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The Value of Contrarian Investing



Lloyd Barclay, a Canadian expatriate living in Nagoya, has been an active investor for over 10 years. As his stock portfolio grew, he realized that many individual investors could benefit from his investment experience. So he set up his website (www.lloydbarclay.com) to share his insight for picking stocks and managing a portfolio. Visitors to the site can read about the strategies he employs as well as have a look at the history of his investments since he started the site in September of 2004. The site also gives guidance on how to set up your own investment account. We sat down with Lloyd to talk shop.

Japanzine: What can visitors expect to get from your website?
Lloyd Barclay: Viewers can get a sensible system of picking and managing stocks based on value and contrarian characteristics.

JZ: Can you explain that?
LB: Sure. Value investing is buying stocks at prices that are low in relation to earnings and/or asset value. Contrarian investing is purchasing stocks when their prices have declined significantly because the market has over-reacted to bad news. Take, for example, the Argentinean financial crisis. That turned out to be a good time to buy Argentinean stocks.

JZ: Where did your system for selecting investments come from?
LB: I wrote an essay that incorporates principles from the investment courses and investment books that I have studied (a list of which is available on the website). While I found each book to be useful, they looked at investing from different perspectives and placed different priorities on different factors. Some focused on buying cheap stocks (in relation to earnings and asset value), while others emphasized qualitative factors, like growth potential, but were not specific on what price should be paid (in relation to earnings and asset value). The investment essay integrated what I thought were the most important factors for making investment decisions.

JZ: Do you review the stocks in your portfolio regularly?
LB: Yes, I review the financial statements quarterly (every 3 months) to find out whether there have been significant changes to the financial condition of the companies and the stock that I recommend. I also check insider trading to see if insiders have been buying or selling stock. But I don’t spend too much time reading online news articles about the companies, because the good or bad news in them is often exaggerated. Many investors over-react to current news and under-react to each company’s longer-term accomplishments. If the news is significant, it will almost always show up in the numbers in the financial statements.
JZ: So how many people have visited your website?
LB: About 12,000 people from 73 countries have visited the website roughly 25,000 times. More than 600 of those visitors have signed up for the newsletter.

JZ: And what do you hope to gain from your site?
LB: I am preparing for a career in securities. One option is to start a web-based business. I am also considering becoming a portfolio or mutual-fund manager.

For more information on Lloyd’s portfolio and how he picks investments, surf over to: