While I was keen to "get started" chipping away at the 10k h milestone, I was lacking a little direction. Most mentors indicated that this blog, my equities research and valuation modeling was a good start. Other advice? "I wish I had started reading ROB [Globe and Mail's Report on Business] everyday BEFORE starting in this business / MBA", "Continue with your CFA studies" etc.
However, I was cognizant of a major self limiting factor: Without real experience, what I'm doing is just academic practice in a vacuum. When I brought this up, a VP at an M&A firm in downtown Toronto smiled and said: "Start trading with your own money. Put some skin into the game." His quick and sharp point raises a good point. As long as you can demonstrate what you are doing works, it goes a long way in developing your analytical skills. You live and die by your own sword.
I've started the process for opening a trading account where I will start actively trading. In accordance with CSC and CFA ethical standards, if I make any comments about stocks in which I hold a position, I will include full disclosures. Granted, I won't have much money in the game (just trying to demonstrate a percentage gain) and I don't expect my advice to really move the market (but as is listed at the top of this blog, consult your financial adviser before making any investment decisions).
My strategy will be as follows:
- TSE listed stocks only (Not enough US funds to trade US stocks)
- Good liquidity (tight spreads with mid to high trading volume)
- Stocks which are undervalued (PE / Book or other valuation techniques)
- Expecting capital gains (not really focusing on dividends)
- Probably biased towards tech stocks (due to my background and the profit potential in volatility)
- Probably won't hold individual stocks for too long
- I'll have to dramatically reduce my trading when I go to Rotman in Sept and,
- Will report my profit (as a time and money weighted return) on the last trading day of August
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