In Your Shoes - Vladimir

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Hello, I'm Vladimir, the founder of Stock Doctor!

I teach investing to business owners, property investors and private individuals that are keen to learn about investing in the stock market for themselves.

Having climbed the traditional career ladder in the financial services, I realised that people working in the industry would often avoid taking risks with their own money and I was very curious to figure out why this would be the case.

Having interviewed many of my former colleagues ranging from client facing teams, operations and fund managers, I found that their biggest fear was exposure to excessive risk by being exposed to individual stocks.

Having dug a bit deeper, I found that the people who were already investing were primarily doing so through the funds they were directly involved with or they were directly managing. Some were doing so for purely ethical reasons and the others because it was something that they were familiar with, while the few that were actually exposing themselves to individual stocks were typically doing so on the best guess basis rather than having a full start to finish strategy in place.

This prompted me to investigate further and see if I could learn from someone who had already figured all this out. I ended up doing about 15 different courses on FX, stocks, ETFs, REITs, investment trusts, mutual funds and options ranging from day trading to long term investing and had numerous conversations with some of the leading fund managers to talk about the strategies that they were managing and approaches that they were taking.

After a few years of digesting all of that information and trying myself out in the markets, I came to the conclusion that they key to success for me was to first of all have the strategies written down and strictly follow them and secondly, that these strategies should have an edge over a series of investments rather than focusing on each individual stock.

I quickly realised that I would also need separate strategies for rising and falling markets that would be reasonably dynamic to various macroeconomic changes of the economy.

The courses and strategies that I teach today through Stock Doctor are the final product of all the lessons learned, losses & gains made and experiences that I've had first hand. If you are looking to start investing for yourself too, then please do not hesitate to get in touch and grab a coffee together as I'm always looking to help people out where I can, especially at the start of their investor journey which is the hardest part!

Monday: Semiconductors Making New Highs - Let's Explore What Was The Best Stock Pick for Beginner Investors!

Last week on Wednesday 21st of February 2024, we had Nvidia (ticker: NVDA) posting its phenomenal earnings which set many semiconductor companies to reach new all-time highs in the matter of days.

Just two days after the earnings were announced, Nvidia had made around 24% return for those investors buying the stock at lowest price on the 21st of February for $662.48 per share pre-earnings and selling them at an all-time high of $823.94.

However, because most beginner investors would typically not have a lot of money to invest in stocks, it is useful to look at who the competitors and think whether such news would affect the whole industry rather than just one company. One such company is the British semiconductor and software design company based in Cambridge, England - Arm Holdings (ticker: ARM).

When we look at the graph for Arm Holdings, we can see that in just three business days from 21st of February 2024 to 26th of February 2024 (close of business today), when it made its all-time high of $149.92, it actually made around 28% return for its investors and a big advantage for smaller investors is that they could buy more shares of Arm Holdings, as these were priced at $116.81, its lowest level on the 21st of February 2024. If you are asking yourself why is that better, let me give you an example of a beginner investor that only has $1,000 to invest - let's avoid currency conversions and platform fees at the moment for simplicity. Also, when you buy individual stocks, it is not possible to buy fractions of shares unlike in ETFs and Mutual Funds, so let’s include that in our assumptions as well.

In the case of Nvidia stock, the beginner investor could only afford 1 share of Nvidia stock as it was priced at $662.48, meaning that the remaining $337.52 balance would remain as cash on their investment platform's cash account. As they sell the stock at the all-time high level of $823.94 per share, their investment platform's cash account would now show $1,161.48, meaning that they only made 16.15% profit

If the beginner investor would have bought Arm Holdings stock instead with all their available cash, which was $1,000, they could afford 8 shares and the cash remaining in their investment platform's cash account would be: $1,000 - (8 shares x $116.81 per share) = $1,000 - $934.48 = $65.52. By selling their 8 shares of Arm Holdings stock at the new all-time high today, their investment platform’s cash account would now be sitting at $65.52 + (8 shares x 149.92) = $65.52 + $1,199.36 = $1,264.88, meaning that they made 26.49% profit.

The extra 10.34% capital gains made on the Arm Holdings stock can be attributed to two factors, first is because it had more time to reach its new all-time high – 2 business days for Nvidia vs 3 business days for Arm Holdings and secondly, because more money was employed to make the gains – $662.48 invested in Nvidia vs $934.48 invested in Arm Holdings.

Tuesday: All Eyes on Shipping Companies - Which Stock Will Come Out as the Biggest Winner?

Today I have been mostly focused on analysing container shipping companies that have been having a hard time passing the Suez canal for the last four and a half months due to the attacks of Yemen's Houthis.

During Covid-19 pandemic I've made around 300% return on investment in 4 months on a shipping company called Danaos Corporation (ticker: DAC), head quartered in Greece but listed on the New York Stock Exchange. What I've learned from that experience was that the shipping industry as a whole relies on various long term contracts and that an increase in the container shipping indices like Drewry World Container Index (WCI) would typically have a lagged effect on the shipping company's stock price. For example, while Drewry WCI made its all-time high in October 2021, it wasn't until March 2022 when Danaos Corporation made its all-time high of $107.47, meaning that the company's stock price was lagging behind the Drewry WCI by about 5 months. As we have about 47% to go until we reach the all-time high, I do find this stock quite attractive as it currently has 60.32% Net Profit Margin (Net Profit divided by Revenue), which the highest amongst all the shipping companies of similar size, while its Long Term Debt to Equity is the industry's lowest sitting at 0.13, meaning that the company has very low debt, which is a very good sign for a company in a capital intensive industry like marine shipping. Today (27th of February 2024) the company's stock price closed at $72.78 but I think it has got a bit of more room to drop before the bounce back up again, ideally would be looking to enter this at $70.00 per share or lower.

Another very interesting shipping stock that I am currently looking at is Zim Integrated Shipping Services (ticker: ZIM), head quartered in Israel while listed on New York Stock Exchange. Due to a combination of events like falling Drewry WCI between July 2022 and October 2023 and the ongoing conflict between Israel and Palestine, this stock was hit particularly hard. Because the Drewery WCI has jumped up significantly from the levels in October 2023, it will be likely easier for the company to transform from being a cash burner based on the high Long Term Debt to Equity of 1.18 and Net Profit Margin sitting at -34.71% to being a cash generator, although this is a much riskier stock pick than Danaos Corporation, there is potentially more upside to it too as risk and reward come always hand in hand. Today’s (27th of February 2024) stock closing price for Zim Integrated Shipping Services was $12.54 and I consider buying anywhere below $13.00 being attractive.

Wednesday: Teaching Day - Week 11, Stock Doctor's Growth Strategy

Today I was mostly off the markets in the active sense of this word but nevertheless, I was going through one of my 2 strategies with my current students called the Stock Doctor's Growth Strategy. We started with incorporating everything that we had learned over the last 10 weeks, which included screening 9544 companies and distilling down to only 6, where three were directly comparable as they were all retail banks. We went through a thorough fundamental analysis, technical analysis, adjusted our risk levels as we thought this was a slightly riskier company to invest in as few insiders had started selling their shares recently, including the managing director. However, we thought that this was still a good company to invest in at a reduced risk. The company that we chose was OFG Bancorp (ticker: OFG). We decided to hypothetically enter at $36.25 and spend £1000 on this stock which would give us 35 shares of OFG. Our stop loss was finally set to $32.70 and our first profit target was set at $43.25, giving us a $7 return per share or 19.31% potential return and potential $3.55 loss per share or 9.79% risk on the investment.

There was also a little task for the students to do at home, which was to listen to OFG senior management speak about the future prospects for the bank in the coming quarters. As I mentioned to my students this week, one of the reasons I would never start recording these courses is because the stock market always changes and what was relevant a month ago, is not relevant anymore, and hence my students wouldn't get the real world experience and the feel of uncertainty that investing brings.

Thursday: The Day For All The Business Meetings And Events

Today was a very productive day! I normally just have the Thursdays for all the meetings and events that I do. Today my day started at 5:15 AM just to get ready for the Visitor's Day at the BNI which is my main business network apart from DACC. It is super structured, but that is what I really like about it - no fuss, just business. This week’s BNI meeting was very productive in a sense that I got another 2 clients singing up for the 15-week program and I also managed to gain a few very valuable contacts for the future courses that I plan to offer through universities and colleges as part of their executive educations programs. The day continued with a few meetings with another three potential clients that were very keen to get started in March. People usually have a lot of questions when they sign up for high ticket courses like mine and to address any questions or concerns that they might have, I usually dedicate extra time to go through some of the things that I will be teaching and how is it different from the help they would get from an independent financial adviser. Easiest way to organise such calls is to email me at contact@stockdoctor.co.uk

After having all the client calls, I also had a one hour session with my psychotherapist. These sessions are mainly focused on me dealing with my inner fear of doing public speeches, which I was absolutely terrible at to begin with but slowly making a good progress towards through these sessions. Probably one of the biggest fears I have when speaking publicly in front of a big audience is the silence, as by default we are all geared to a dialogue and conversations by the very nature. Interestingly, I'm doing one of my biggest public speeches at the Bonar Hall next week as part of the National Student Money Week as the University of Dundee. After the psychotherapy I usually try to relax and get off the screens for a few hours, but that doesn't mean that the day is over.

On Thursday evenings I also have a call with a private hedge fund manager that our investor community members can invest in, to check how the fund has performed this week and what to communicate back to the fund's investors. As you might know, hedge funds have an advantage of profiting from the up and as well as down movements of the market, but are typically restricted to high-net-worth individuals. The private hedge fund that myself and my clients can invest in is very different, in a sense that you only have to have $25,000 to invest in it, while a typical hedge fund's entry amount would range anywhere between $500,000 and $10,000,000 just to get you started.

Friday: Friday or Friyay? - It Depends on the Dividends!

Fridays are usually a bit slower for me as I only tend to have the meetings that I could not fit into Thursday, but this Friday was a bit different as I had a good friend staying over the weekend to go for a few long hikes in the Cairngorms and enjoy a few drams at the Bertie's whisky bar at the Fife Arms Hotel in Braemar. Although I was away from the markets the whole day, the start of the month is always great for me because that's when I get my dividends paid into my investment account. As today was the 1st of March, it was exactly the time to celebrate, especially with a good friend that I haven't seen for a long time coming over!

What I normally do is, I calculate a percentage from the dividends to treat myself using my active income while the actual dividends stay in my investment account. If you ask me, why do I do it this way, the answer is because this allows me to invest more than £20,000 into my own and my wife's investment savings account (ISA) each year. So the trick is, while the ISA allowance is £20,000 per adult who is resident in the UK, all the cash dividends that get paid into your ISA are actually not part of that allowance. This means that in any financial year you can invest up to your maximum ISA allowance + any cash dividends that you have received. And the best part? Imagine that you had maxed out your ISA for multiple years in a row, this would mean that you will now receive even more dividends, meaning your yearly investment amount is substantially more than just the £20,000 yearly ISA allowance.

In terms of creating a portfolio of dividend paying stocks, there are multiple approaches people use. One is where you try to fill your portfolio with stocks based on when they pay their dividends and try to have at least one for each month, another is that you invest in stocks that pay monthly dividends - and yes, they do exist! As part of the investment strategies that I teach through Stock Doctor's investment courses, my second strategy focuses specifically on the dividend paying stocks. In the class, we learn how to identify them, how to compare them, which ones to avoid and when is the best time to invest in them.