Footsteps To Fortune
Richard Cluver

ISBN 0-9583067-5-3
©2003

Table of Contents

• The Secret of Personal Wealth
  How to become debt-free and develop the savings habit that will put you soundly on the road to financial prosperity.

• Creating start-up capital and saving on taxes
  Why pay more tax than you need? Setting your financial objectives and developing a strategy for getting there.

• Time for some self-assessment
  Getting to grips with risk and reward. How to spread your investment risk in order to minimise the impact of financial disasters. Types of investment and their risk/reward profiles.

• Mastering the stock exchange
  Understanding how the exchange operates, the costs involved, how to choose a stockbroker.

• Types of securities and how they are traded
  Stocks and Shares, Gilts, Equities, Preference Shares, Debentures, Options, Short sales, Futures, Puts and calls, warrants.

• The market cycle
  Why markets rise and fall in value. How to turn these cycles to your advantage.

• The search for enduring quality
  The characteristics that distinguish a Blue Chip share. The importance of consistent dividend payments. The value of market gossip. Trading short-cycle shares. Dividend Yield. Splits can be profitable.

• Dividend yields as an indicator of value
  Seeking a means of uniformly valuing shares. Don't confuse price with expense. Overbought/Oversold. Price earnings Ratios. Market Capitalisation. Be careful of declared earnings.

• Observing share price bias and developing an index of value
  Beginning the initial steps of mixing a cocktail of fundamental statistics in order to derive a means of comparing the value of one share with another and consequently determining whether it is under-priced or over-priced.

• A high daily traded volume is essential
  The inherent dangers of investing in shares when only a small proportion are in public hands.

• Comparing balance sheet statistics
  What you can observe by comparing historic balance sheet data.

• How profit growth influences share prices
  Over time the earnings growth rate of a company is reflected in the price trend of its shares; and why this is best measured by the trend of dividend payments.

• Refining the share selection process
  Why a very long history of rising dividends is a vital ingredient if you looking for a secure investment_but why such shares do not always provide the fastest price gains.

• Return on capital employed
  Getting to grips with how efficiently companies make use of the money entrusted to them by their shareholders.

• Evaluating debt/asset ratios
  Understanding capital gearing and when it is smart for companies to use borrowed money. The profitable relationship between mine operating costs and share prices. The importance of economic cycles.

• Don't forget the Auditor's and Chairman's reports
  It is an essential routine check to scan the Auditor's report and just as important to compare historic chairmen's predictions with how the company subsequently performed.

• Why you should avoid being stuck in a company delisting
  How companies profit from listing on the stock exchange and why you should avoid holding their shares when they plan to de-list.

• A safe company has a broad profits base
  Companies with widely diversified earnings sources are the best equipped to ride through the economic cycles, but the best share price gains often come from single product companies.

• Evaluating a gold mine
  How to interpret gold mine production statistics.

• Getting started on technical analysis
  How to draw and understand trend lines.

• Fitting the curves with moving averages
  How to calculate a range of moving averages and use them for timing your buying and selling decisions.

• Measuring market cycles
  An evaluation of the numerous attempts to graph and interpret market cycles: Gann theory, Elliott Waves, Granville, Fibonacci numbers, Fourier Transforms, Kontratieff super cycles.

• Momentum-based analysis
  Understanding the concept of price velocity and momentum Overbought/Oversold, Relative Strength Index, the development of an efficient Velocity Indicator.

• Volume-based analysis
  An evaluation of numerous attempts to create an efficient prediction system based on the relationship between share price movements and traded volumes culminating in the development of my own Mass Indicator.

• Price volatility
  As share prices move towards extremes which with hindsight can be identified as major turning points, there tends to be a widening spread of daily prices which offers a useful indication of pending change.

• Putting it all together
  The initial steps towards developing a strategy which integrates fundamental balance sheet analysis and chart-based market timing in order to be able to buy and sell blue chip shares for optimum gains.

• How to create an index of value
  Taking the Index of Value concept to a more advanced stage, noting bias in the relationship between corporate profit trends and share price trends. When it is an advantage to hold high bias shares and when it is not.

• Determining when a share is cheap
  Low prices do not necessarily signify cheap shares and vice versa. How to effectively value a share in order to be able to spot underpriced opportunities.

• Developing a personal strategy
  It is important to assess your own attitude towards risk and reward and plan your investment strategies accordingly.

• Structuring a portfolio
  Balancing risk with reward; how many shares should there be in an ideal portfolio. How to create a long-term systematic buying and selling approach towards that will lock in value into a portfolio.

• Why Buffetology does not work for the small investor
  US unit trust guru Warren Buffet is famed for his claim that by locking into quality at the start, he never needs to be a seller. Is this approach feasible?

• Gilts and Bonds are a profitable refuge when the share market turns bearish
  All about the Bond Market and how it is traded. How a gilt is valued. Gilt options.

• Using Warrants to insure your portfolio against risk
  Understanding Warrants and how to trade them.

• Putting it all together
  Understanding that all markets are cyclic, the smart investor knows how to switch his money from one investment to another to safeguard and grow his capital.

• The Final Word