Best Shares To Buy Now For The Long Term

Many investors will be feeling bruised and battered after a year or two of punishing stock market conditions. Even those who don't purchase shares directly will be feeling the pain. Superannuation returns have plummeted and most managed funds have gone backwards as well. So how do we as investors go about finding the best shares to buy now that stock prices seem to have stabilised?

In this post I'd like to describe some of the criteria I look at when investing. With share prices cheaper than they've been in years (although not as cheap as they were in March) I think now is a good time to buy shares provided they are as a long term investment in a quality business.

Value Investing Podcast - The Value Guys

Who said value investing has to be boring?

If you're a stock market investor with a bias towards buying value, then The Value Guys podcast might be right up your alley. Although it's a sometimes light-hearted discussion of stock investments, the principles these guys apply when analyzing a potential investment are well worth listening to.

The two protagonists on this weekly podcast go by the names of Val Hughes and Vern Value (they're at pains to point out that thee names are not real). In each episode Vern and Val pick 3 stocks each which they think may be undervalued and put forward their arguments as to why this might be the case.

Although The Value Guys mainly discuss American stocks, those of us investing in the Australian stock market will still get something out of it. As I mentioned earlier, I find it interesting to listen to the way they approach valuing these companies. And they're entertaining as well.

You might also be interested on the Australian Stock Exchange podcasts and the Gannon On Investing podcasts.

Buying International Shares

Should Australian's buy overseas shares as part of a balanced investment portfolio?

The Australian stock market is a very small portion of the overall investment universe - less than two percent, depending upon who you listen to. So today I'm going to explore why you might like to consider investing in international shares as well as a discussing some of the options.

The reason I started thinking about this was that I was recently reading about an investment concept known as asset allocation. The idea behind asset allocation is that you spread your investments across different assets classes with different risk profiles and for which returns are not always correlated. One of the asset classes suggested by many financial planners and other investment professionals is international shares.

Asset Allocation - Investing By The Numbers

What is asset allocation and how can it make you a better investor?

I've been reading a lot about asset allocation lately. I don't recall what prompted this sudden interest. Perhaps it's a factor of age. My investment strategy has always been heavily skewed towards Australian shares, for a number of reasons, but mainly because shares traditionally have a good return when compared to other asset classes and although they are more volatile, since retirement is still a fair way off, I was happy to accept the volatility in exchange for higher returns. However, while retirement is still a fair way off, it's still something which I need to take seriously as the recent fall in world stock markets would have been disastrous if I was about to retire.

Value Investing - Buying Shares For The Long Term

Investors buy shares in Australian companies for many reasons. Some buy stock in a company simply because they think the share price will go up, some may purchase based on the advice of their stock broker and some may even take the plunge based on a tip they received down at the pub on the weekend. However, today I'd like to discuss an alternative approach to the Australian stock market called value investing.

Value investing is an investment strategy or paradigm based on the teachings of Benjamin Graham and David Dodd going right back to the major sharemarket crash and subsequent great depression in 1929. In a nutshell, it involves buying shares at prices which are a significant discount to their intrinsic or underlying value based on fundamental analysis.

Buying American Shares

Why should you consider buying US shares and how do you go about making your purchase?

The Australian stock market makes up only a couple of percent of world equity markets by market capitalisation while the US stock market is a whopping 30% (based on some figures I found relating to values back in early 2007). This is a marked contrast and may give you an insight into why you might consider buying American shares.

Apart from being a much larger stock market by market capitalisation and having an economy many times larger than Australia's, there are many more companies listed on US stock exchanges including some of the largest in the world.

Are Directors Buying Shares In Their Own Companies?

Before deciding whether to buy shares in any given company, there are a number of things I look at. One of things I check out is what the insiders are doing. By this I mean looking at whether the directors of the company I'm interested in have been buying shares recently (or maybe selling shares instead). Since I invest on the Australian stock market, I'm able to find this information fairly easily as companies listed on the Australian Stock Exchange (ASX) are required to report directors transactions to the market.

So why should I care whether the directors are buying or selling shares? Well, the directors of any listed company have (or maybe I should say "should have") a pretty good idea of the prospects of their business. If they're buying shares then it's probably a sign that they are comfortable with the future of the company and see value in its stock at the prevailing market prices. Similarly, if you notice that a director is selling shares in their own company, it could be a sign of trouble to come - maybe they consider the stock to be over valued or they could be anticipating weakness in the business in the future. However, this is by no means foolproof. It's entirely possible that the director is selling just because they need to money for something else.

One of the more interesting Change of Director`s Interest Notice's issued last week was for Harold Mitchell who bought 295 thousand shares in Mitchell Communication Group Limited (ASX Code MCU). Mr Mitchell now holds in excess of 83 million shares in the company. The purchase price was around 45 cents per share and compares to a current price of 33 cents. MCU has traded as high as 99 cents in the last year after peaking at over $1.40 in 2007.

Mitchell Communication Group is a diversified media group and from what I understand, Harold Mitchell is known as a mover and shaker in the media buying industry within Australia. The most recent purchase is one of a number of recent acquisitions of MCU shares by Mr Mitchell.