Benj Gallander Investment Philosophy

  • Contrarian Investing
  • 13 Mar 2019
  •   Comments Off on Benj Gallander Investment Philosophy

Benj Gallander has among the highest returns, both short- and long-term, in North America. Co-editor of Contra the Heard Investment Letter, columnist for The Globe and Mail, writer for Bloomberg and Canadian MoneySaver, Gallander’s approach has the investment world buzzing.

His approach to investing is decidedly Contrarian.

He does not believe in buying and holding until perpetuity. He thinks that stop losses are idiotic, like playing cards with your hand open. He redefines conventional norms of the risk-reward relationship. He rarely buys a stock that does not have a chance of a minimum 100 per cent return. He remains unconcerned with the daily pulse of trading. This ability to dance against the herd has led to a ten-year annualized return of 25.4 per cent with a staggering 64.8 per cent in the meltdown of 2001.

These rules are from Benj’s book, The Uncommon Investor: a contrarian guide to investing in the stock market. The book is available throughout Canada and the United States and also online from numerous sources.

A Contrarian Chooses When to Go Against the Crowd
Always Set a Sell Target
Always Think in Percentage Terms
Analyze Your Mistakes
Ask Yourself: When Is Enough, Enough?
Avoid Crowd Psychology
Avoid Debt-Laden Companies

Be Lazy and Let Others Do Research for You
Beat the Market. Not Yourself
Before Buying, Check the Order Quantities
Before Buying, Test Your Idea on People You Respect
Buy on Weakness. Sell on Strength
Buy the Management. Check Her/His Track Record
Buy When a Stock Has Few Friends
Buying Dividend-Paying Stocks Is a Definitive Advantage

Carefully Consider Buying in December
Carefully Match Your Personal and Investment Needs
Check How Much of the Corporation Management Owns
Check Demographic Trends
Check for Insider Trading

Defer Taxes Where Possible
Divide Your Funds into Weighted Investment Packages
Do Not Fear Numbers
Do Not Invest a Specified Amount in Stocks Every Month
Do Tax Planning
Do Well, While Doing Good
Don’t Always Focus on Money, Make Dinner With Your Honey
Don’t Believe that Something Cheap Is Necessarily Undervalued
Don’t Be a Trader. Invest for the Long Term
Don’t Invest More than You Can Afford to Lose

Every Six Weeks, Review Every Stock
Examine the Ten-Year Price Range

High R&D Expenditures Are a Positive Long-Term Indicator
Higher Risk, Higher Potential Reward
History Is an Excellent Teacher

If a Stock Sinks, Consider Averaging Down
If You Miss One Train, Another Will Come Along
Imagine the Worst Case Scenario
Invest Early and Often
Invest So You Can Sleep Comfortably

Know Thyself

Learn to Understand Financial Statements

Never Average Up
Never Buy a Stock You Think Will Undergo a Share Consolidation
Never Buy Firms With a Share Price over $25
Never Buy on Margin
Never Buy on Rumour. Do Research
Never Give a Broker Discretionary Power
Never Short a Stock
Never Use Stop Losses

Over Time, Mutual Funds Perform Worse than the Overall Markets
Over the Long Term, Luck Balances Out
Only Consider Stocks Trading Within 30 Percent of Their 52-Week Low
Only Consider Stocks Trading At Less than 50 Percent of Their 52-Week High
Only Buy Corporations Which Have Been Listed for a Minimum of Ten Years
Only Buy Stocks Listed on Major Exchanges

Pay Off Your Debts

Reanalyze but Don’t Ulcerate over Your Sales
Reevaluate the Stock Carefully When Considering a Sale
Reevaluate Your System Periodically, Allowing It to Evolve
Review Stocks You Own Every Three Months, Concentrating on Their Debt

Search for a Broker With Experience
Sell a Minimum of 50 Percent of the Stock Near the Target
Set Realistic Financial Goals
Split Assets between Different Institutions for Safety
Stockbrokers’ Results Typically Lag the Market Averages
Study Management

Take Carefully Calculated Risks
Take Periodic Breaks from the Market
Talk to Management
The Greater the Diversification, the Lower the Rate of Return
The Lower the Stock Price, the Greater Both the Risks and Rewards
The Target Price Must Be a Minimum of 50 Percent Higher than the Buy Price
Try to Store Money for Emergencies

Wait to Tender on a Takeover
Watch Trading Volumes
What Will I Give Back?
Without Discipline, You Have No Method
Write the Corporation for Information
Write a Stock Watch List

. . . Sit . . . Relax . . . Wait . . .

The Contrarian Investor’s 13

The Contrarian Investor’s 13 focuses on the basics of his controversial methodology and philosophy, and the rules around which Benj has structured his investment approach. His goal is simple: to show people how to improve their financial returns by themselves, reducing their dependence on brokers and advisors.