Back Office Investor Rules
These are the Back Office Investor Rules. the priority order is per the fundamental data screen, search a company to view the fundamental screen
1 – Average Daily Volume:
Must have an average daily volume over the previous 240 days of greater than or equal to 500,000 trades.
2 – Pay a Dividend:
The company must have been paying dividends for at least the previous 5 years.
3 – Turnover:
Turnover must be increasing year-on-year for the previous 10 years.
4 – EPS – Earnings Per Share:
Earnings Per Share must be increasing year-on-year for the previous 10 years.
5 – PE – Price to Earnings:
Price to Earnings must be between 10 and 25 for the previous 10 years.
6 – ROE – Return on Equity:
Return on Equity must be greater than 10 % year-on-year for the previous 10 years.
7 – ROCE – Return on Capital Employed:
Return on Capital Employed must be greater than 10 % year-on-year for the previous 10 years.
8 – Pre Tax Profit:
Pre Tax Profit must be increasing year-on-year for the previous 10 years.
9 – BVPS – Book Value Per Share:
Book Value Per Share must be increasing year-on-year for the previous 10 years.
10 – Free Cash Flow:
Free Cash Flow must be increasing year-on-year for the previous 10 years.
11 – Debt To Capital Ratio:
Debt to Capital Ratio must be less than or equal to 50% for the previous 5 years.
12 – Dividend History:
Divided payments must be increasing year-on-year for the previous 5 years.
13 – Daily Percent Change:
Daily Percent Change must increase per time scale.
14 – Buy and Sell Signals:
Buy and Sell signals must be triggered by the BOI system.
15 – Limit 5% of Total Fund:
Limit the purchase of shares in any one company to 5% of the total fund.
Please watch the videos on the BOI Rules in the Training Section.
Back Office Investor Principles
Hundreds of books have been published on investing, there are hundreds of thousands of people who have joined investing groups on social media platforms, global media companies provide 24/7 coverage of the markets including their running commentary, hundreds of websites offer data, charts and news, millions of investors around the world are all listening and looking at the same data and information to decide what to do, below are some very important principles to follow.
These are not listed in any priority order as you need all of them to succeed as an investor.
1 – Learn the rules of investing:
Before you start risking your hard-earned cash, use a demo account for at least 6 months to test your investing system.
2 – Decide and stick to your buy and sell signals:
Use a combination of technical indicators, fundamental data and trending analysis to generate buy and sell triggers.
3 – Never spend more than 5% of your total fund value on one stock:
If you risk everything on one stock and then you are wrong, it’s over, taking smaller risks will ensure you don’t lose everything and can fight another day, this is very good risk management.
4 – Diversify your portfolio with a mix of sectors:
Sectors tend to rise and fall together, so make sure to choose a mix sectors to avoid them all going in the same direction.
5 – Know when you are getting out before you get in:
Be clear on what the exit strategies are before investing, this will avoid you holding falling stocks for too long.
6 – Cut your losses short and let your profits run:
Losses are unavoidable, accept them and keep them small, this the biggest mistake many investors make.
7 – Don’t add to a losing investment:
Losing investments should be sold if the sell trigger has been generated, if not then hold, but do not add to losing investments, adding to losing investments will compound the loss, don’t be afraid to take a loss, this is a natural part of investing as we can’t be right all the time.
8 – Ensure you can perform your own due diligence:
Don’t just buy or sell because of a friend’s recommendation, ensure you have the training to perform your own due diligence.
9 – Don’t invest on market sentiment:
Investing on sentiment is dangerous, as we know sentiment causes the markets to rise and fall, we can react to the rise and fall caused by the sentiment, but not the sentiment itself, if our buy and sell signals are generated then we act.
10 – Keep your emotions out of investing:
Investing on emotion will cause the buying and selling of stock without good reason, emotions have no part in investing, we only invest based on our rules.
11 – Be very disciplined in your investing approach:
Adhere to your investing rules ( don’t keep changing the rules due to changing market conditions ).
12 – Be patient at all times:
Be very patient at all times, there is no need to rush, there is no need to invest everyday, if nothing meets your investing rules then don’t invest, only enter the market when the signals and conditions meet the rules.
13 – Avoid listening and especially reacting to the noise:
News, commentary and opinions are everywhere 24/7, much of this is noise and should avoided, if an investing system is in place and works then we don’t need the noise.
Please don’t underestimate the importance of following these principles, following these principles are key to becoming a great investor.