Calum Steven, also known as Lordfoofoo, is an Imperial College London Physics graduate with an impressive Master’s degree in Quantum Theory. But that’s not all. He is also a Popular Investor and recognised by eToro as having a value investment strategy, who sets a high goal — with plans to beat the Chinese, European, and US markets. Find out how he plans to do it in this interview.
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Tell us a little about yourself!
I’m Calum; I’m 23, 50% English, 50% Scottish… and 100% nerd. I graduated from Imperial College in physics, where Stephen Hawking once nearly ran me over. I then studied quantum field theory and general relativity at the University of Nottingham (I loved every minute!). I enjoy reading, watching TV, and playing chess. I also got engaged this week to my wonderful fiancée Jess.
Tell us about your financial background.
Outside of eToro, I’m a business strategy analyst in financial services, where I’m currently building a machine learning valuation model. The analysis I use in my job is the same kind of research I use for investing, utilising various metrics and models, and a strong understanding of the business behind the numbers.
What is your strategy, and have you changed it recently to adapt to the volatile markets? Where do you do your research?
I have recently been recognised as an official value investor by eToro! Value investing is all about buying a company at a discount to its intrinsic value, mainly determined by earnings and growth.
I thrive in volatile markets, as generally a volatile market is less efficient, meaning that stocks can deviate more significantly from their intrinsic value than typical market conditions. Meanwhile, to reduce volatility in my portfolio, I have been gradually increasing the number of stocks I hold.
For my research, I use various stock screeners to generate a shortlist. I then use spreadsheets to track and compare the stocks I’m interested in. I’ll read analysis on Seeking Alpha or read earning reports to get a sense of a company’s potential and any investment risks. I’ll use my research to calculate an intrinsic value and then invest in stocks with the most considerable discount, with larger weightings towards my most potent convictions.
How has eToro changed the way you trade?
On eToro, you can invest in equities from around the world. This allows me to diversify between different countries and take advantage of the disparities in other markets’ valuations. The average PE of an index is the strongest indicator of its future returns. I use it to weight my portfolio towards countries with more substantial potential returns.
Which assets or industries do you have your eye on now?
UK housebuilders are the current favourite. There is a great demand for more houses, and housebuilders are very cheap, despite strong growth. Brexit, COVID-19, and changes to planning laws have pushed stock prices down. COVID-19 and Brexit should be resolved within a year and won’t have any long-term impact on housebuilders. The planning changes are actually to encourage growth in the housing market. Still, investors are worried about short-term delays during the transition; this creates excellent opportunities for those with a long-term view.
Another concern is that a rise in interest rates could impact house prices. Meanwhile, banks are cheap right now for the opposite reason: that we could be in for a prolonged low interest rate environment. I’ve hedged my bets by owning both banks and housebuilders.
What was your favourite trade over the past 12 months?
One of my most profitable investments of the last year was investing in Canadian Solar, which I bought at around $15 a share and sold for around $30 a share. The company was very cheap, with a PE just above four, despite excellent growth prospects. The company was barely sold off after one of its earnings missed expectations. After reading the conference call in detail, it was clear that the miss was due to short-term delays in the sale of some of its solar projects. The intrinsic value is unaffected by which quarter a deal falls into, making this overreaction an excellent entry point to an undervalued stock.
Do you invest in any asset classes outside of stocks, commodities, and crypto?
No, I don’t even invest in commodities or crypto. I only invest in equities. I also never short sell.
What is your long-term trading goal?
I aim to beat the market, by which I mean beat every market. I invest in European, American, and Chinese stocks, and I aim to beat the indexes of all of them. For the three years I’ve been on eToro, I’ve beaten all of them and made average annualised returns of more than 20%. As well as great returns, I never plan to stop learning and improving.
Any message to copiers or potential copiers?
I’m a long-term investor, so, for the best results, make sure to copy for the long- term and copy open trades. Thanks for your trust.
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