Welcome to my portfolio! The Motley Fool has given several of its analysts money to invest in real time, giving you a chance to get even more investment ideas (for free!) from The Motley Fool.
I've been at the Fool since the fall of 2007, but was a longtime contributor to its discussion boards and the Stock Advisor newsletter before that. I'm also a graduate of the Fool's internal analyst development program and am currently working to obtain the CFA charter.
The name of my portfolio is "Messed-Up Expectations." These are what the market gives us when it gets a bit inefficient, when it expects -- as shown by the share price -- much, much less than what the company is capable of producing. Taking advantage of these and waiting for the market to realize its mistake is a simple-to-understand way to do well while investing.
This idea -- which I first ran across in Expectations Investing by Michael Mauboussin -- turns the traditional discounted cash flow calculation on its head. Instead of predicting growth (a difficult thing to do in the best of circumstances) to calculate a fair share price, you determine how much growth is priced in at the current share price, and then ask, "Is that reasonable?"
For instance, Apple
In my own portfolio, I've had success approaching investments through this lens. I jumped onto the Garmin situation, though I missed adding to my Apple position at that low $90 price. But I did take advantage of the opportunity to purchase Transocean
The psychology of investors in the market isn't going to change much going forward. I feel confident that we'll have many opportunities to pick up MUE stocks and ride them to superior returns as others realize the companies aren't dead, after all.
Come join me on the journey.