Friday, December 11, 2009

From Value to Abundantia

Evolution. Change. Sometimes it is more than needed.
The idea of Value Finance started as a game, but with the time the development of the original idea become complicated to represent through a simple Blog.
That is why I have decided to change, to transform the blog into a more articulate website where we could easily follow the performances of different portfolios.
Abundantia Investment Management.
That is the name of the site (you can find it at
Abundantia has been thought as a Wealth manager / Investment boutique where people can see and track real portfolios - with real assets under management.
You can take inspiration, ask some advices, give your opinion about some transactions and, what is more important, we will learn together to build and maintain a long term profitable portfolio!!

So, join us into this new adventure!
Subscribe to the Free news feeder on Abundantia IM.

Wednesday, September 16, 2009

When is "ETF choice" the Right Choice? - Part 1

Exchange-Traded Funds, shortly ETFs, represent a great way to take profit of the Stock Market when you do not want to invest hours and hours of your time reading annual reports, every Financial Time and WSJ latest news in order to make the 'right choice' for your portfolio.

There are some ways to build on an automatic steered portfolio when you are not a financial expert:
-you can trust your banker/broker's advices about hot-products
-you can invest, automatically, monthly in some financial tool without caring about the 'stock market weather forecasts'.

When you trust your banker: you are gonna paying him fees for that 'service'. This is bad, because we hate to pay in order to earn...

What is even worse: your advisor is often payed on commission basis and if his boss has told him to sell some products during a morning meeting, and you're going there that morning, you can be almost certain that products will become: 'This is the key investment, YOU must have in your portfolio'.

So, please, invest some hours of your time to study basics of investments and you will achieve a better Return On Investment than you would achieve listening to your 'best-friend-advisor'.

Basic rules of thumbs to achieve superior ROI:
- Postpone the taxes as much as you can. When you exit from an investment, you will pay the capital-gain taxes... that is bad because for your next investment you will have less money to invest. So, the key is: identify your investment tool, define a strategy, and forgot about partial disinvestments. Let them grow! (money, of course).
- Hedge the risk: if you put all your money in one Stock which has been suggested you by some incredible financial guru you are taking big risk. You can be one of the lucky guys who put all their bucks into a triple A perfect money-making company called Lehman Brothers.....
Please, avoid that. OK????

The person who is using stocks for his own investments should AVOID to put all his money in few stocks.
Because even Titanic has found one iceberg once. No way: you simply cannot take this risk.
You are a Civil Engineer, a Cop, an English do not know what is behind the Financial reports of Enron, Parmalat, Northen Rock and all the other magnificents companies suggested to you by some great 'advisor'.

Spread the risk. Spread the risk. Spread the risk.

How you can spread the risks?
1- you can listen to your advisor and buy some Mutual funds
2- you can build your portfolio with 10-20 companies
3- you invest in ETFs

Mutual funds are good for paying fees to the portfolios managers. They are highly regulated and linked to auditors who will check everything... but normally they will not beat the market. I try to avoid them. Just sometimes some bond funds, because as private investor is not easy to go on that market.

Build your portfolio, we have discussed about that earlier in this blog. This can be a good solution, but you have to invest a lot of your time reading hundreds of financial reports of companies in order to succeed following this path. If you are good, you can turn out in the next Warren Buffett... For what concerns Automatic-generated portfolios using stock screening techniques: Could they work? Maybe not, Maybe yes. I am not sure about that, but I am currently testing some of these techniques - but only with simulations accounts!!

ETFs are the common investor's best friends because:
- they hedge the risks as a mutual funds
- they always performs as the benchmark (you do not have to care about the skills of the portfolio manager)
- they have extremely low fees (that's good!!)
- you do not need to buy and sell in order to balance your portfolio (you delay tax payments!)
- you can choose which economy you trust in, you want to invest in: China, US, Europe..or even the Whole world.
- you can profite of leveredge ETFs which will double the performance of the index. You have a good Hedge Funds with half of a Mutual funds'fee... is that paradise?

To be continued for more details and ETF techniques.

Thursday, August 6, 2009

222 000 000

222 millions.

Is that what you will earn following this blog's suggestions?

I wish that, but of course no. It is not. Or at least I cannot promise it, no one can promise these things and please, if you heard someone promising sure huge gains on finance: run away!!

222 millions is the Google answer when you search 'Blog Finance' and you google it. That is a lot of:
Finance is one of the most discussed topic of the web, strange eh? Whenever there is money, you can be sure there is some one who wants to talk and read about that hoping to became the next Warren Buffett or at least a Gekko.

But what is making a blog a winner or a looser? Something which can stand up and truly offer some valuable and trustworthly information? Which are the items that normally ARE NOT discussed with a serious approach in blogs? What would YOU like to see/read in a finance-related blog but you have problems to find it, even if you have 222.000.000 Google answers to your question 'Blog Finance' ??
I will really enjoy reading your answers to this question. Leave a comment and maybe we could build something together.
Thanks in advance for your collaboration.

Friday, July 31, 2009

Portfolios performances

Some months ago I published on three portfolios, recently I added a fourth one.
It is time to give a look about their performances:
MyIdealPortfolio, representing a balanced portfolio which can be suitable for a long term inverstor who does not want to take high risks but still they want to invest in stocks, ETFs and Bonds (funds of bonds). This portfolio has obtained a unrealized gain of +11.86% since 7th Feb 2009.
TheScreener. A value focused portfolio which screens all the stocks on all US exchanges to find companies with low P/E, low debt ratios with good cash and high return on equity. It has performed, since 7th Feb 2009, a +34.40%.
CheapStocksHunt and CheapStock II are two speculatives portfolios which try to find cheap stocks with high uptren potential in order to obtain an high performance. These two portfolios have an higher risk profile because they invest in low cap and extremely volatile companies.
Their return:
CheapStockHunt is performing: +52.47% since 7th feb 2009, while CheapStock II is performing +23.67% since 6th July 2009.
Value finance will keep you posted with these performance and in the meantime you can became a follower of these portfolios on Subscription is for free.
Please be aware: there is no guarantee that the performances of these portfolios will be the same in future. As for every financial products there is NO certitude for what concern future returns. There is No One who can guarantee Anything. Even T Bills of US Government cannot be considered 100% safe, there is always a risk, even if extremely little, of US Government failure.

Wednesday, July 22, 2009

Debt consolidation non profit- your savior in financial distress

Debt help industry is doing brisk business and it has been able to help many debtors get out of debt. This is true not only for the for-profit making debt help firms but also for the debt consolidation non profit section of the debt help industry. Although the main aim of these companies is to help debtors get out of debt but there is one difference between the debt consolidation non profit agencies and debt consolidation for-profit agencies.

Debt consolidation for-profit versus debt consolidation non-profit
While the for-profit debt consolidation firms help debtors to get out of debt but charge fees for the services they offer, the debt consolidation non profit firms don’t charge any fees. They operate from funds received as donation. However, they may charge a very nominal fee under certain circumstances.

The role played by the 2 sections of the debt help industry is same. These companies will help you to lead a debt free life. This is made possible when they negotiate with your creditors to reduce interest rates and lower monthly payments. You will also get a repayment plan that will allow you to pay off debts in a comfortable manner.

Why has the debt help industry earned negative publicity?
The debt help industry is very busy these days but they are also earning a lot of negative publicity. This is due to the fact that the attorney generals, state regulators, Federal Trade Commission have been receiving several complaints lately. The situation has aggravated following recession when people are adopting unfair means to survive the credit crisis.

As far as the debt consolidation non profit firms are concerned, many have complained that these companies don’t charge any fees directly but a part of the amount you are paying for the creditors goes directly into their pockets.

One of the common complaints regarding the debt help firms is that they are more interested in taking their fees before actually delivering what they promise. Another fear that is making the debt help industry nervous is that companies may be regulated as well legislated so that the incidence of fraudulent activities is greatly reduced.

Description: Debt consolidation non profit firms do not charge fees for offering their services. They operate from funds received as donation.

Thursday, July 16, 2009

Everything has to change because nothing changes.

Here we are,

Goldman Sachs yesterday and JP Morgan today are making plenty of money and the newspapers are already talking about new record in terms of bonuses...
As Is -> To be -> As before
Financial crisis are unfortunately useful to the sistem to consolidate, to purge the inefficiencies and, furthermore, are necessary to make the market makers richer and richer.
Since you cannot create, but just transfer money from people to the system you have to create speculative bubbles in order to sell dreams to common people and make huge profits with commissions, management fees, titrisation and so on.

The big question is: where will be the next bubble?

Two basic ideas/possible candidates:

-Green stocks, supported by the 'green wave' which is hitting the plane
-Commodities, supported by the growing production in China and India.The famous BRIC; B and R will support the I and C with their huge amount of commodities in order to overlap the old players

Which is your idea about that?


Picture from