Looking for an Amazon Replacement to Make More Ridiculous Returns
Alpesh Patel
CEO Investment Fintech | Int’l Best Selling Author — TV Presenter| 24option Partner | Fintech 4 Financial Literacy|
My portfolio is unbalanced. And it’s making me unbalanced. Amazon has risen 67% since December alone (including GBPUSD changes). It is disproportionately large in my pension pot.
I wanted to walk you through a journey as I think it will be educational.
First the rules:
- What is suitable for me, a married man in my 40s, a young childm may not be for you.
- I am not looking for the next Amazon. Look at the chart — Amazon which I came across around 1997 flatlined for years.
- Wealth in the UK used to come from owning properties. Many an illiterate millionaire in London proves it. In the US from shares. As the UK property tax changes bite, I reckon the US stocks remain open to me.
- I have access to an immense amount of data, let alone expertise, so let’s use every edge.
- I want stocks which are large for safety (not a rule I know), and which have already started rising. I want companies relatively undervalued, but show momentum and growth. So I will look at their accounts for these things.
- I then ranked and rated these aspects based on weights I attached to valuation, growth, income and momentum factors.
I am removing any companies under £1 billion in market capitalisation. I don’t want the very huge eg Coca-Cola and Merck as they probably will not give me Amazon in 2003 to 2018 returns.
I also want companies with a consistent rise over 5 years. So the likes of CVR are out. Basically I want something which looks like Apple in 2011 or 2007:
Short List
Now looking at important data — some of which is below. I weigh valuation based on earnings, revenue growth consistency, return on capital, price to free cash flow, price to book value.
So let’s now narrow down to my short list.
CEO Investment Fintech | Int’l Best Selling Author — TV Presenter| 24option Partner | Fintech 4 Financial Literacy|www.alpeshpatel.com
Originally published at https://www.linkedin.com on August 16, 2018.