The worst investment mistake you can make

Falling in love with popular stocks is a mistake that even professional investors make. But they are almost always overbought and overvalued. The way for a private investor to beat the City is to buy stocks trading below their true value. Simon Caufield explains how to find them.

What do you think of Fortune magazine? To me, it's the magazine that rich people read. And what's the most important financial goal for rich people? Of course, it's to stay rich after inflation.

So when, ten years ago on 14 August 2000, Fortune put together a list of "ten stocks to last the decade", it should have been worth reading. The magazine predicted: "a few major trends will likely shape the next ten years. Here's a buy-and-forget portfolio to capitalize on them".

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Simon Caufield started out as an engineer and has an MA in engineering from Cambridge. This was followed by an MBA from the London Business School.

 

After graduating, Simon worked his way up to become a Management Consultant for banks and insurance companies. This gave him the chance to see the city from the inside.

 

In 2001, Simon started his own company to develop software designed to price banking services, such as loans and deposits. After growing the company to 100 employees, he went on to sell this in 2007, looking for his next challenge. 

 

Also during 2007, Simon ‘sacked’ his fund managers and took complete control over his investments.  Now he devotes all his time to investing and is an angel investor to help start-up companies. He has built up a reputable 20 years in the industry.

 

Simon writes his own investment newsletter – True Value. This follows the strategy he established in 2007 and is based on assets that are priced way below their true value.  He scours the worldwide markets for equities, bonds and alternative investments to find opportunities that fit his conservative and contrarian approach.