Beginners was put together by an investor who couldn't find any good resources for someone starting out and decided to create his own; the site contains many useful articles on ratios, types of investing and war stories. It's surprisingly useful even with its US bias.
Of course it can be hard work pulling together all of this research and when you're a beginner it's scary to try and get your early investments right. This is where paid-for research can be useful so long as their investment approach aligns with your own. For example Fat Prophets look for value opportunities in the UK market and frequently alight on large-cap shares that appear undervalued with a catalyst for change; I used this service for a number of years and found both their tips and research very helpful. The Dividend Letter is similar except that here the focus is on creating income-generating portfolios using a publicly available set of rules. A slightly more recent entrant to this market is Stockatonia where research reports are published for shares offering value. The unique selling-point here is that Stockatonia offer social networking opportunities to members - much like this current Mello event.
I've managed to locate a number of websites which, I believe, are being unfairly overlooked and offer something unique. The Stock Challenge site allows UK investors a monthly chance to pick 5 shares and see how they fare against other investors. It's a fun competition and there's no doubt that some of the entrants have a repeatable edge with their history of success. On a similar note the Share Tips site aggregates the tips made in magazines and newspapers and tracks their progress; usefully the archive stretches back to 2008 and some of the suggestions made look decidedly ropey in hindsight! Finally I find it surprisingly difficult to locate reliable dividend information and Upcoming Dividends seems pretty good on this front; the site offers current dividend data across all LSE markets and sensibly handles special dividends. This alone makes it a useful site for screening purposes although it's a shame that forecast dividends aren't available.
Hopefully the sites that I've covered here will prove useful to others; I certainly include many of them within my investment process. That said the websites listed in this summary are my go-to sites; the ones that I visit on a daily basis. Together they offer me a useful combination of analysis, commentary and daily news. However it's important to remember that all sites will contain errors, of varying significance, and they all have an agenda; whether this involves explicitly charging you a subscription or implicitly gaining your buy-in to an investment idea it's important to take everything that you read with a pinch of salt. This is why I've dropped the Share Prophets site into this conclusion; they seem pretty cynical about every story that they hear and that's not a bad starting point for all of us.
The rewarding aspect of an event like Mello Workshop is that there is always something new to learn and that's true even for this presentation. One site fresh to me is LCF Research and what I like about them are their independent research notes on small, often overlooked companies. Even more useful though is the fact that where they have commented on company news and results then this commentary is retained and woven into a single, unmodified history; the idea being that you can discover what they thought about any company at the time (rather than in retrospect). The other new site is VOX Markets, who have a stand here, and their aim is to draw together news from all sorts of different sources (Twitter, broker notes, newspapers, etc.) and join it together in a single view. This seems like a great idea to me and I intend to register my portfolio with them to discover whether this will enhance my daily research practice.
Having gone through the process of discovering and researching all of these investment websites I really do believe that we are very privileged to be investing at this moment in time; we have so many powerful resources at our fingertips that it seems almost churlish not to make use of them. I do hope that this short-list proves useful to others but I also realise that it is anything but comprehensive; so if you know of an investor site that you'd like me to take a look at then please do leave me a comment with the appropriate details.