Master Investor Show 2023 – David Paul – VectorVest UK

[Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] [Applause] thank you [Music] good afternoon everyone hope you're all well I'm David Paul uh sometimes I think I come along to these things to double the average age but I'm going to do my best to try and talk you through the vector bear system in a few minutes it's something that I can quite easily spend three days doing and those of you that don't know that I could don't think that I could talk about markets for three days don't know me that well okay so I have a terrible habit running on too long first of all I have to put this up because my compliance officer is lurking around somewhere but uh vectiveest is I think the only stock market analysis tool that's authorized by the regulator the FCA I'm qualified to give Financial advice I run my own asset management company for many years but I can't do so sir because I haven't sat down with you and done that long in the detail failed fact found that your financial advisor will have done so that said I can talk about shares that I owe myself but I have to make it very clear although those Shares are suitable for me they may not be suitable for you so if you're in the room I've covered myself what I'm going to try and talk about very quickly is a vectivist system of analyzing shares sometimes I call them shares sometimes I call them stocks Market timing it's a controversial subject but we firmly believe at VectorVest that there's a good time to be in the stock market and a bloody awful time to be in the stock market so I want to be strong when the General market is rising and I want to be very weak when the General market is falling and Run for Cover quickly without a great deal of thought I manage money professionally for nearly 20 years and I found that if I had drawdown the clients ran for the door okay and they told 10 of their friends that they've had drawdown as well so I manage my own personal portfolio very tight for that reason sometimes you get out you got to get back in again that's just the way I do it may not be the way you want to do it but it's the way I do it so the VectorVest system for analyzing stocks folks well the Cornerstone of VectorVest and I'm going to say it now because I've only got 20 minutes the vanilla strategy we want to find undervalued stocks stocks that are growing their earnings strongly reasonably safely that are rising in price and we want to buy those stops when the General market is rising in price that's the vanilla strategy does a conservative strategy we're not trying to promise getting rich quick but it's a strategy that works and the the previous panel I heard the tail end of the conversation we're talking about discipline if you've got the discipline to adhere to that strategy then you're going to do exceptionally well in the stock market and the key is the discipline you take three things to make money in markets one is an edge and the VectorVest Edge is a very strong Edge in markets two you've got to manage your money really well and three you've got to manage yourself really well but three M's of trying to turn a buck the number one and number two you can get quite quickly number three takes a lifetime of trying and those of you that have been at it for a while will know that it does take a lifetime of trying so uh we believe that every investor should know what's the stock really worth how safe is it and then some idea about the trend is the darn thing Rising are you slugging it out going sideways and they go sideways for a long time at times before they go or is the darn thing falling buy sell or hold what's the stock really worth my granddad told me many years ago that the only way to make money in anything was to find the value of something and then pay less for it and that's what VectorVest does on a daily basis we put a value to every stock on the market every single day the second measure of value is relative value no relative value is a measure of the share price upside in relation to what a corporate bond will pay over a period of three years into the future as you know money's always running two ways into stocks are into bonds if a stock has got a relative value an RV on VectorVest of greater than one it means that we think the thing will outperform a corporate bond over the next three years if it's got a relative value of less than one it means we think it's going to underperform a corporate bond over the next three years in my own particular investing I want to look for an RV of greater than 1. 25 so we're into the little presentation two minutes first thing I want to look for is a share that's trading below its VectorVest valuation that makes sense to me I want to find a share that's growing earnings strongly and on VectorVest that's manifested by a relative value of greater than 1. 25 and immediately I can scan for those in a second I can find undervalued shares that are growing earnings strongly in all the major markets of the world the third thing is safety now the VectorVest algorithm looks at the balance sheet the income statement the cash flow statement it looks at dividends dividend growth dividend safety looks at all those ghastly financial ratios I'm a mathematician I've still struggled with those ratios are they getting better or are they getting worse and they've assigned a number which looks at the safety and the predictability of the earning stream over the last five to six years now if you're a very conservative investor like this old fella with a red shirt here okay same hairstyle as myself he's probably reasonably conservative so he would want a high relative safety no surprises or not many surprises but this young fella at the front he wants a Ferrari relatively quickly and there's a good chance there's going to be much much more aggressive so he's not particularly worried about relative safety he's prepared to handle those surprises so my son is slightly older than you he's a fund manager in Johannesburg and he looks at a relative safety as long as it's above one and VectorVest he's happy this gentleman here is probably looking for a relative safety above 1.

3 because that's going to minimize surprises and he wants to go on fishing trips hunting trips play a lot of golf okay so relative safety a melt of timing foxes the trend that's the easy bit everybody does that you can get that from Mahala Mahala Zulu for free and we put them together into the master indicator VST value safety and trend and that automatically finds the top stocks and all the markets that we operate in now it may not be the top stocks for you because you may want to in fact Resort by relative safety to bring the safest ones to the top of the pile this young man because he wants the Ferrari it's a lovely yellow one in the window of our HR own in South Kensington by the way you probably want to sort by momentum not particularly as long as the damn thing is moving so that's the default sort we put a stop loss to every share in the market every single day that's a Line in the Sand where you need to have a damn good reason as to why you're holding it could be a really good reason could be sitting above a major support level that could be a high relative Safety stock where you're not particularly interested in the stop losses you're happy with the performance of the company it's safe just hang on to it glencore is a good example went down a few weeks ago hit the vector bear stop loss trailers would have Run for Cover but people who are in who believe in the commodity cycle like the young man said a while back would probably be holding on to it and looks to me like a great buy at the moment glencore at these particular levels so the stop loss is there and the the discipline of course is taking it we talked about wars just now the last time old Vlad was on the March poly metal a Russian Gold Miner fell from 10 pounds to 90 Pence but it was selling off for months on end so those of you that are stressing about China going to Taiwan I can pretty much guarantee that half China will be short of the market before they send the first plane in the air and you'll see it in the price action how's that half them will be short Market will start to tick down what do you think start the tick down you just watch your stop losses that'll take care of that war in uh across there let's hope that it doesn't happen but I have a lot of Chinese friends and when you say to them well China take over Taiwan they say yes straight away without even a thought so uh we put a buy sell or hold to every share in the market every single day and getting in as a sale turns to hold and moves into a buy is a great place to get into a stock our top stock at the moment on VectorVest a relatively small stock has moved from 170 to 270 in a couple of months uh it went from hold to by sorry hold so it went from cell to hold to buy and we'll show you it's called kit wave never heard of it before you've never heard of all the winners before I have a little flattened nodding hell I paid for most of the flats in a company called Games Workshop I was on a panel Jonathan about 10 years ago and the little man who wears a red wrist coat he said to me what's your top stock for next year and I said Games Workshop and he laughed at me and he said why would you buy a company that makes Toy Soldiers the big ones you've never heard of invariably okay we had vectorvested Games Workshop on our database 10 years ago uh so that's the stock viewer that's kit wave in fact that was done folks I had to do this on the fourth to get it to the guys to put it up here or whatever so get wave as you can see trading at 276 your humble correspondent bonded at 170. I'd never heard of the damn thing before never it's traditional name it's we believe it's worth 302. the RV is 1.

42 that means that we believe it's going to outperform a corporate Bomb by 42 that's quite compelling the RS is 1. 13 on the scale between zero and two that's fair to good so somewhere between the young fellow looking for the Ferrari and the old fella playing golf somewhere in the middle artille is flying up at 1. 7 and the VST was the highest in the pack at 1.

45 it's on the buy recommendation there's the stop that's CI is a measure of the long-term trend so RT is the short-term Trend CI is a long-term turn we believe it's going to go earnings at 25 next year so we've got an undervalued stock the stock is growing earning strongly reasonably safely that's rising in price there's money to be made I believe it's just about to go again by the way and I think I'll probably add to it on Monday forward and print I've had for a very long time uh I bought it at 34. it's trading at 48 now it's there about it went off a little bit a day or two ago it's run above the VectorVest valuation but over the next three years 1. 69 of an RV means there's enough a lot of petrol still in the tank or lithium still in the battery or whatever uh uh tongala do you know tongala a cool man in South Africa it used to be called Amco tongella is the river that runs over the mine uh incredible fundamentals but it sold off lots of problems there they can't get the call out to Richards Bay because the South African Railways are stuffed it's a technical expression okay just don't work anymore so an energen just about to go looks great to me uh RV of 1.

63 and we have I think Steve at the back here one of our members from Oxford who suggested uh Energon uh to me we have uh literally thousands of customers around the country that have got very very good at this over the last 10 years and have I played a little part in that I'm really happy as you can see look at these earnings growth here this is the engine that's driving the share price up the page and we'll find these for you automatically you can kick the tires of the full VectorVest for a Fiverr for 60 days and then it's 49 pound a month it's on the month by month basis and my promise to you if I can't make you money you can stop at any time I don't think I can be fairer than that after the 60 days if you want to stop it we shall remain friends simple as that so uh let's get wave still going you see on this noise sitting in this little triangle the technicians will love triangles I've made a lot of money out of little triangles the Market's going back and forward inside that triangle it's like two blocks arguing over the price of a used car I want 20 for it you're not going to give me 20 are you you bid me somewhere in between we'll come to some form that's that's a triangle okay that's what happens in the Triangle uh so markets running and you can see those of you that are technicians you can see this absolutely gorgeous cup and handle pattern we technicians Jonathan have got lots and lots of wonderful names he's a fundamentalist God bless him uh so uh what VectorVest makes people like him redundant so you can see the buy recommendation coming in at 170 uh and it moved up uh and I think that that looks like a buy you can look at the chart downstairs that's Forum print that was my entry to Forum print uh from that uh I could have got into it earlier but didn't just got in from there from that it's called a bull flag any of the technicians here run goes sideways goes again it's called The Bull flag VectorVest we want to try and put together the Best of Both Worlds the best of fundamental analysis and the best of technical analysis and I saw my dear friend Zach near wandering around earlier and Zach actually said that to me once upon a time uh he said that VectorVest is the best of both worlds the best of fundamentals the best of technicals and the search to pragmatically make a few Bob okay well at a great deal of effort and if you follow the rules and have the discipline to follow the rules and that's difficult I'm not saying it's easy uh you'll be the same that's tongala I still haven't got it it's not a whole recommendation I still haven't bought in but it's starting to look good those of you that are Income investors there's a huge dividend coming I mean a Whopper of a dividend coming the last date to register for the dividend 21st Steve of that order was it the 19th 20th 20th okay let's see nog uh the green line is our evaluation that's earnings per share and as you can see it came off uh that old-fashioned trend line so we markets move in Cycles folks they and that's my metaphor they take forever to get up there and they fall very quickly so when I say markets I'm talking about the overall market and VectorVest rates the overall market and when I did this last week the longest term measure of the trend on VectorVest was down and for the last two days that's turned up so I'm reasonably optimistic I added one position on Thursday morning uh I was here yesterday so I didn't really do anything but I'm going to add a couple more positions on uh Monday morning and I'll report on that at the VectorVest q a on Monday afternoon that I do every Monday afternoon I run up my own portfolio uh and uh they can everybody can see the good trades and the bad trades the warts and all uh the MCA blog gives me hell about it but what can you do he phoned me the other week and he said should I buy that so I wasn't quite sure whether it was actually testing me out or not to whether he wanted to buy it himself as I say when I did this the uh longest term measure of the trend that most people will use was known and that's our Market timing calls and as you can see those are the cycles that are playing out in the market and at that stage when I did this the call was down essentially came back a little bit now it's moved starting to move back up again so we want to be in sync for those Cycles especially the young fella wanting the Ferrari quickly okay you want to be very strong in the market when that's moving up now these signals normally last for many months at sometimes many years but those of you've been in the market in 2022 will note that we are in the throes of a bear market and the rallies didn't last very long am I correct difficult difficult so we had a nice rally in November a nice rally up in January last June July and August we had a really nice rally in market so there was money to be made and to try and find the best shares we can scream through a thing called unisearch where you can put in a parameter for example this young man can put in concert searches for conservative stocks this young man can put in searches for very aggressive stocks to take advantage of momentum if you've got the strength and the testicular fortitude to make it happen Okay it takes a lot of strength to be aggressive in markets okay uh so uh I know I'm I'm bringing your timers up okay all right thank you Jonathan I appreciate it uh this is a search that I like because I think you'll find useful young man it's called explosive EPS stocks looking for shares where earnings are exploding and the share price invariably goes with it we take Market timing signals and that's what it's done since the start of the year the overall market and that cycle was up 3.