Claude is trained in law and interested in renewable energy and environmental law He found he could achieve more through investing. He started Ethical Equities in 2013 where he writes about companies that he likes and some of his mistakes and successes.
Claude isn't a fanatic when it comes to ethical investing and he's not trying to ram his ideas down anyone's throat - he's making his information available for those who may be interested. He also has some fantastic tips for those coming to the sharemarket for the first time.
In this episode we discuss Claude's longest held investment Kip McGrath (ASX:KME) - a simple and some would say boring business. It's a founder-run education franchise model that generally provides a low cost way for parents to get their kids up to scratch.
The Hype Trap – investors believing a story rather than a solid valuation, and not asking the simple question - how does a company make it's money. Be really cautious about the hype or story and always, always calculate the free cash flow that the company is generating.
Novita Health Care (ASX:NHL) – Claude bought because it appealed to his bargain-hunting instincts. He became suspicious when he noticed the hype machine in action pumping up the price on very little new cash flow.
What is a Capital Raising?
How does increasing the number of shares on issue dilute and decrease the value of the shares you own?
PVM - The Pizza Valuation Metric.
Claude warns of the type of investors who only listen to tips without investing time in learning how to value a company via the primary documents.
The importance in Appendix 3B – the real count of the actual number of shares on issue.
Match your risk to your experience
Don't be over-confident – invest only a small amount to begin with and increase your investing as your knowledge increases.
The origin story of ethical investing - The Quakers in England deciding that they didn’t want to profit from slavery.
And our listener question from David answered:
Why would an ethical investor buy into an ethical company? Your money doesn’t go to the company but to another investor selling out. Surely you should buy into a company you can change by questioning and voting at an AGM.
Shares for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Shares for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.
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