ABCsofGas is a free resource for both new and experienced traders. ABCsofGas uses simple technical analysis (quantitative and technical) in the context of current market psychology to predict future stock market movement. Zeeshan Maqsood (The author) graduated from Marianopolis College with a D.E.C. in Honours Commerce. Zeeshan is currently pursuing his Bachelor of Commerce degree at the John Molson School of Business with a major in Finance.
Our Philosophy Investing for the long term
We analyze companies in terms of long-term return potential and invest in them only when their stock is trading at a discount to intrinsic value. This approach allows us to minimize transaction fees and contributes to reduce the tax impact of capital gains.
Fundamental research
Investors who enjoy the greatest success over the long run are those who focus their energy on gaining a solid understanding of the companies that they invest in, instead of speculating on the market’s or the economy’s movements in the short term.
Our efforts are focused on ferreting out companies whose stock is trading at below intrinsic value. Our time is spent reading through the financial reports of companies, analyzing their historical performance, their balance sheet, the quality of their management team and their capacity to generate strong cash flow over the long term with an acceptable return on capital.
Permanent value destruction and margin of safety As investors, the biggest risk that we run is that of value being permanently destroyed. This is something that can occur for a number of reasons. For example, a product that accounts for a large portion of a company’s sales can become obsolete if a competitor introduces a superior product.
The best way to protect against this sort of risk is to invest in sectors where barriers to entry are high and where companies have a solid earnings track record. Moreover, we consider a margin of safety essential, that is, stock should be purchased only when trading at below intrinsic value.
A margin of safety is critical because most of the analysis of a company hinges on estimates of future profitability. As our ability to predict the future is less than perfect and rests on assumptions that can vary over time, a margin of safety affords added protection in the event that initial hypotheses prove overly optimistic.
