My investing approach...

My plans and overall investing strategy

I have to start by saying that I am not an expert nor I consider myself as a trader. My investing experience is short and here I am trying to show you my approaches to the market.

I think I mentioned in another mail that my knowledge come mainly from reading and applying The Intelligent Investor approach, I always try to look for companies with value at a discount rate. Also one of my main source of knowledge comes from the book Technical Analysis of the Financial Markets, which I think has been one of the best books to guide me in this journey.

I recommend checking those two books, they provide great value and insights.

I am here for the long run. Later in this mail I will tell you the composition of my international and Colombian portafolio. I invest in things I believe at a risk I consider not to be too crazy.

(But I also like to play around with crypto and meme coins, in which the volatility is crazy)

One of my main mental frames that helped me to organize how I wanted to approach investing came from reading Nicholas Taleb: the barbell strategy I took it as a way to identify my approach to risk. He mentioned this concept in his book The Black Swan

What I consider my main “safe-net” or low risk is 50% of my portafolio, I always avoid to keep any money in my checking account and invest it in index funds that track the SP500. I follow this by the advice of Warren Buffet which make me realize that in the long run the market always will outperform inflation.

Now, I also like to pick individual stocks that I know have a great track of being a respectable and long term companies. In this regard I try to always compare inside the industry the financial information of the company and the financial health of it, as well as a track of growth in the las few years and the overall debt. As stated in the Intelligent Investor, I compare EPS, P/E, EBITDA, BV/S, Debt/Equity, Acid test, cash flow…

I know is just a collection of numbers but at least it gives me an idea if the stock I am interested to get is in reality a good company in a good financial state with the possibility of growth. All I want to be sure is that investors are valuing positively the future of the stock.

The rest of my international portafolio consist in small trades that, honestly, I am really new at it and I just want to try if the risk/reward is as good as it looks. I am little by little having fun with option trading, which I see as a bet on a particular stock to go up or down on price.

Even if is a bet, I try to do research on the financial health of the company and a deeper technical analysis of it. Remember I am not expert or potentially good at it, but I check indicators like the moving averages and trend lines to guide me overall; then, I rely a lot in the MACD, RSI and volumes to see the overall sentiment of the stock. with this approach I can make my mind to place the option on a particular stock, also having in mind the context, maybe the company is in the midst of some sort of scandal that make the price go down or maybe there is a rumor of acquisition that makes it go up.

Now, the Colombian stock market I also have some positions. But here is my strategy on it. I am bullish on Ecopetrol right now and my main goal is to hoard on their stock for its dividend. Also here is my approach is the same, essentially I just wait on prices to drop and keep buying it. Right now I think the price.

But also the the Colombian market has given many valuable returns. in 2021/2022 the stocks were insanely cheap. a lot of people saw this opportunity and made a good amount of money, Argos, Mineros, Isa and Celsia were outstanding. I just wish I bought A LOT more. But at that time I wasn’t rally aware of the market and didn’t really have extra money to invest.

Also I notice that the Colombian market there is a weird thing, the value of preferential (Class A) stocks are cheaper or the same as the regular stock. People again took advantage of the undervalued market and I am happy for all of the people that make money out off it.

For now, I will keep my mind into the dividend style investing in the Colombia market, even tho the government is not helping a lot the industry, in the long run I am bullish on them.

This mail is just an overall composition on how I like to approach investing. I consider it my hobby and I honestly enjoy the rush of placing a trade, right now I think I am starting to rise my risk and try to be more aggressive. I would say because of my age and because in reality nobody depends on me, I am willing to up my risk, specially in option trading and crypto.

If you have more insights about the market and you would like to discuss your investing strategies, always shoot me a message in twitter: