Interview with Professor Glen Arnold – Part 5

This is part 5 of a 5 part series. Read part 1, part 2, part 3, part 4.

You can watch the video here: https://youtu.be/5vQDutu4PEo 

Professor Glen Arnold

Professor Glen Arnold: Yes. I use both return reversal and piotroski.

Kingsley: But for the return reversal effect to actually help your portfolio, I suppose you need a large number of stocks? I suppose?

Professor Glen Arnold: Yes but it narrows down pretty fast because let’s say you look at all of those companies that have gone down by at least 80% over the last 5 years, that gives you a list of maybe 50 companies on the market. But then you start very pointedly eliminating companies because their piotroski scores are so bad. A lot of the ones have gone down by 90, 99% but not on the databases because you are using databases first. When you use ADVFN filters [Inaudible] … A lot of them are dodge companies. Many of them are just about to go bankrupt. It is very obvious. Or have just gone bankrupt. That eliminates a whole lot of them. Then you start off by Piotroski factors. You will find most of them have got very very poor piotroski scores. Very few have Piotroski scores higher than 6, 6 or higher. So it ends up with quite a small list actually.

Kingsley: Ok ok.

Professor Glen Arnold: Sometimes, only 1 company.

Kingsley: Oh wow. Ok ok. The next question is if you were managing large sums of money of more than $100 million, would you still use the modified PE and net current asset value strategies?

Professor Glen Arnold: Yes I would. But my discovery over the last 5 years is that net current asset value investing is best applied to companies with pretty low market capitalisations. Now the companies which we have mentioned today, I mentioned a company with a market capitalisation of about ₤3 million, another one with ₤7.7 million, another one was ₤3.9 million, ₤19 million. So yes I would use some money for that purpose. But you wouldn’t be able to use up a lot of that $100 million in net current asset value investment. They are just not available. So I am likely to apply more of it to cyclically adjusted price to earnings ratio, and then apply Piotroski and then apply all my qualitative examinations which we have talked about.

Kingsley: Ok ok.

Professor Glen Arnold: And I will be looking at more Warren Buffett style investments as well. And if it was all my money, I would be looking at doing what Warren Buffett does, which is buy substantial stakes, you notice that Warren Buffett would buy 10% of a company, he bought 10% of Washington Post and then occasionally he would buy 100%, buy See’s Candies, 100% of its shares. If it was my money I would look for that type of investment and not be afraid of illiquidity in my holdings.

Kingsley: I see I see.

Professor Glen Arnold: But if I was handling other people’s money, maybe I have to be more cautious on illiquidity. Because other people might turn around one day and say that we want our money back next week. In which case, you got it all tied up in something as illiquid as a 40% holding in a ₤10 million market capitalisation company, you will not be able to do that.

Kingsley: Ok ok. Are you intending to manage a sum of money or are you managing a sum of money, as in other people’s money right now?

Professor Glen Arnold: I handle nobody else’s money. In the UK, there are strict rules about handling other people’s money. And it seems to me that you have to spend a lot of time filling in forms, following regulators rules, appointing managers for this, managers for that. Then you got to do the marketing and I just figured what was the point in me doing all that? I would rather just handle my own money and just invest in the stock market by myself and just put my analysis out there for other people to use it. Having said that, I would handle high net worth individuals if they were prepared to allow me to do that. So one way that you can do that is if somebody set up a company and he wanted me to be a corporate treasurer of that company, or a financial adviser, an investor or a fund manager, then I would be prepared to act as a corporate treasurer.

Kingsley: I see. Wonderful!

Professor Glen Arnold: You understand what I am saying.

Kingsley: Yes yes definitely.

Professor Glen Arnold: But running a fund or being a financial adviser, no, I don’t want the […Inaudible…] associated with it.

Kingsley: Ok ok. So the last question but not least. Can you share with us some of the books that you have written and how we can actually get out hands on them? And how do we get access to more of your wisdom?

Kingsley and Professor Glen Arnold: Chuckles …

Professor Glen Arnold: I certainly write every day in my newsletter. I don’t post every day because it often takes me a few days to do the analysis. So that’s on my … if you look at my blog/website, my personal website, just put in Glen Arnold Investments you will find my blog/website and that will tell you, show you my blog on which you can see the introductions to each of my newsletters which refers you to the full version which is on ADVFN. And as I say the subscription for that is ₤6 but I think it is going for ₤6.60 per month. So it is not a great deal of money.

Kingsley: That’s a good price. That’s a really good price.

Professor Glen Arnold: The way I look at it I would rather have more people engaged in the process of helping me to invest, giving me ideas, interacting with them, because the most important thing for me is setting down my thoughts in a structured way, a logical way and if you do it for other people, you have to do that, you’d have to concentrate so much more doing well. So it forces that discipline on me. So I find that valuable. I’d rather have more people that really want to [work]. So at the moment I have about 75 subscribers and they are very very helpful. So there is that possibility if people want to tap into that. And my books, they are all available on Amazon one way or another. Any good book stores. I think following on from Koon Yew Yin’s site, there is support for me maybe in Malaysia and Singapore. I don’t know. The books certainly did sell there. But the [Inaudible].

Kingsley: Ok wonderful. So this brings me to the end of the interview. I really enjoyed my time with you. You have been very generous with your information so thank you so much! Really appreciate it!

Professor Glen Arnold: It’s been a great pleasure talking to you Kingsley. Thank you so much!

Kingsley: Thank you sir! God bless you! Goodbye!

Professor Glen Arnold: Goodbye!

 

This is part 5 of a 5 part series. Read part 1, part 2, part 3, part 4.


Professor Glen Arnold’s Books & Other Resources

The Deals of Warren Buffet

Did you know that it took 40 years for Warren Buffett to amass a wealth of $100 million? Professor Glen took time painstakingly studied the deals of Warren Buffett in his formative years as an investors and includes many key insights other books may have missed.

 The Deals of Warren Buffet

https://amzn.to/2QfH0fi

Financial Times Guides: Value Investing – How to become a disciplined investor

This book was originally published as Valuegrowth investing. If you’d like to learn how to beat the markets, this book is a great investment.

Financial Times Guide - Value Investing

https://amzn.to/2RdKlwH

The Great Investors – Lessons on investing from Master traders

If you want to learn lessons about Graham and Buffett, this is a book that may shed some light on some of the greatest investors in the world. As

The Great Investors

https://amzn.to/2NcHP6L

Financial Times Guides: Investing – The definitive companion to investment and the financial markets

If you want to know how to start out investing, I suppose this is the book that you can look towards to get you started on the basics of not just equity markets, the debt markets, derivative instruments such as options and also basic accounting as well.

Financial Times Guides: Investing

https://amzn.to/2NRwkXD

Harriman’s Book of Investing Rules

This book is a shared project by Professor Glen and others.

Book of Investing Rules

https://amzn.to/2OVPlEF

Get started in shares –  Trading for the first time investor

And another great book for getting started in investing in shares for the amateur investor.

Get Started in Shares Trading for the first time investor

https://amzn.to/2Nasofz

Professor Glen Arnold’s Blog/Website

 Professor Glen writes nearly daily but publishes his articles every week for readers of his newsletter. In his blog, you get an introductory glimpse in these articles. You can see more at the link below.

 http://www.glen-arnold-investments.co.uk/background.html

 

Professor Glen Arnold’s Newsletter

For more of Professor Glen’s wisdom on real time stock considerations, you could subscribe to his newsletters at ADVFN, a data service provider. In his newsletters, he talks about his current stock picks and includes many case studies on companies that had once been purchased by Warren Buffett. I suppose if you are short on ideas and want an expert’s opinion on what to buy, this is the place to be. Also, he has written such a great number of articles over time that getting access to them seems to be a good idea to get started in investing. If you truly want to know what works in investing, this is one of the better places to be. More importantly, you also get a chance to interact with Professor Glen on ADVFN. Do click on the links below.

 https://uk.advfn.com/newspaper/authors/glenarnold

 http://newsletters.advfn.com/deepvalueshares/subscribe-1

Other Articles

Floyd Odlum : The Deep Value Investor You Have Never Heard Of

Net Current Asset Value Investing In Japan

65% Profit In 1 Year For Beaten Down Cash Bargain : AEI Corporation

Junkyard Net Nets From Japan : Leader Electronics Corporation 6867 > 100% Profit In 6 Months

A 10 Bagger Net-Net – A Look Back At Barratt Developments PLC : A Net-Net In 2008-2009

Paying Up For Growth: You’d Better Know What you Are Doing

Books On Net Current Asset Value Investing : Case Study Driven

These books which I have written are case study driven and discuss strategies, mindsets and situational approaches to employing the net current asset value strategy.

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kingsley

I have been an investor for 15 years now and my journey has meandered from Warren Buffett to Ben Graham. My start, like many, really was the naive idea that Buffett's skills could be replicated in some fashion. I was proven wrong when some of the supposed stock picks that I chose had dismal performances. Then, I learnt that it is no point trying to be someone I am not. Gradually, through failure and some success in deep value investing, my approach towards stocks gradually shifted to an approach based around Graham's techniques. So, I give credit where credit is due and to Ben Graham, I and many other investors around the world, owe him a great deal. So, if you want to read up on biographies, read about Ben Graham. His seminal work, Security Analysis is a gem. My books are just rich interpretations of what he has taught.

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