SIMON SHEPHERD | The Investment Newsletter Group

How can you navigate the plethora of investment newsletters? I welcome back Simon Sheperd, founder of The Investment Newsletter Group (TING). We talk about selecting the right investment newsletter, decoding their different styles, and benchmarking their performances.

Go to TING to find their latest quarterly update, or download their latest Spotlight Report on Stockopedia.

We talk about different newsletters and services, emphasising the significance of a unified approach in investment decisions, and the benefits of using tracking websites like Sharesight. Simon provides an in-depth view of small cap investing, highlighting the risks and benefits it presents.

We also delve into the core and satellite approach, position sizing, and risk management. Simon shares actionable tips on how to find the right investment newsletter and the crucial questions investors need to ask to make smart decisions. This episode contains serious lessons for investors wanting to leverage investment newsletters to their advantage.

TRANSCRIPT FOLLOWS AFTER THESE BRIEF MESSAGES

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EPISODE TRANSCRIPT

0:00:01 - Chloe

Shares for beginners. Phil Muscatello and Finpods are authorized reps of MoneySherpa. The information in this podcast is general in nature and doesn't take into account your personal situation.

0:00:12 - Simon

Try to work out what kind of investment approach you like. What's your investment personality? Because there's so many different styles out there which you can broadly bucket into three or four, which we try to do on our report Because ideally, in our view, you want to find something that matches your personality and the reason. That's important. If you don't, again, when you're losing money, you're going to be tested and what we want to avoid is people jumping ship and changing pack, because that's a great way to destroy capital very quickly.

0:00:40 - Phil

G'day, and welcome back to Shares for Beginners on Phil Muscatello. There's a plethora of newsletters that claim to provide smart investment choices for our portfolios, but how do they stack up? Joining us today is Simon Shepard, principal and senior partner at Providence Advisory. G'day, simon, hi Phil, how are you going Good? Good Thanks for coming back. Pleasure. Simon's a seasoned financial advisor, planner and personal wealth coach. He's also the brains behind the Investment Newsletter Group, or Ting, a project that is tracking the recommendations from leading investment newsletters. We spoke before in March 2023, and I'll link to the previous episode for listeners to do the appropriate background checks on you, but run us through again what you're doing with Ting.

0:01:23 - Simon

So really, ting's a research or a screening tool for self-directed investors and the main objective is to track a selection of recommendations from some of the big newsletter services out, mainly focused on the Australian market, and we've been running just over two years now with the original dataset and list of services, so you might call it a findercom for investment newsletters perhaps.

0:01:47 - Phil

Actually I was looking at findercom last night and they've got a kind of a list of investment newsletters. They do, they do. They can stack up quite as well as you have.

0:01:54 - Simon

It doesn't go as far as analyzing results. No, it doesn't go, it's just kind of a review thing. Yes, exactly.

0:01:59 - Phil

Yeah, this is something that I'm finding intriguing. Now, what is an investment newsletter? I mean, is that the correct term?

0:02:06 - Simon

It's what we call it Research Service, investment Newsletter, stock Newsletter, stockpick, tipsheet is perhaps more of an old-fashioned expression, but basically the objective of those whatever you want to call it those services is to help investors select investments. Basically, a list of Australian shares is the core of most of the services that we look at.

0:02:29 - Phil

Yeah, and they're usually subscription based as well, aren't they?

0:02:32 - Simon

Yes, pretty much. We're actually going to be adding one soon. It's a different model which, if we get a chance, we'll have a chat about. But yeah for the most part, they use a pay-as-type approach.

0:02:41 - Phil

Yeah, okay. So you've got some milestones, or you're hitting your two-year milestone. What are the milestones and what have you reached?

0:02:48 - Simon

Yeah, so I think it's great too. We've just clocked over the two-year mark In terms of tracking seven of the main newsletters, so we started building what we call a virtual or a hypothetical paper portfolios back in one July 2021 and just clocked over the two-year mark. So sometime the next week or two we will release the results and the rankings, so I think that's great news. The longer the data, I think the more reliable the information you can glean as a potential user or investor will be. So it's great to cross that two-year milestone and see how things are tracking.

0:03:25 - Phil

So which of the newsletters that you are tracking?

0:03:26 - Simon

Yeah, great question. So I can jump on our website, tinglivecomau, and that's T-I-N-G, which stands for the investment newsletter group, but at the moment the ones we're covering intelligent investor, also known as the Eureka group it's sort of a subset of their broader service and newsletter. So Stockopedia, Morningstar, Simply Wall Street, Motley Fool, Fat Profits and a group called Wise Owl as well. So they're the seven at the moment.

0:03:56 - Phil

So you've introduced a metal system to make it easier to see who's beating the market and how it's performing. What's the metal system look like?

0:04:03 - Simon

Well, the idea is just like a race or an Olympic competition gold medal being the best performer. The way we categorize it with our ranking system is only one service on newsletter will ever get a gold medal, and that's hopefully one that's beating the market. So far, so good, and also beating all its competitors as well. So gold medal goes to the top service or the top performing newsletter, and then silver would be any service that's still doing a good job of beating the market, because at the end of the day, that's what we're here for. Really, we're not doing this. Well, you may enjoy the investing piece, but ideally you want to be able to beat the market Earn a bit of dollars.

That's right, otherwise, we'll bother right, and the Bronze Star category really relates to okay, well then, maybe not beating the market, but at least achieving a positive return over the measurement period, in this case two years. And so we just thought try to keep it as clean and simple as possible. Some kind of you know graphic and the sort of the metal ranking seemed like a good idea.

0:04:59 - Phil

Is it easy to compare apples with apples in the case, because presumably they're going to have different styles and different ways of offering their services to consumers.

0:05:09 - Simon

Yep, we try to take a unified approach as best we can, but depending on the style of investing, they do all have different ways of recommending what to buy or what to sell. So we sort of adapt. Or we start with a rule book where we try to build a portfolio of 12 stocks for each service. So the establishment approach or method is a little different depending on each service. And then once we've built the portfolios, we stick them in ShareSite, which is a great tracking website, to see how they're going, and we've got all that data there in the history and so ShareSite just sort of spits out the numbers and says the least one is doing better than the other.

That's right and that's what we feed into the website reports.

0:05:48 - Phil

When you first started this. I remember the last time we spoke here. It was a response to some of your clients, as a financial planner wanted to have an idea of the best way to approach the market. Is that the case? Is that how?

0:06:01 - Simon

Yeah, definitely part of it. Or also, in a weird kind of way, the clients that would come into our office and then realize that they wanted to try and do it themselves. And so we thought, well, what's another way we can help them to refine that process, to take some of the legwork and the heavy labor intensive if you're doing it properly the due diligence of the plethora of different services that are out there. So in a way, it's almost the antithesis I say that we're probably of like a full service investment planner. It's those the rest of the people out there that want to have it go themselves, and that's a tool to help them, you know, make that decision quicker, right, in an ideal world it shouldn't be the only tool, but if it can just, you know, independent analysis of a sample of those recommendations from some of those big high profile newsletters then we think that's a good service.

0:06:51 - Phil

Does it also help investors to have these services to decide when to buy and sell, and rather than what to buy and sell? Because there's always that psychological element as well, when the market's going through one of their regular downturns, that you really need your hand held.

0:07:05 - Simon

I think the what's probably the priority, the point of a newsletter, I guess, or a service, is let them do the work and the research and sort of ferret out what they like in terms of opportunities, investment opportunities and in terms of the when you know, then I guess that's what you call the execution side, as you said when do you buy, when do you sell, etc. And so the answer to that depends on the type of what I would call risk management approach you take, or rules approach, in terms of if things are going really well or if they're not going well, what action do you take. And if you want to completely outsource that, in other words rely on the newsletter, then yes, the when is really important. If you've kind of got your own system, then the when is less important. So again, it just depends on the type of portfolio you're running and your risk management approach.

0:07:54 - Phil

So there have been changes to the services covered than some removals and additions. Why was that?

0:07:59 - Simon

Yeah, look, great question. What we've found over time through history is things never stay the same. So, for example, we actually started covering Lonsec for 12 months and they're, in a way, competitive morning star. You know very big, deep, where well researched investment house, not just direct shares but managed funds. They supply a lot of financial planners with research and you know the portfolios are doing fine. And then just out of the blue, they canceled the direct share service. So that's an example where the decision was made for us.

Another service we were tracking, which is still on the website but will change soon, was a group called Stocks Down Under and I'd probably describe them as more of a small cap focus. They changed their pricing model about three or four months ago and sort of wanted to push everyone onto a much more expensive service. So that was sort of the first you know alarm bell for us. I guess the other issue we had with stocks down under putting aside the performance, you know, whatever good and bad, whatever it is but the just the level or the amount of stocks that they recommended was not enough to, in our view, build a diversified portfolio. So if you were going to use their service and they had some great calls.

Don't get me wrong. In our view you would have probably had to subscribe to something else as well. So you know, they kind of forced our hand a bit. We just, we just didn't see value in paying the full, the full fee for a limited amount of selections. And you know, let's hope they're making money for their subscribers. They seem pretty optimistic and believing in their product, which is great. So you should be so. Yeah, from time to time that'll happen and we always want to try to maintain at least a universe or a coverage of seven newsletters. In that case we swapped out stocks down under for a group called WysL, and that's some. You know, from time to time we'll have to do that, but hopefully, you know, we want sort of a long term stable coverage, universe, in inverted commas, as best we can.

0:09:47 - Phil

Some things will be out of our control, and is that one of the two that you've added to the oh?

0:09:52 - Simon

no. So why is that is what we call a swap out. So we yeah, we were good question. We managed to again jump in that time machine, inverted commas and go back to two years ago and basically recreate the portfolios, and so it's as if we started on one July 2021. So that was, you know, one of the great things about why is that is they are very open and transparent with you know what they own, what they've sold, et cetera. So that made it quite easy to go back and recreate the portfolio. So we've just been able to swap it out from Stocks Town under and the two new ones.

So the two new ones that we are about to launch, they're very high profile, actually in both different styles. The first one is a group called deep data analytics and they're kind of, I guess, a macro, bottom up, top down type style. That's the way that Mothan describes it on his website.

And then the other one is Marcus Today again very high profile and you know they're probably more of what I'd call a sort of a traditional stockbroking type Lots of stories and colour and less data driven, like the deep data analytics more, more sort of a little bit gut feel, fundamental, some macro that we're looking at and part of the reason we selected those. Again, the objective with Ting is to really try to have a good variety of styles and approaches so hopefully, you know we pick up something for everybody in our service style.

0:11:12 - Phil

So for new investors it can be really hard because they see some of these services and I mean it's almost the question of where do you start? Yeah, exactly.

0:11:23 - Simon

A spot for choice. A spot for choice, but without a confusion. Indeed, maybe too much choice, yeah Look, I think the first thing is sort of take a step back and work out what your objectives are. Really important, I think, whether you are your financial advisor. Always say that, and I think we've got that in the disclaimer as well.

0:11:41 - Phil

Indeed, it's about beginning with the end in mind, right?

0:11:44 - Simon

So you know what are you in? It for? Why are you doing this? Why are you trying to do it yourself? What's your time frame? All those kind of things are important.

0:11:52 - Phil

And understanding that it is really difficult to beat the market.

0:11:55 - Simon

Oh, absolutely, yeah, it's very hard and I think the biggest enemy per our last chat is the enemy within right.

The inner voice, the psychology when things aren't going well. You'll be tested and it's so important to have a robust process and be confident. So, yeah, step one would be work out your objectives. Then step two is research the options that are out there, and hopefully TingLivecomau can help you do that. It's a great starting point in our view, because we've done the work at least on a sample of return, so you're not flying blind as to whether or not someone's going to make your money with their recommendations.

And then step three again, which we talked about in the past, is really try to work out what kind of investment approach you like. You know what's your investor personality, because there's so many different styles out there which you can broadly bucket into three or four, which we try to do on our report, because ideally, in our view, you want to find something that matches your personality. The reason that's important if you don't again, when you're losing money, you're going to be tested and what we want to avoid is people jumping ship and changing tack, because that's a great way to destroy capital very quickly and confidence as well. And probably the last piece would be it's not. You know again the little disclaimer fine print on every report. Past returns aren't necessarily a guarantee of the future, but I think you know it's certainly a good place to start and the longer the data set and the history, and if that history is demonstrating continued outperformance or bidding the market, that's probably a good place to start. But do more work from that point, of course, in terms of research.

0:13:28 - Phil

Not only is it difficult to outperform the market, but it's even more difficult when you take into account the money that's going out going to these services and then a share side account, for example you really have to factor these into your returns and you know, okay, you might have the bulk of your money in an ETF or a managed fund or whatever. But it's really important to keep in mind that all those costs matter as well in your overall returns.

0:13:56 - Simon

It does absolutely, and I think it's a scale game. In other words, you want to have a minimum pot of money to play with so that you know those costs as a proportion of your investment capital are reasonably low. So if you had asked me to quantify that, I mean, I would think not everybody can afford to do this, but probably $100,000 would be a good start For better or worse. We just assume, like an imaginary portfolio of 12 positions starting with $10,000 each. We figure that's kind of a good point. That is enough size that those costs don't destroy your returns.

But you know, not so small as that it's not. You're kind of wasting your time, etc. So yeah, and again, not indirectly, but a screening process for the services we use is, you know, cost is definitely a factor. Some services charge thousands of dollars a year and probably on average the ones that we cover would be in the $500 to $1,000 a year mark. So as a percentage of a $100,000 portfolio, you might be half a percent, 1%, and if they can beat the market by half or 1%, there's your hurdle. Obviously there's other costs as well, but you might have super as well. You might have your own investments or family trust. So you know again, it's a scale thing. The more you're multiplying out the benefit of those recommendations across multiple portfolios, then obviously you get more value as well.

0:15:13 - Phil

Yeah, it's a proportional thing, isn't it Exactly so tell us about the other developments and the spotlight report.

0:15:21 - Simon

Yeah, so we want to keep developing new ideas and providing more resources for potential subscribers to the newsletters.

So we've launched a new product I guess you call it a deep dive or a deep analysis of the plan is to review each of the newsletters and we call it a spotlight report, and so what it is is what we would think would be all the useful information that you want to know as a potential subscriber to particular newsletter.

And so on our website at the moment, on the media and research tab, you'll see a spotlight report for Stockopedia, which is the first one that we've published, and I guess, again, not just returns, but what we're trying to do is ferret out across each newsletter what their points of difference might be, what sort of their again throwing around marketing terms here, you know, value proposition, whatever it is, but the bottom line, what's their magic sauce? And so the idea or one of the objectives with the spotlight report is to highlight that, as well as all the generic stuff how many stocks do they cover? Do they do other things like ETS, manage funds, what are the rough cost outline, and so on and so forth, so that you can quickly again, without having to go through 10 different websites. Just run this report and great, you've got it all there in front of you ready to go, and that work's done for you. So over time we plan to roll those out for each service, each newsletter.

0:16:44 - Chloe

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0:17:00 - Phil

And it's interesting to go through that exercise anyway just to read about what these newsletters are doing, because it's a valuable education in terms of the way they approach markets and, in turn, that you can learn how to approach markets as well.

0:17:15 - Simon

Yeah, that's right and it gets back to that thing we talked about with the investor profiling or the investor personality type. The more you read and research that, the more you'll get a feel for what might resonate with you as an individual definitely.

0:17:29 - Phil

Do you have any takeaways from the spotlight on Stockopedia?

0:17:31 - Simon

Not really. It's still early days. Obviously, in this case the objective is to run it by the actual service as well before we publish it, so we give them the choice for import and stressing that we are independent. So if they give us feedback, we don't always guarantee to reflect that in the report because we want to remain independent and unbiased. But I guess another way of answering your question was we pretty much got an all clear from the team at Stockopedia, a couple of minor tweaks, so that was good that. I think we're telegraphing the intent of what that service does and that's what we'd like to do with all the services over time. So again, it saves you having to wade through 10 or 20 pages of marketing blurb on their websites. And there's a lot of stuff out there. It's great, but it's again it's about filtering out the real information from the noise and the marketing blurb and that's sort of one of the objectives of the spotlight report is to do that work for subscribers.

0:18:23 - Phil

Get away from the sizzle straight to the sausage.

0:18:25 - Simon

Exactly.

0:18:27 - Phil

Exactly right. And the reason why you're here today is as well, because you've just released a quarterly report, the latest quarterly report. Tell us about that.

0:18:34 - Simon

Yep, we're just ruled off on the June quarter and a couple of shifts. That the winner still at this stage. The gold medal, still held by an intelligent investor for the two year trap record, Still betting the market by a comfortable margin. And then the silver medal, still held by stockopedia, In other words beating the market as well. The bronze medalist we have one drop off. So at the moment the only bronze medalist there and again, to refresh everyone's memory, bronze is just some kind of positive return, so better than sticking money in the bank or whatever, not losing money on paper. So at this stage, just Morningstar that are sitting there with a bronze medal. Previous chat or report run, we also had simply Wall Street, but not a major negative return. But again, in terms of our strict criteria for awarding medals, there's only three medal winners on the podium at the moment, so to speak. So again, time will tell.

0:19:27 - Phil

But that's yeah, that's the main change, I guess, in terms of the shift and that's no reason to discount or reject any one of the newsletters just based on a particular return over a particular quarter, is it no exactly? You've got to look at it in a wider context in terms of what you want to. As you said, what you want to achieve, whether the style of it I mean a lot of people like the simply Wall Street.

0:19:50 - Simon

Absolutely Interface.

0:19:51 - Phil

It's a very very nice clean interface as well.

0:19:54 - Simon

Exactly right.

0:19:55 - Phil

And what do they call them? The snow drops.

0:19:57 - Simon

Yes, snowflakes, snowflakes, exactly. Yeah, it's a clever approach and so that kind of analysis works well with people who are visual and they're less about crunching the numbers or reading a five page stock report on why you should own the stock. So, yeah, the great thing about the Aussie market and the services, the newsletters that are out there there really is something for everyone, so we are blessed with plenty of choice.

0:20:22 - Phil

So do they focus on particular areas of the market? I mean, do some of them delve into the small and micro cap ends of markets? Yeah, absolutely Absolutely, because that's where there's a lot of interesting things happening and a lot of innovations and volatility. Of course, yeah, exactly.

0:20:35 - Simon

I mean, take the good with the bad, so and look, that's a great example. So Wise Owl is, which is the new service we sort of swapped out for stocks down under. Their focus is very much on small cap, which means that returns are more volatile and obviously, over time, you hope they're, you know they're outsized, in other words, beating the market. And I think there's a you know there's, there's common acceptance in the industry that investing in small caps does have more upside, because the simple reason that the big fund managers out there, it just it's not on their radar because the companies are so small A fund manager, even if they like the story, they couldn't really accumulate a decent enough position to make it worth their while they're just too big, they just got too much.

That's right.

And these are small, too many funds to deploy Too many funds too large, so that leaves unpicked opportunities, I guess, if you want to call that, in vertical commerce or, you know, the diamonds in the rough, whatever sort of analogies but so in a way that's potentially an edge for the smaller investor, the DIY investor. And so just because YZEL at the moment sits, you know, hasn't been awarded a medal, doesn't mean there may not be opportunities there. So again, the devil's in the detail with how you look at the data, and we know we're not here to stick the knife in or promote any particular we want. We want, to a degree, the numbers to do the talking, but also understand what's behind the numbers. So that's exactly right. And look, to a degree they all cover less so the data driven ones, like a stockopedia or a simply Wall Street, but the more traditional ones to a degree. They all cover small caps.

But there are newsletters out there, like Wise Owl, that tend to be more focused on the small caps. So if you look at what they've got in their portfolio at the moment or what we've got in our portfolio, the tracks there's big predominance of rare earths, mining, biotech, small tech, all things that are really racy and in some degrees, lottery tickets. Right, you might make a 10 bag or 100 bagger, the other nine or 10 might, you might lose 50%. So then it's not for everybody right. Just depends on what, as I said, what your objectives are and what you can stomach in terms of volatility, things like that.

0:22:41 - Phil

You're looking at a very, very small subset of available newsletters and available stock tipping kind of services, and there's many other different ways of and there's trading ones as well, and listeners are being bombarded on social media with a lot of different ways of approaching the market. What would you suggest is a good way to help to filter out the ones that are not for you?

0:23:07 - Simon

I suppose, yeah, like I said before, it's really figuring out what your objectives are and what type of investor you are. Well, it is.

0:23:12 - Phil

I mean, that's it, but it's also to do. I mean, there's some that are promising incredible gains, aren't?

0:23:18 - Simon

they Run away as fast as you can mate. Seriously, let me ask you this, put it another way why, if you had the goose that was laying the golden egg, why would you be selling the goose right? If you had this amazing trading system that was just printing money all day long, why would you need to earn more money by selling it? It just doesn't make any sense. So it's really about questioning the logic of those systems. And it's interesting you mentioned that because our quarterly newsletter from our head office there was a piece on exactly what you just said these AI driven, because obviously we're in an AI bubble at the moment artificial intelligence and promising these incredible returns and a black box type trading system.

But if it's too good to be true, it usually is, and every now and then I'll get the old client is seeing a newspaper ad for amazing returns or these kind of things, and I've not once have I ever said yes, you should invest in it. So, yeah, there's no free lunch. There is no free lunch. You've got to do the work, you've got to put in the hard yards, you've got to ride the ups and downs, and the starting point is what are your objectives and what's the best system for you to use and go and do your homework. Never take it for granted.

0:24:29 - Phil

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and I think one of the key phrases you just mentioned is trading systems and if you see the word trading or forex what are?

some of the other red flags. Crypto is a big one. Oh, of course crypto. It's the crowd favorite.

0:25:40 - Simon

Yeah, and look, yeah, it's a different kind of you know, we. It's funny you mentioned that because in the long term, we may launch a similar review of those kind of things what I call technical trading systems, where the only indicator that the service uses is price or the trend in price. A common system is called trend following or momentum it's sort of another word for trend but that's very different to what we're talking about now, where everything in our universe and the majority of the newsletters that we track, or sorry, all of them, you know that, what you would call fundamental analysis. Right, they're looking at the qualities of an individual investment, and some may look at price as well as a method of refining when to buy or sell, and that's called technical analysis.

But for the most part, this is good old fashioned Warren Buffett style what do you want to buy? Why do you like it, when do you think the opportunity is someone and so forth. Nothing to do with the price, or the price comes after that analysis. So, yeah, and you know, if those trading systems work as well, price based, fantastic, but it's hard to track those, right, it's, yeah, it's because it is very opaque. So there may be some out there that do work. But, as I said, why would people be selling that? Why would they need to make money selling it? If they're, you know, supposed to be this amazing system that's already making money, why would you give that away?

0:26:54 - Phil

So that's yeah. I just I'd be very cautious. So this started partly because of your clients looking for ways to assess these particular investment newsletters. Have you had any feedback from any of your clients about using Ting?

0:27:05 - Simon

Yeah, I think just how handy it is and how the fact that it's independent, unbiased. It's not all things to all people, but it's certainly been a positive dialogue so far. Positive feedback always demand for more information and more detail. But again, we're trying to balance out the resources and you can't cover all bases.

0:27:23 - Phil

But you're very small operation.

0:27:24 - Simon

I'll just add here you know we're not talking you haven't got the office in Barangaroo and the hundreds of support staff with the Harbour views and the barista coffee as you walk in and the Google workspace, whatever it is. Yeah, that'd be nice, Wouldn't that one day? But yeah, we're trying to, as I said, exactly right, just balance out the resources. But the feedback's been. It's great that there's an independent source of analysis out there and just a selection tour to cut down on some of that legwork that you'd have to do otherwise.

0:27:53 - Phil

Some of these services offer a model portfolio. What's a model portfolio and how can it help you in terms of tracking what and when to buy?

0:28:01 - Simon

Great question. So a model portfolio is really like an off the shelf basket, if you will like a pre-packaged selection of shares so that you don't have to figure out which ones to own. So, in terms of the what question that you raised before, that's potentially a useful service for those people that just want to sort of walk in and pick up whatever 10 or 12 stocks. So some of the newsletters do that, some don't. Again, the plan is, with our spotlight reports, to cover off on if that is a product feature and you know ones that come to mind.

Actually, you know really good timing the question because the two services that we're about to add deep data analytics and Marcus today they both offer model portfolio so that you know pre-packaged is a basket that we like by them all or by selection or whatever, and so, again, it takes the guesswork out of for the homework, out of having to do that. So that's the what piece taken care of by certain newsletters. Again, it depends on your personality and what you know, how hands on and detailed and controlling you want to be versus how much you want to outsource.

0:29:02 - Phil

Because the other side of it is filtering. Most of them offer a filtering option.

0:29:05 - Simon

Yes.

0:29:06 - Phil

And that's you want to be able to filter in certain terms, and if you're not an investment expert, you don't even know which filter to start with. But I think it's really important. But one of the main filters is is the company making money?

0:29:18 - Simon

Yeah, good place to start.

0:29:19 - Phil

That's a really good place to start, isn't it? It is a good place to start, because there's so many companies on the ASX that actually don't even make any money. Exactly right.

0:29:26 - Simon

Yeah, and I think you know the small cap space is again more. You know you have to be prepared to look at that blue sky, so to speak. Right, so you're betting on the future of something turning around or having that growth, and so, again, certain services will have a lot more flexibility in terms of I call it screening, filtering, whatever you want to call it and you can tell the machine or the search engine hey, I want, I only want to look at, you know, please return in my search or companies that have got a positive earnings per share. In other words, they're making money and he's just like that'll cut out after market, right? So, again, it depends on how you want to approach it. But, yeah, there's plenty of ways to slice it.

0:30:06 - Phil

I think it's also worthwhile thinking about in terms of if you buy an ASX 200 or an ASX 300 ETF, how much is weighted to the banks and to the miners and so forth, and part of the investment journey is learning about which companies are better than others in the same space.

So when you're putting together your own portfolio, you might want to own a bank, but why do you need all the banks or why do you need all the miners? And it might be a good way to start thinking about it and how to filter out and construct your own portfolio, but to get a little bit more diversification as well.

0:30:40 - Simon

Yeah, that's right. So you could look at that two ways. You could start with the market or the ETF and then replicate it in your own way, as you say. So you're not going to own the big four. You're going to use whichever newsletter service to work out which of the banks do they prefer or which do I prefer, using their tools to screen those different characteristics that are important to me as an individual investor, whether that's a high return on equity or a low price to book, and you know whatever those measurement yardsticks are. So again, you know that's a good point.

Or the other way you could do it is you could say look, I'm going to take my $100,000 and I'm going to put half in the ETF.

In other words, whatever the ASX 200, bank Out Australian shares, for example, or STW same thing tracks the 200 and say I'm going to put half in the market and the other half I'm going to use whichever newsletter to try to beat that half that's in the market. So in a way you've got your own mini coach or accountability coach there because you've got money in the market and in a way it's a hedge as well. If you blow yourself up probably not the right expression. Let's hope nobody does. But if you have losses on the, you know the active part of your money. The other half is going to be hedged or ensured the fact that whatever the market returns so it was nearly 15%. You just ended for Aussie shares I'm going to earn that 15% In a way. That's what they call sort of a core and satellite approach, where you've got your core exposure and then you build the satellites around that with discretion so, and an automatic benchmark building.

Exactly right, this is like an accountability buddy right there, because you can see the returns from the market. There's no lying to yourself in that case, and I mean that the nicest possible way. But we're only human and we've got these subconscious biases when we invest, like we do with anything in life. So the more you can short circuit that stuff, the better, and that might be one way to do it to have an ETF in your portfolio and, of course, these newsletters don't offer any advice on position size as well.

That's so true. That's exactly right and that's why, again, it comes down to doing as much work as you can whether with an advisor or some profiling tools, whatever it is on a your investor type or your personality, and then be some kind of risk management plan, which is, I think you know, crucial because, as we've said in various chats and today, it's not all the newsletters help that well with that part and they don't necessarily purport to say that that's their job. But you know that rule book is really important because you've got to be prepared for when things aren't going well or when they're going really really well, and then the greed takes over the logic. So, yeah, it's such a good point.

0:33:04 - Phil

Okay, so I'm in. So tell us the name of the website again and how people can get in touch with you.

0:33:08 - Simon

Sure, sure, sure, yep, you've got no social media, I believe.

0:33:12 - Phil

What are you doing, are you?

0:33:13 - Simon

volunteering. Phil, you want to do my?

0:33:14 - Phil

Facebook page for me. I'm in trouble with my own.

0:33:18 - Simon

I'm lucky to post a photo of the family holiday to Cairns once a quarter, let alone, who knows, one day. So yeah, website at this point tinglivecomau. So Ting, TNG. Ting stands for the investment newsletter group, Ting live one wordcomau. If you jump on the next week or two and subscribe, you'll get the benefit of the results for the two newsletters that we're going to be releasing shortly, because we've got some one year results for those coming up. So yeah, jump on the, you know. So it's free to subscribe. The reports go out quarterly. As I said, we're expanding. We're putting out spotlight reports for each service, adding two new newsletters, so we'll be up to nine and welcome any feedback. There's a comment section when you subscribe, so any suggestions, where all is no guarantees, but we'll do our best.

0:34:04 - Phil

Yeah, and presumably this is a great way to learn about investing, because you're asking the kind of questions that investors need to ask to get better investing.

0:34:12 - Simon

Exactly, yeah, and it gets them thinking about what is important and what are they looking for in a newsletter Really important.

0:34:18 - Phil

Okay, Simon. Thank you very much for joining me again. Thanks, See you.

0:34:22 - Chloe

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