S2E19 Sammie Ellard-King Earning consistent 20% returns in the market

S2E19 – Sammie Ellard-King – Earning consistent 20% returns in the market

Sammie Ellard-King

Sammie Ellard-King – Earning consistent 20% returns in the market. My next guest started investing in ETFs and, as he gained confidence, began investing in individual stocks. Over the last 8 years, his returns have outperformed the market, generating on average 20% per year. In this episode, he shares what he looks for in the financials, what he looks for in businesses, some of his top-performing stocks, and how many stocks he holds in his portfolio. Please welcome Sammie Ellard-King

Payback Time Podcast

Payback Time is a podcast for investors. The goal of this podcast is to help make investing approachable and easy to understand. We will interview beginner and experienced investors and ask them to share stories on how they got started, what challenges they faced, what mistakes they made, and what strategy works for them today. The overall objective is to provide you with a roadmap that helps you become a better investor.

key timecodes

  • (01:02) – Background history

  • (02:06) – His hospitality business model

  • (03:26) – Deeper into his hospitality business

  • (08:19) – The courses, shop, and marketing at his website

  • (10:16) – His Investing journey.

  • (11:53) – The capital he started investing with.

  • (13:08) – His investment strategy

  • (14:47) – The use of the 4M analysis at his strategy

  • (16:07) – How this strategy relates to the TYKR philosophy

  • (18:40) – Deeper into his recent approach with tech stocks

  • (23:18) – What stocks does he hold?

  • (26:05) – His focus on the business model to evaluate the stocks

  • (28:16) – Deeper into how TYKR works and is similar to his vision

  • (32:33) – Analyzing together and commenting about the stocks he owns

  • (34:46) – “When the market goes up we make money, but when the market goes down we get rich!”

  • (36:25) – His returns in 2020

  • (41:09) – Guest contacts

Transcription

[00:00:03.430] – Intro
Payback Time is a podcast about building businesses wealth and financial freedom. We try to uncover the challenges our guests faced, the mistakes they made, and the steps they took to achieve their goals. The overall objective is to provide you with a roadmap that leads to your own success. Sean Tepper is your host. Are you ready? It’s Payback Time.
[00:00:33.030] – Sean
My next guest started investing in ETFs and as he gained confidence, began investing in individual stocks. Over the last eight years, his returns.
[00:00:41.070] – Sean
Have outperformed the market, generating an average of 20% per year. In this episode, he shares what he looks for in the financials, what he.
[00:00:49.640] – Sean
Looks for in businesses, some of his.
[00:00:51.680] – Sean
Top performing stocks, and how many stocks he holds in his portfolio. Please welcome Sammie Ellard King.
[00:00:58.710] – Sean
Sammie, welcome to the show.
[00:01:00.490] – Sammie
Thanks for having me, Sean. Good to be here.
[00:01:02.600] – Sean
Yeah, good to have you here. So why don’t you kick us off and tell us a little bit about your background?
[00:01:06.790] – Sammie
Yes. So I’m originally a hospitality market here, so I’ve done about ten years now in the industry, probably eleven, give or take. You skip code and I have been an investor for about eight years as well. And then very recently, I have started my own business and that’s called up the Games, and it came out of need, really. For me. It was kind of an interesting opening to a business. I never really thought about ever doing anything like this, but hospitality is quite an unforgiving industry and you’re only as good as your yesterday’s take and you’re always worrying about the next day and you can have enough stock and are people going to turn up? And it doesn’t fulfill me with the same amount of joy that I did in my 20s. Let’s say you could party and drink for free if you own the venue. So it was kind of cool, but yeah. So now we’re obviously moving into up the Games, which is a financial freedom business.
[00:02:05.800] – Sean
Okay, so I just want to touch on your hospitality business just to give a little more context and then learn about your business. This up your gains. Is that correct?
[00:02:15.280] – Sammie
Up the Gains, yes, up the Gains, got it.
[00:02:17.540] – Sean
We’ll dive into that and then we’ll really get into your investment journey. I’ve got a bunch of questions here for you. So hospitality marketing business, is it like an agency or something?
[00:02:27.800] – Sammie
No, I basically work for pretty much most of the big restaurant chains and bar chains here in the UK. I’ve dotted about a bit. I’ve worked for about four or five over the course of ten years. I was the youngest head of marketing in the industry in the UK at 25. So I kind of came out of university. I set up my own business when I was in university. I didn’t spend my student loan like everybody else. I kind of set up an event night, basically booking musicians that I thought were cool because I come from quite a musical background. My whole family is in the music industry. My granddad owns jazz clubs, my dad runs venues, my mum runs venues. So I’m kind of grown up in this world, which is kind of why I fell into it, right. Because it just felt like home to me. Yeah. I’ve worked mainly for bars and restaurant groups, but now I’m a co owner of a company where we own street food markets. We have a couple of music venues and bars within London.
[00:03:25.610] – Sean
Got you. Okay, so you’ve got that business kind of sustaining revenue. It sounds like it requires some time, but you’ve got a partner and you got a team, so you can create some kind of leverage there. Yeah. That’s awesome. Okay, good to hear. And now actually on your site, How Upthagains co UK listeners will promote this at the end of the show as well. But tell us about this business a little bit.
[00:03:51.650] – Sammie
Yeah, so, as I said before, I started investing about eight years ago, I was deep in debt. I had about $30,000 worth of debt, plus student loans, so if you pack that in altogether, it was about $70,000 of debt. So quite a big chunk, especially in your mid twenty s. And then some of my friends are really good at they do well in business. For example, they’re good in the stock market, they’re entrepreneurs themselves. And they kind of basically took this kind of conversation on a beach in Vietnam. Basically, we’ve gone traveling together, and I’d actually taken a credit card out to get there, and then it all pulled out to him on the beach that I was, like, deep in debt, and I didn’t know what to do. And he sat me down and he said this one thing to me which will live with me for forever. He said to me, when do you want to retire? And I said, at least a minimum by 50. He said, Cool, and how long do you want to live for? And I said, It’d be nice to sort of hit 80. And he said, how much do you spend a year at the moment?
[00:04:51.490] – Sammie
And I said this amount. And he said, well, times that number by 30. Have you got that amount? And I said, no. And he went and suddenly and it just struck with me, it just stuck in my head and I couldn’t get it out. And this was that kickstarter I need. So I came back and I jumped into everything I could do with all walks of my life, and I was like, let’s go. How do I get out of debt? What’s the fastest way? I read everything I could get my hands on debt management, financial freedom books. There was some really great online Audible courses that I did as well. And I went for it. And in 24 months, I was investing, I was out of debt, I literally had the time. But all of that was sort of pursuing quite a successful hospitality career which was taking off for me. So my income was helping supplement the debt, which helped me get along the way a lot quicker than perhaps it would have if I was just stuck at the same job. And if I was quite ambitious, I really wanted to go for it.
[00:05:50.310] – Sammie
And that kind of led to investing. And obviously my friends and family started taking note that I was doing these things and I started helping them. So sisters, mum’s, friend down the road, that type of thing, who was interested in it was kind of like, oh, Sammie will help you, that type of thing. And it kind of was like that for years. Then the pandemic here in the world got shut down. Everyone was furloughed and had all this cash sitting there and they all wanted to put it into the markets and put it into work, right? So I set up this WhatsApp group with about twelve people and in about a month it’s gone to 246 people, which was the maximum you could get on a WhatsApp group and it was literally like I had to start waiting list. It was ridiculous and it kept me busy. It was great because I was followed. Like half of the hospitality industry was here in the UK. And then I just suddenly realized these questions I was getting through and I was sending them links to certain sites and I was reading these sites and I was looking at them and I was going that’s really difficult to understand, especially for someone who doesn’t understand the stock market.
[00:06:53.360] – Sammie
Just these retail investors like you and I were jumping into the markets. How are they going to break that down? Because that’s full of jargon and it’s really tough to get your head around. So I started writing and I started thinking, right cool, I’m going to put these kind of little thought pieces together. And I started dropping fork pieces into the group and they were getting really good traction and I was like, hang on, there’s a business here. So I went through every little financial website that I could find going all the finance blogs, which I thought were cool, and I took down what they did well, did a little pros and cons audit on them and then basically put together this monster content plan and birth the branding of the games and went for it. So we were starting out with beginners, but then we realized quickly that especially with these guys at one thing is a lot of these people in the group were jumping head to first and kind of having that chat of like what’s the hot stock now? What’s the hot stock now? And I was like, no, that’s not how you do it.
[00:07:51.470] – Sammie
But they didn’t want to think like that. We kind of was like actually we need to look at this from a personal finance spectrum. It started out as an investing kind of content plan, but then it’s really gone into the whole personal finance spectrum right through to budgeting saving. And then once you’ve done that and nailed that into investing, so we kind of take our people on the journey smart right through. So, yeah, that’s not the games.
[00:08:19.230] – Sean
Thank you for the context there and the business model. I’m looking on the site, I see it looks like you’ve got different articles. It’s a blog, you’ve got a shop. Are these different courses people can purchase? Is that correct?
[00:08:31.730] – Sammie
So what we’re going to do, we’re going to basically work organically, build up the audience base, which has been growing astronomical numbers. We’ve been hitting like 100% month to month growth since about three months ago. We’re up to sort of 10,000 readers a month, which is amazing. And the growth plans are we’re putting up new content every single day. I work closely with a couple of friends of mine that have experience within the stock market or the crypto world, and they’re helping with the content on this website. So we’re kind of me, him and another friend are all sort of tripoding the content for this. Once we get it up to a level that we’re happy with. We have started creating investors for beginners courses, crypto beginner courses, et cetera, which we will launch onto the site. But it kind of needs to be an organic process. I think we’re about six to eight months away from launching those. But yeah, it definitely courses, ebooks, planners, digital products that people can download and utilize to sort out the household budgets. We actually have a household budget out now. The plan is really kind of to be the go to space, especially within the UK, where you want to change your life and kind of completely rebirth your relationship with money.
[00:09:47.980] – Sammie
So that’s the idea.
[00:09:49.700] – Sean
Got it. That really gives me a great idea of the type of content myself or my audience can check out. Really? The A to Z personal finance. I love the emphasis on here’s how to get out of debt. I’m sure you’ve got some articles and content on that specific, but then as you kind of graduate to another level, how do you make your money work for you? How do you invest?
[00:10:12.550] – Sammie
Yeah, that’s fun.
[00:10:14.880] – Sean
The big thing. Let’s dive into your journey a little bit more. You said you started investing about eight years ago, so that was about 2013 or 14, is that right?
[00:10:24.220] – Sammie
Yes, correct. Yeah.
[00:10:25.380] – Sean
Okay.
[00:10:26.530] – Sammie
I had a lot of fun at the start. I mean, I read Peter Lynch and that was it. I was like, Right, let’s go. And it was all like blue chip and value investing that I could possibly get my hands into, really? So I absolutely loved it. But I kind of got into I’ve never been a big advocate of crypto. I just don’t like the risk. For me, it’s way too dangerous. And I’m about kind of building generational wealth. I’m not about, let’s make $500 tomorrow. So that’s the way I look at it. I actually was quite safe during my early years. A lot of ETFs, a lot of blue chips, and just kind of really got myself going and saw the growth. And now I’m a little bit more risky because back then, I didn’t even know what I was doing. I didn’t even know what the PE ratio was. I couldn’t even tell you these basic terminologies or how to assess a company’s fundamentals. I had no idea. So, yeah, it was kind of cool. It’s kind of fun. It’s kind of nerve racking as well. Am I going to lose my money tomorrow?
[00:11:31.850] – Sammie
Is the stock market going to crash? But I love business, I love economics, I love politics, reading about all these things and then how they were actually affecting these stocks. And I started to see patterns about evolving. And now I’m a fully French individual stock. I love it.
[00:11:49.510] – Sean
We’ll get into that and your strategy will dive into a little bit further here. But our audience loves to hear, what kind of dollar amount did you first start with when you got into the market?
[00:11:58.590] – Sammie
That’s a good question. So here in the UK at that time, we didn’t really have any digital apps based, commission based systems. I used Harvey’s Landscape, which back then, even now, actually, it was less. So now it’s more. It was 5.99 just to place a trade. So the first trade I did was 150 because I didn’t want to give away 6%. If I was putting 100, you’re immediately 6% down. Right? You’ve got to then make that back. So I didn’t want to do that. And so, yeah, it was $150 investment and I bought the Vanguard or sharing dick. So it was like it was a huge, big deal for me.
[00:12:43.700] – Sean
Sure, your first investment, I love that.
[00:12:46.730] – Sammie
Yeah, all right. It was all off the back of A Simple Bastardwell by J O Collins. That book here, I was like he was just banging on about, by the Vanguard Total. By the Vanguard Total, and you’ll be forever thankful. And I was like, okay, well, I have to do that. I’ve read the book. Let’s start with that.
[00:13:04.390] – Sean
So that’s why you got into the Vanguard investment there. Now let’s dive into your strategy today. You said you really love looking at the fundamentals, your value investor. You probably look at the business a little bit, so why don’t you break down your strategy for us?
[00:13:20.550] – Sammie
Yeah, so I look at growth year on year. Growth like that, for me is massive. So I’m huge on my cloud and fintech. I just really enjoy it. So I’m all about innovation. A company doesn’t necessarily have to be profitable for me, it has to be posting growth and show a clear pathway to profitability. But I’m a big fan of the motor. Everybody always goes on about it. But I think a business which I love right now is taking absolute beating, is up work, and I think it’s really interesting play AI lending. I think it’s smart. If it manages to do what it does, it’s going to be the only one within that space succeeding. So just that pathway for it is huge. The growth could be exponential. So I look at these things, I’m not the one that sort of goes down. And what’s the deck to equity ratio versus its peers? I don’t do that because I get people that do it and I do read these types of articles. But for me, when I pick a stock, I like to look at the growth, I like to look at their profit margins, and I like to look at the moat.
[00:14:31.790] – Sammie
And if those three things are really kind of nailing it for me, then that’s a winner.
[00:14:37.490] – Sean
I love your strategy and thank you. You hit on something that I love talking about is you get a lot of analysts out there and they play all day with the numbers, but they don’t talk about the business or the Mote or the management at all. It’s like, okay, we’re going to focus on Pde ratio, debt equity you mentioned, and they’re going to talk about the market cap and then make our decision. How does that make any sense whatsoever?
[00:15:02.710] – Sammie
There’s so many different metrics out there and everyone has their own. Like, if you compare that with that again five years ago against that pier and it’s down at the moment, you’re like, Dude, come on. Is the company growing? Microsoft just posted like 32% growth year on year. That’s ridiculous. That’s the company that’s growing. It’s got a moat. It will continue to grow. So that should be a part of your portfolio, but you can kind of utilize that across many different you had a guy on the other day that only does penny stocks, I found out. Super interesting, but he was looking at these different metrics and was that Jaden? Jaden’s, yeah, that was super interesting. I was like, that’s some serious risk playing. But he’s got his system and it works for him. So I think it’s like every investor is completely different and everyone will tell you they’ve got their own system that works and great, like, we’re all in the market. So at the end of the day, if you’re buying, I’m buying stocks rising, right? So that’s the way I look at it.
[00:16:07.750] – Sean
With your strategy, it’s very similar to Tykr. We look at the forums, which we got to give Phil Town credit for that he talks about the margin of safety is kind of encompasses all the math and what you look at there, like your debt to equity and your consistent growth rate. Tykr is actually looking at all of that and more. So there’s a lot of rigor and it’s great because it does that hard math for you. Like that in seconds you know what you’re looking for. And then we look at the meaning mode and management. I love your emphasis there on moat because a lot of people overlook that. Like, I get a lot of customers coming to me and saying, hey, I want to buy this oil stock or this consumer staple. Like, think of like a candy. And then I always raise the question, have you thought about the competition? Can you name some of the competitors? Yeah, that’s a good point. And when you start talking to them, you’re like, it’s really easy to create sweets and treats. There’s not a lot of moat there.
[00:17:08.980] – Sammie
Yeah, exactly. But then I wrote about this great analogy the other day. Like right now, what we’re going through up work, I bought in 104. It’s 38 right now. So it’s not that great. But these things happen in their cycles. But this is why I talk about value investing too, because I think it’s important to have a balanced portfolio. So right now, and I’ll rebalance based on where we are in the market cycle. So for example, right now I’m happy to hold JNJ, I’m happy to hold PNG, because these types of companies, right, like if we’re going into a recession, you might not buy those new Bose headphones, but you’re damn sure going to buy Shampoo and you’re damn sure going to buy Colgate toothpaste. Right? Let’s face it, these are things you need to survive. So they’re not going to go anywhere and they’re going to continue posting their three to 5% year on year growth games. And that is awesome because right now you’re seeing some of these growth names get pummeled 60, 70%, and they’re great companies. So it is important because that balanced risk approach that you can move based on where the market cycles are, like in 2020, I was heavy growth stocks.
[00:18:24.910] – Sammie
I’m not so much now, but I still have 30, 40% in some of these sort of fun companies, which I think is going to do well over ten years. They might not smash it next year, but ten years time is hopefully going to be winners. Right. So that’s the way we look at it.
[00:18:41.080] – Sean
So with your tech stocks and some of your riskier stocks, it sounds like you’re not buying as much now. You’re kind of turning your attention towards more conservative, safer businesses, is that correct?
[00:18:52.280] – Sammie
Well, I think it’s like if you’re skimming off the top when these companies were 3%, 400%, some of them are up. Like, I’m taking my money, some of the money there, especially the original stakes off the table and leaving it in a cash position waiting for something to happen. So I think that’s really important to do. So when this market started dropping, yes, I was seeing those companies funnel, but I also had cash to put to work in other aspects. In other aspects. So I am a big fan. I take my salary every single month. I split it down the middle and half goes into my Sip and half goes into my stocks and shares. I sir and the Sips are four K for you guys, right? So exactly the same thing. I put long index on everything in the Sip. Don’t bother with individual stock picking. And then my stocks and shares have a little bit more fun with it. A bit more of a kind of 60 40 high to me. The risk approach, really, because that’s what’s going to make me money that might let me retire tomorrow. I can’t really touch that money because I’m not old enough.
[00:19:53.630] – Sammie
So it’s like, kind of got to add up the two. So, yeah, that’s what I do.
[00:19:58.720] – Sean
That’s awesome. Now that’s one of the questions down the line here, is what percentage sounds like 50% you’re investing. I like the Sip. I’m curious, with that, are you getting a match at all? Like an employee or employer match?
[00:20:12.600] – Sammie
Oh, right. Yeah. That’s actually completely separate. Here in the UK, we have what’s called an employer pension rate. So you have to contribute. You can sign out, but you would never do that because you put 3% of your monthly salary in, but your employee has to match that with 5%. That’s 5% free money every single time you get paid each month. That goes into an automatic pension part. So we have companies like Nest or the People’s Pension, and that gets immediately invested into the All Share Index for you. Most of them are in the vanguard. All share. And that just sits there. You’re not allowed to touch it. You can, when you move companies, close down that pension and then move that money into your own Sip, which is what I do do, so I can keep control of it myself. But right now, I just have my normal company pension running. Even though I own a business, I still pay myself pension because it’s my business. Right? So at the end of the day, that’s how it works. You kind of get 8%, really, of your monthly wage away. And then I actually then put a lot more of that away.
[00:21:22.640] – Sammie
So I’m probably, at the moment, balanced out, probably put about 30 some months, 25% of salary away into investment.
[00:21:32.590] – Sean
Nice. Okay, let’s take a quick commercial break.
[00:21:39.230] – Sean
Imagine this. You’ve been putting money away for years, if not decades, with the hopes to retire someday. But at the average rate of 6%, you realize you have to work another five to ten years longer than expected. Not fun. And this is actually reality for a lot of people. An article from CNBC stated that in order for most millennials to retire by age 65, they have to start saving 50% of their paycheck or they’ll continue working into their seventy s and eighty s. I don’t know about you, but I don’t want to be working well into my 70s if I don’t have to. I want to enjoy freedom. Freedom to spend more time with family, friends, traveling and picking up new hobbies. In fact, I want to retire early. And I think most of you would agree the problem is a 6% return just won’t cut it. But did you know a 15% return can cut your retirement timeline nearly in half? The question is, how do you generate a 15% return in the market? Introducing Tykr, a software that helps beginner and experienced investors manage their own investments. I’ve been using Tykr to generate between 15 and 50% per year, and some of our customers have come forward and mentioned that Tykr is not only helping them take control of their investments, but it’s also helping them match and beat market returns.
[00:22:57.750] – Sean
But don’t take my word for it. Check out our trustpilot reviews to see what people are really saying. Get started today with a free trial. Visit Tykr.com. That’s tykr.com again. Tykr.com.
[00:23:18.570] – Sean
Let’S dive into what other stocks you hold. So upwork is one, what else do you invest in?
[00:23:26.350] – Sammie
So I own SoFi for my sins, which I think is a brilliant business, this is one I will bang on about the moat until I die. I think Antonio Noto is a fantastic CEO and great operator. And some of the products in the way that they’ve pivoted from a student loan company into a financial powerhouse, that I think they’re going to be, they’re very well set up for exponential growth. But the reason why I actually bought them is because on the side of that business, everyone looks at so far and goes, yeah, great, they’re Ram Stadium, but they actually own a software company called Galileo on the side of that too. So if you look into the back end of Robin Hood or Monzo here in the UK, which is one of the biggest digital banks, they are powered off the Galileo software and there’s tons of them. I think you’ve got a company called Dave as well. Is it Dave? There’s a good few lion and there’s a lot of digital banks on this system all over the world. That business actually is going to earn them ten times more money than so far I could ever make.
[00:24:40.270] – Sammie
And it’s completely discounted off the balance sheet and the stock price today. So this is why I’m a huge fan of this. A business is like the discount levels of their business. Another one is overstock. So overstock, actually, finance company, they’re okay, they’re pretty standard business, but on the side of that, they have a venture capitalist arm where they’ve invested in digital wallet systems, crypto technology, blockchain technology, and those companies within that venture capitalist arm have been growing 200, 300% year on year. But that is not being fed back into the stock price, it’s being totally discounted. So this is what I look for. I look for aspects of a business which are not reflected in stock price. When you can find those types of businesses, if the stock price keeps getting beaten down, beaten down, I’m looking at this like, hey, I’ve got a margin of safety of this other massive business here, so I’m cool, right? So this is fine for me. I don’t mind if the stock price drops. And in fact, I’m just going to keep buying because I know in five years, once these other businesses start really take off and people and allies start going, oh, hang on a second.
[00:25:49.560] – Sammie
Where’s that 300 million just come from? Oh, it’s come from this. Let me look at that business. Oh, we need to analyze that. Oh, we need to put that into our price target. Suddenly we’re up here. So that’s why I look at it. Yeah, there’s a lot of businesses like that in the UK, too.
[00:26:04.930] – Sean
I like your strategy there. What we’re talking about here I would put under the meaning section of an analysis is you have a strong understanding of the business model and how it generates revenue. And what you just talked about there, I didn’t know that about. So far, we’re overstock is multiple streams of revenue underneath the same business. That’s a really healthy sign. That’s great.
[00:26:26.790] – Sammie
Yeah, exactly. So even if the main business is failing, that other businesses actually keep it propped up. Right. So, so far is about $6. Last check. Might even be a bit lower than that today. I just can’t get my head around it. For me, it’s like a $23, $24 stock, no problem once you put Galileo into the framework. So depending on how they play that one out and whether or not where they find all that money. But Software is 100% owner of that business, so I just find that fascinating. That’s amazing. Yeah. And here in the UK, there’s a lot of businesses like that. One of the big ones for me is Marks and Spencer. It’s a retail chain network here in the UK. It’s actually the biggest online clothing provider here in the UK. And not a lot of people know that the online clothing business is pretty much completely written off the stock price, and I can’t get my head around that either. And it was a company with a huge amount of debt. They’ve gone through a massive digital transformation. They’re nailing it, they’re hitting the numbers. The growth numbers are going right up.
[00:27:38.960] – Sammie
So I got in a really good price and I’m planning to hold that because I’m looking at the business and I’m going, you’re not counting what I’m seeing on the stock price versus that revenue that’s coming in. So if you can find businesses like that, the other ones are Royal Mail that have a European, which is our Mailing, which is our FedEx. They have a European business, which is absolutely killing it. But it’s. Not in the stock price. It’s just mad. So finding these businesses that’s value investing, for me, they’re operating at way below their value and it’s any amount of time before someone cottons up.
[00:28:16.870] – Sean
Yes, we’re big on with Tykr. We’ve got a point system that really looks at the overall strength of a stock, and then we have margin of safety. You got to check two boxes in order to hit on sale. You got to have a score of ten or higher. Ten out of 20 is the current scoring system. Right now, we’re launching the new version of Tykr here. In the next week, our scoring system is going to switch to 100 point scale. So a 50 point or higher. Just because we have our score, which will go zero to 100, we’ll have our margin of safety, which will go zero to 90%. So circling back here, you got to have a score of ten or higher or maybe 50 or higher, and then a margin of safety of 50% or higher.
[00:28:59.070] – Sammie
That’s amazing.
[00:28:59.970] – Sean
Yeah. So it lines up, those two. And if you got two boxes checked, then you get on sale. And then we’ll have a four M analysis which kind of walks you through how to look at the margin of safety. It does it for you, then it helps you with the meaning, mode and management. We even tie into or help you utilize glass door for the management side because there’s a correlation there with employees that work like working at a company. There seems to be a higher performance in the stock prices. I remember an investor talked about that, which is pretty cool.
[00:29:33.250] – Sammie
That’s amazing. I think it’s wonderful what you guys are doing. Like having those kind of tools available, especially to a retail investor that perhaps doesn’t necessarily have the experience or even the want as well. To have that experience, that’s a big thing, right? People are busy, man. You can’t expect everyone to sit there and start reading apples and reports from 2016 versus all this stuff. Don’t do it. Just use the tool like you guys have created, that you feel comfortable and that you trust. And if it starts giving you good results, then happy days. So that’s the way I see it. There are a lot of tools out there right now. So that’s what we’re big fan talking about, these opportunities and these tools which can sort of take that stress away from you and just allow you to be an investor without having to do all of the hard work.
[00:30:22.000] – Sean
Yeah, right. Like nobody wants to learn it’s like learning a different language, looking at these financial statements and discerning things. It really is.
[00:30:30.170] – Sammie
But for geeks like me, I really enjoy it.
[00:30:33.910] – Sean
Absolutely. Yeah. I wanted to share the context here because I always love when somebody mentions a few stocks. So I like to mention how are they performing in Tykrs? So here’s a quick rundown overstock it’s on sale. It’s got a ten out of 20 and a margin of safety at 80%, which means share price today is 33, but sTykr price is 168. So a lot of upside potential. That’s good.
[00:31:00.100] – Sammie
Nice. I have a TP of escort.
[00:31:05.350] – Sean
Okay. Not far. Nice. Yeah, so far I love what you said about the business model, probably adding it to my watch list. But in Tykr right now, it’s a score of nine and a margin of safety of 14. So a slight some upside potential, but not as much. Again, I don’t think it’s in your case. I wouldn’t give up on it, the business.
[00:31:25.210] – Sammie
Excuse me.
[00:31:25.860] – Sean
You really check the box and then upwork. It’s got a five out of 20 in the margin of safety, 1%. So that’s the weakest of the bunch.
[00:31:37.630] – Sammie
Worth keeping us taking a look ahead. What’s the margin?
[00:31:42.510] – Sean
We go five years back, we look at over 50 data points.
[00:31:46.250] – Sammie
Oh, nice.
[00:31:48.070] – Sean
I’ll just rattle them off here. We look at the revenue, net income, and then EPS on the income statement. In the cash flow statement, we look at free cash flow, and then on the balance sheet we look at assets, liabilities, debt and equity. We take all those points, go five years back and look at the year over year growth between each and our platform. This is what really makes us one reason why we’re different is it’s all open source. So the calculations you can see on Tykr.com, it’s all free. You can literally take it and go create your own version of Tykr. Of course, we always tell people, please.
[00:32:24.500] – Sammie
Stay with us, but you can always go.
[00:32:26.950] – Sean
You can certainly go create your own burden.
[00:32:31.570] – Sammie
That’s great.
[00:32:34.150] – Sean
I think of the three, even though overstock is the best rated in Tykr, I still say so far, business model wise, I tend to lean towards because I own mostly tech and a lot of enterprise tech. And you’ve got that enterprise play, the transaction fee element that is so scalable.
[00:32:53.230] – Sammie
I think it’s awesome. They basically brought personal finance into one space. No one had really done it well before. There’s a few that have tried, a few of the high street banks tried, but these guys have got that kind of millennial gen said market. Like in the parmesan, it’s like it’s super cool. You can invest, you can take loans, you can get better rates, you can do all your banking. I think it’s awesome.
[00:33:16.940] – Sean
Yeah, I agree. How many stocks do you hold total?
[00:33:21.730] – Sammie
Okay, yeah. Good question. So currently as of today, is 32. That varies a lot between the years. Sometimes I’m up to sort of just below 40, but I will quickly bring that back down. I try to always be sort of 25 to 35 within that bracket, sure. But it really depends. If there’s some massive opportunities out there and I can’t say no, then I will dive in. But I really do try and stick to sort of a 5% rule. I really don’t want anything to go above that. And I’m a big advocate of trimming. I think it’s really important stocks had a good run. It’s going to come down at some point. It doesn’t keep going up forever. It’s just the way it is. So if you’ve got a chance to take your money off the table that you’ve already put in, take that opportunity and then wait for a better price point. I believe that I’ve been doing that for years and it’s paid off for me. I always like having some cash on the side, so I’ll never be 100% all in.
[00:34:28.470] – Sean
Sure.
[00:34:29.470] – Sammie
So I just think it’s really important, especially right now, before I’ve probably all been buying the depth since January, but.
[00:34:38.820] – Sean
That’S the way it is, right? We call it stockpiling. Again, this is another phrase used from Phil Town is you want to be buying as much as you can when the market’s going down. One of his favorite lines he’s quoted is, when the market goes up, we make money, but when the market goes down, we get rich.
[00:34:58.750] – Sammie
Yeah, that’s what we’re saying to all of our readers right now. We’re getting messages left, right and centre, and we got started last year and we’re down 26%. And I’m like, yeah, that’s great. Keep going. When we first had this conversation, what did we say? We said ten years on an absolute minimum. So that’s one of the things that we stress. Ten years at an absolute minimum. We won’t be having that same conversation in ten years. I can almost bet my house on it. I had a really good saying the other day, actually, on the Motley Fall podcast, Money radio show. They said if you bet on making a profit in one day from the Vanguard Total Stock Market Index, you have a 51.1% chance of making a profit. But if you left that money there for ten years, that percentage goes up to 97.8%. I will take that bet every single day of the week, right?
[00:35:53.260] – Sean
Yes. I love the show, by the way. I listen to Marley Pool Money, one of my favorite shows as well. That’s an amazing statistic. It shows you the power of patience, right?
[00:36:04.730] – Sammie
It’s so easy to teach people, and if you show them that and actually, if you’d a dollar cost average for every month for those ten years, you’d be a millionaire with the right investment amount. I will stress that if you’re putting small amounts, of course you won’t be, but you would have made money. I believe in that ten years with my whole heart. Sure.
[00:36:25.820] – Sean
So we know what your strategy is. Let’s talk about the results here. So can you share with us your returns, you know, what your returns were in 2020 and how about your returns in 2021?
[00:36:35.800] – Sammie
It’s a really mixed year. I was actually 2% down in what year? In 2021?
[00:36:41.880] – Sean
In 2021, you were negative two. Really?
[00:36:44.640] – Sammie
Yeah, I was negative two, yeah. I had a Storming 2020, though, so I was 61%.
[00:36:52.160] – Sean
Okay.
[00:36:52.830] – Sammie
So I was paying for it, and I got that. I made some portfolio changes around about February of 2021 that didn’t really pay off. And we all do it. We all do it. We will look up and go, you think you made the wrong decision? And I actually went and moved again, which was the wrong move twice. So I got stung twice. But that’s fine because I’ve made probably 20 good correct decisions before that. Even before the Pandemic portfolio was 21%. Year on year, I’m operating before this year, I’m operating at 21.1% average over six years. So it’s pretty solid. But yeah, right now it’s pretty tough.
[00:37:40.930] – Sean
That’s really good. I know. I was talking to another customer of ours. He was referring to Tobias Carlyle’s strategy, and we’re talking about his returns, which we’re breaking it down. It was only a percent better than the SMP 500. And I like Tobias, I’ve read one of his books. Good guy. His strategy is somewhat value, somewhat anti value, in a way. But I think the average returns in SMP 500 last ten years are like 14%. He was returning about 16%. So you had 20. That’s really nice work. That’s great.
[00:38:16.260] – Sammie
It was thanks to a couple of absolute Stonking winners. And that’s the way it is. I’ve done really well off Tesla, I’ve done very well off Netflix, and I sold. I was lucky to sell at the peak and lucky not to ride it all the way down. So I’ve had some fantastic winners along the way. And there’s some fantastic services out there, which I think people should check out. And there’s a tech iron at the IO Fund. You should check those guys out. IO Fund. So they do deep analysis into tech stocks. So, for example, they picked Roku, and it was like 21, and they ride it all the way up and they tell you when to come out. I’ve done very well off those guys because they send you these beautiful nuggets right before they’re about to take off. And yeah, they’ve made some good returns. But I also listened to Howard Lindsey as well from Panic of Friends. I don’t know if you’ve checked him out. He’s a guy from Phoenix, and he’s venture capitalist. He was the founder of Stock Twits.
[00:39:27.750]
Okay.
[00:39:31.190] – Sammie
He’s got a podcast. So he talks about investing, crypto, NFC, all these types of things, but he kind of takes this step back approach and lets the guests talk about what they’re interested in and then kind of actually really kind of takes the piss out of them a little bit, which is quite good fun. I would highly suggest checking that out because I’ve definitely picked out a couple of really golden nuggets from some of those podcasts.
[00:39:56.910] – Sean
Sure. Well, hey, I’m at time here, but I really want to get you on again. And to the listeners out there, they’re seeing a trend. There are some people I bring on. We talk about a few stocks and we break down the four ends, essentially, of three stocks, and I want to get you on in the next few.
[00:40:15.610] – Sammie
Weeks, see where they win.
[00:40:17.240] – Sean
So, yes, let’s do that. Let’s get all right, start thinking about three stocks. We’ll get you back on. But I want to ask one question here. It’s a fun when it’s a time machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?
[00:40:32.970] – Sammie
I would go back to 18 and I would have changed my university course. That’s what I would have done. I studied music because my family did it and I was never any good, and so I would definitely have done something cooler.
[00:40:56.910] – Sean
Finance or business, maybe.
[00:40:58.670] – Sammie
Yeah, there is more. I definitely would have done business like, I should have done business, but, yeah, I wanted to be a musician. Man, I suck.
[00:41:09.670] – Sean
Well, I’ll turn it over to you. Where can the audience reach you?
[00:41:13.270] – Sammie
Yeah. So we’re at up to Gains, Co, UK or up the gamesmoney on Twitter and Instagram. You can check us out on LinkedIn as well. Personal pages. Samuel King. So, yeah, come say hi. Check out some of our articles. Investing for Beginners Academy as well. There’s loads of stuff in there we can start from what is the stock? Right through to some cool strategies or apps or anything like that that you think can help you. So, yeah, we’re kind of an open book, really. We just love helping people and getting them started and seeing their journey. So that’s us. Up the games book code UK Nice.
[00:41:50.430] – Sean
Well, thanks a lot for your time, Sammie.
[00:41:51.710] – Sammie
This is great. No worries.
[00:41:59.330] – Sean
Hey, I just want to say thanks for checking out this podcast. I know your time is valuable and there’s a lot of other podcasts out there you could be listening to. So thanks for taking the time to listen to my guest story. If you did enjoy this podcast episode, could you head over to itunes and leave a five star review? That would be much appreciated. Thank you. And last but not least on this podcast, some episodes we do talk about stocks. And please keep in mind, this podcast is for entertainment purpose only. So if you did hear any buy or sell recommendations, please don’t make those decisions based solely on what you hear. All right? Thanks a lot. See you.