Summary of Stephen Clapham's The Smart Money Method

By IRB Media

Get the Summary of Stephen Clapham's The Smart Money Method in 20 minutes. Please note: This is a summary & not the original book. Original book introduction: Stephen Clapham is a retired hedge fund partner who now trains stock analysts at some of the world’s largest and most successful institutional investors. He explains step-by-step his research process for picking stocks and testing their market-beating potential.

His methodology provides the tools and techniques to research new stock ideas, as well as maintain and eventually sell an investment.

• Language: English
• Publisher: IRB Media
• Release date: Nov 29, 2021
• ISBN: 9781638159216

IRB Media

With IRB books, you can get the key takeaways and analysis of a book in 15 minutes. We read every chapter, identify the key takeaways and analyze them for your convenience.

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Insights on Stephen Clapham's The Smart Money Method

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 4

Insights from Chapter 5

Insights from Chapter 6

Insights from Chapter 7

Insights from Chapter 8

Insights from Chapter 9

Insights from Chapter 10

Insights from Chapter 11

Insights from Chapter 12

Insights from Chapter 13

Insights from Chapter 14

Insights from Chapter 1

#1

To outperform the market, one or more of the following three things must happen: The stock has to be rerated, the company must generate high returns on capital and strong cash flows, or the company’s earnings must increase.

#2

The author is looking for stocks that are likely to beat earnings estimates by a significant margin. He is also searching for companies that are in industries that are undergoing a revival, or have other advantages.

Insights from Chapter 2

#1

The first constraint for the majority of investors is time. You simply cannot research and analyze every stock out there. Thus, you must rely on your ability to think outside the box and your ability to recognize patterns to come up with viable investment ideas.

#2

By taking a good stock idea and applying it to a different stock, industry, or geography, you can generate large returns. For example, the book Industry X is a good idea that could generate large returns by applying it to the food industry, the retail industry, or even the taxi industry.

#3

Screens help you sort through investment opportunities in order of attractiveness. A stock might stand out as being cheap on a number of different relative measures, indicating that it is an attractive investment.

#4

Ideas can come to you while you are out and about. While shopping, search for a new product and its company. Look at its financials, and if its price is right, buy the stock.

#5

Investing is simple, but it does require constant attention and observation. That is the only way to truly know what is going on with a company.

#6

Having lunch or coffee with other investors is a good way to share ideas and discuss problems. You might not come away convinced about copying a friend's investment strategy, but you might pick up some good ideas.

#7

Having a network of contacts and sources of information available to you can help you uncover undervalued assets and companies.

#8

It is not always easy to tell if a company has a strong management team just by looking at the company's financials. You should look at the company's previous owners and managers to see if their track record is good.

#9

One way to invest in the stock market is to simply buy the stocks of the companies you know and trust, which eliminates the risk of losing money on a bad investment.

#10

Some argue that public companies should not be privatised, as they should remain