Investor centre is an Irish-based stock market training company established in 2005 by Rory Gillen, a Chartered Accountant who has worked in the stockbroking dealing side, the fund management side and as an equity analyst. Rory was also joint founder of Merrion Capital, a stock broking company based in Ireland whom he left in April 2009 to focus on improving the training offering he has been delivering since 2005 and to extend the offering into advice. He is the founder of the Investrcentre (formerly ILTB.ie) which runs training courses and which Rory has optimistically branded 'Invest Like The Best'.
Rory Gillen claims the service is broadly targeted at 4 groups of investors; novice investors, those who have a lump sum to invest, stock market investors who are looking to improve themselves and those who work in the financial service industry and want to grasp a better understanding of risk in stock market investing. Investrcentre offers a one-day training course once a month and Rory emphasises mid to long-term investment and compounding as the keys to successful investing.
Rory argues that buying and selling shares in the short-term is a zero-sum game and is more akin to gambling than investing. He points out that, over time the stock market moves up and shares increase in value so new money is created this way. In the short term the market, Rory states, is an irrational beast and stock prices react wildly to positive or negative news flows which can drive share prices away from the fair value of the company and this is both the cause and effect of unpredictability.
Rory also states that regular investing over time is one of the best ways to create wealth. In fact, the InvestR Centre teaches investing as opposed to speculating or day trading and Gillen advises those expecting special savings incentive account payouts to consider reinvesting that money in order to take advantage of the power of compounding over time.
In effect what Rory does it to identify blue chip Irish US and UK companies that are selling below their fair value. The calculation of intrinsic value is done simply by analysing various aspects of their past financial performance without seemingly using the more traditional valuation methods - earnings yield, Price/Earnings ratio, dividend yield, price-to-net asset value...etc - 'You simply need to ensure that you are buying the cheapest 10 - 15 stocks as defined by the value criteria', he says. Gillen claims that the principles he uses to value companies are based on tried-and-tested systems developed by well-known investors like David Dreman and Kenneth Lee. Rory's approach is to take advantage of the market's natural tendency to over-react to negative information. He states that the method he uses of valuing a company is easy to understand and you do not have to do all the work yourself. Rory points out that it would be very time consuming to value the top 100 companies on the US and UK markets. You could of course learn to do this with a calculator. Or, you can get the information from various websites, including www.investlikethebest.com (€299 per annum...)
So although Rory uses other means of valuing shares on both the US and UK markets he still claims that the results are still comparable. 'Share prices follow earnings, all other things being equal.' So the systems target solid companies whose earnings have grown in the past, are likely to show similar growth in the future, but whose current share price seriously undervalues the company. The system is based on analysis of published figures. No attempt is made to judge the company based on the quality of management, product mix, competitiveness or other qualitative factors. 'Stop listening to the media, analysts, or should I say opinions, which are generally forecasts. Look for the facts.', he says.
ILTB's investment strategy does not claim show you the road to Major Moolah, but it does offer some sound financial advice. For instance Rory endorses diversifying across a minimum of 10 blue chip companies with a one year perspective and to change your make-up after one year if your combination hasn't made the desired returns. Rory also advises to ignore what the herd is doing 'if the market is expensive, stay out' - 'if prices fall that's the time to buy', he says. Rory also mentions that financial analysts and experts can and sometimes do get things wrong which I've found to be generally sound advice... And Rory was right to be pessimistic about house prices in Ireland in the beginning of 2007. Gillen also recommends users to open a brokerage account with an 'online trading' facility, quite unlike that offered by some big name Irish traditional brokers like Davys, Goodbodys, Merrion Capital...etcDuring his training seminar Rory claims people will learn:
The company also promises to help members to set up their own investment clubs and will organise for one of a co-ordinator to attend and support decisions taken at the first six monthly club meetings.
Like other training course providers InvestLikeTheBest offers a Free Workshop. According to Gillen, ILTB's approach consists of three 'simple steps to stock market success' - the first of which is smoothing out volatility; (two) following tried and tested approaches; and lastly understanding the power of compounding. Rory recommends investors looking to sign up for a course to have a minimum of €1,000 to start investing and remember this course is targeted at investors not traders.
InvestLikeTheBest claims that they are the only stock market seminar on offer in Ireland that has gained industry validation by way of approval from the Institute of Chartered Accountants, Eagle Star & FBD Insurances. Keep in mind, however, that at the end of the day these courses are not regulated and whilst the free course offer is compelling there is no such thing as a free lunch and free investment courses are geared towards encouraging attendees to sign up to a costly course. InvestLikeTheBest is not particularly cheap but then it is not prohibitive either at €695, after all the organiser has to make a profit margin and has to account for all sorts of rent and staff expenses. The average investor finds it difficult to follow a trading system or to implement trading strategies in books either due to a lack of experience or a lack of confidence so if Rory's course provides such guidance to people who can't work from books and helps to shorten the learning curve then it's not a rip off, and is to be welcomed. So I would encourage you to attend the free course with an open mind and listen for an hour but remember to read a few books about investing before rushing into any paid course. The InvestLikeTheBest.com site in itself is quite short on detail and seems very much targeted at new investors with next to no knowledge of market matters.
Dollar Cost Averaging is generally about paying small amounts to an account each month (normally)- say $100. It has been considered a viable and conservative way to enter the market place since it averages out the shares prices over a period of time.
InvestLikeTheBest present Dollar Cost Averaging as a solution to market volatility yet there are academic studies which show that to outperform the market using this technique would require a healthy dose of luck if it is even possible. Dollar cost averaging does work in a global bear market but this doesn't alter the fact that the active investor who considers himself as a competent market-timer this strategy is not suitable. Astute investors get in with a lump sum at a time they predict the market is likely to go up in the near future. And they exit the market when they judge that the market is very likely to go down in the foreseeable future. Of course, near term peaks in markets are only obvious in hindsight but this doesn't remove the fact that research confirms that DCA will provide poorer returns. Recognise that I am only addressing funds.
Think about it from a logical perspective, the stock market offers the greatest returns of any asset class because it entails the greatest risk. By reducing your risk exposure through Dollar Cost Averaging, you also reduce your potential return. The simple fact of the matter is that brokers push Dollar Cost Averaging because it is an easier sell to people who are worried about stock market volatility. However, they do not like to admit that it also offers comparatively poorer returns.
Remember you cannot catch a falling knife but you should have prices that you would like to enter at otherwise what are you using to represent value?
The team at ILTB.ie at an EXPO
Title: The InvestR Centre Stock Market Training Seminar
Tutor: Rory Gillen co-founded stockbroker Merrion Capital
Where: venues throughout the country
When: once a month
Cost: the standard price is €850, but a 20 per cent discount is offered for bookings on the web. Two people can attend for €600 each. The course is also discounted at €695 at Free Workshops where the vast majority of seminar attendees come from.
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