DIY Investor Magazine
/
2015 Issue
42
TEN GOLDEN RULES OF EQUITY INVESTING
NARRATED BY JOHN CLEESE
We have been investing for over thirty years. During
this time we have weathered numerous and varied
market cycles, and there is little that still surprises us.
What we have learned has come to form the bedrock
of our investment approach; and the guiding element
behind this is simplicity. We strongly believe in the
virtues of doing the basics well.
We have distilled our insights from the world of investing
into ten succinct rules. None of them should surprise
and they all share one distinct trait: a belief in common
sense. While the sentiment behind them is serious, we
hope that you find this light-hearted presentation both
refreshing and entertaining.
1. TREATMENT OF MINORITY SHAREHOLDERS
When considering a company it is important to know
‘who controls it and do you trust them?’
2. REMEMBER THAT COMPANIES ARE ABOUT
PEOPLE NOT ASSETS
A company is essentially a group of people with a
common goal, to create the best possible product
at the best possible price. Assess the quality of a
company’s people
3. BALANCE SHEET STRENGTH IS CRITICAL
A balance sheet is like a backbone; it tells you about
the character of a company.
4. UNDERSTAND WHAT YOU’RE BUYING
Understand what the company makes and what its
market is if something doesn’t make sense, walk away
Hugh Young
Group Head of Equities
Aberdeen Asset Management
