Guide to Investing

A collection of articles aimed at both educating investors in order to make more informed decisions as well as explaining the SmallCaps.co.za investing strategy.

When Book Value is Rubbish

Firstly, for some academic background to this article read this one: Smoke, Mirrors & Balance Sheets. Now, when is it justified that a stock trades below book value? Well, the answer is simple enough: when book value is overstated. But how … Continue reading

Illustrating Investing in the Small Cap Cycle

I have drawn this rather crude illustration of what some call the “small cap cycle”. The Y-axis of profit stands for the growing profits of the business as well as the increasing investment returns over time (as, in the long-term, … Continue reading

How Does Acquisitive Growth Work?

Due to consolidation accounting (or “Group accounting”) rules, when one company controls another one (from 50% + 1 vote up to full-control of 100%, depending on circumstances), that first company (or the “parent” company) gets to accounting for both the financial … Continue reading

Company Valuation Basics

This article is following on the series that I began posting here: The Four Pillars of Company Fundamentals. This second batch of videos present an overview and the basics of various valuation approaches for stocks. A notable valuation model missing from this … Continue reading

The Four Pillars of Company Fundamentals

The videos below are from a series I ran on JustOneLap.com a good couple years ago. Sure, I could probably do a slightly better job presenting some of these topics nowadays and/or modernize one or two examples, but the essence … Continue reading

JSE Power Hour: Start-to-End Investing in Small Caps

Last night I gave a presentation at the JSE about investing in small caps. The idea was almost to present a turnkey solution to investing in this part of the stock market. For this reason, the presentation starts very basically … Continue reading

A Forgotten Safeguard: Diversification

The global economy is desynchronised with significantly diverging views at both global and country-level. China could implode, Europe could fragment and USA could falter. All of these could happen. And then you get commodity volatility coupled with massive forex swings (up … Continue reading

The Two Mistakes I Made During the Credit Crisis

Following from Monday’s big sell-off (see a perspective here) and the rest of this week’s bounce, I think it is time to put some thoughts out there. At least some, if not a fair amount, of the current market participants … Continue reading