The SFI Report

The honest (and somewhat brutal) truth about investing

The game has changed.

It’s not the roaring 90s (or 00s!) anymore. Things are different now.
What may have worked in the past does not work the same way it did.

We exist on shaky foundations. Investors have to deal with:

  • Baby boomers retiring and putting a gigantic burden on the younger age groups;
  • Systematically high levels of debt across all major governments and countries;
  • Artificially repressed interest rates, causing sensible savers to suffer at the expense of reckless spenders;
  • Dramatically high rates of inflation on our core goods like food and petrol;
  • A financial community that cares about one thing – how to make more in fees from your investments; and
  • Hedge funds spending billions of dollars on high frequency trading robots designed to take money directly out of investors’ retirement savings.

It’s not easy being us. Unlike the generations before, we cannot rely on a debt-fuelled bull market.
The world needs less debt not more if it is to thrive. We are in an age of deleveraging, an age of low growth and an age of risk.

Our market is not propped up by solid fundamentals. It exists only at the mercy of the printing press – and central banks that have no qualms using it, and damn the long-term consequences. Meanwhile, the careful and responsible saver suffers the effects of this financial repression. The interest they were relying on to retire or even to stay alive is simply not there anymore.

It’s not fair and it’s not easy.

But the fact of the matter is you can’t avoid investing.

It’s baked into the cake.

If you sit back and leave your investments in the system to be run on autopilot by the financial industry, then you will experience a dramatic and negative impact on your future lifestyle and wealth. And you can’t simply leave your money in a bank account anymore – it is actually losing value due to inflation. It’s time to make a choice.

To choose to invest better.

You know you can take steps to create your own financial destiny. That is why you are here reading this. It’s why you have ventured outside the financial matrix and are searching for a better way. And that’s why I’m here. To show you a better way. It’s not as easy as some might like, but it’s certainly there.

Read on to journey down the investing rabbit hole like you never have before.

Kindest wishes,
Sam Eder
Founder, SpoonFed Investor & Author of the SFI Report

How to invest in this day and age

The interesting truth is that the successful investor today is not much different from any successful investor in history.

The difference being you could get away with not investing correctly in the past twenty years (somewhat!) because you could ride the debt-fuelled bubble (until it burst in 2000 and then again in 2008 of course).

Today, you need these five things to take control of your financial destiny:

  1. You need to understand market types and what to do when they change;
  2. You need to free yourself from the tyranny of compounding costs;
  3. You need to realise that you achieve your goals through position sizing and exits, not stock picking;
  4. You need an edge over the market. To invest like a casino;
  5. You need a plan in place to capture once-in-a-decade opportunities for spectacular profit.

These five tools will give you the knowledge you need to invest for life and create the destiny that you deserve. Without them, you leave yourself at the mercy of an uncaring financial community and a fickle and shaky stock market.

So buckle up and put on your learning shoes. It’s time to change the way you think about investing. Forever.

The SFI Report

The SFI Report

A monthly stock market investing report, to help you invest better and become financially free.

  • Build wealth through value investing
  • Adapt to changes in the market type from bull to bear
  • Save time in research and planning
  • Save money in fees
  • Comes with built-in position sizing and exit rules
  • Gain an edge over the markets
  • Be prepared to capitalise upon once-in-a-decade opportunities for spectacular profit
  • Beautifully simple and easy to get started

Sign Up for a $1 Trial

60-Day Risk-Free Money Back Guarantee

Firstly, you need to understand market types and what to do when they change.

Would you invest the same way in a slowly rising market compared to a rapidly falling market?

I bet you said a loud NO. Expecting the same strategy to work in one market type as in another is not the safest belief to have.

There are up to 25 different market types, according to market wizard Van K. Tharp. Here are the four main ones:

  1. Bull (a steadily rising market)
  2. Bear (a steadily falling market)
  3. Sideways Quiet (an inactive barely moving market)
  4. Volatile (a market that rapidly swings up and down).

Each market type requires its own approach.

In a bear market type, you don’t want to be buying stocks (until it bottoms). Instead you want to use an approach that allows you to actually profit from the fall.

In a bull market (like we are in now), you could invest in stocks and look to hold them while they go up with a trailing stop.

In a volatile market, you adjust your stop-losses to protect gains. In a quiet market, you “stalk” the breakout into a new market type for a low-risk, high-reward investment opportunity.

When the market types change, you can switch between approaches, rather than doing what most investors do – hold on and hope!

Secondly, you need to free yourself from the tyranny of compounding costs

Tyranny is a powerful word.

It speaks of dictators and oppression.

Unfortunately its apt for today’s investing environment, more so than ever.

In a world of 8–10% returns in the 1990s, a 1–2% fee was (considered) easily justifiable, but in today’s world when long-term returns are more like 4% (by long-term I mean over 10 years), fee structures have not adapted.

The financial industry that glutted itself in the 1990s has certainly not had a change of heart since then.

In fact it is worse than ever. A 1% fee eats up 20% or more of the typical investor’s returns. Some studies suggest that fees could be as high as 2.98%* or up to 45% of your returns.

And you need to be careful.

A seemingly low-cost “industry” fund will quite happily tell you they charge a 1% fee and then go and invest the money you give them in another fund they own that also charges a fee. Its hidden fee piled upon hidden fee.

There is a better way. And that way is to remove yourself from the web of fees.

Get back to the good old days of compounding returns and free yourself from the tyranny of compounding costs.

Thirdly, you need to realise that you achieve your goals though position sizing and exits, not stock picking

Did you know it was proven by money manager Tom Basso in a real money experiment that you could trade a random entry investing strategy and make money by using position-sizing rules?

That is the power of position sizing.

What is position sizing?

Let’s start with a list of what position sizing is not.

Position sizing is not:

  • Asset allocation i.e. having the right mix of stocks and bonds;
  • Buying the same number of shares each time you invest;
  • Investing in large cap and small cap stocks;
  • Or any of the other “common wisdom” preached by the investment community.

(The truth is that even those in the investment community who understand position sizing ideas, can’t practice them. They are simply too big. This is where we, the everyday investor, have a real advantage).

Position sizing is:

  • A series of rules about “how much” of each stock you should trade to meet your long-term goals and effectively manage your risk depending on the quality of your investing system.

A bit of a mouthful, yes. But it’s super important. If you can master this idea, it will transform your investing for life. Why?

Because it is the number one thing that investors get wrong. It has the power to make or break your finances.

Investing is an uncertain endeavor. No matter the research you put in or what an expert “says”, there is a chance that the stock you purchase will go down rather than up.

Position sizing allows you to limit this risk by taking small losses and preserving your money to fight another day. But much more than that. As well as protecting you from risks, you can use position sizing to your great benefit.

Position sizing can help you accumulate stocks in a way that takes advantage of big trends. It allows you to invest more in ideas that have a better potential for reward and to take capitalize upon unique opportunities that come along only once or twice in a decade.

Know when to get out

Before you enter into any investment, you should have a clear idea of when you want to get out.

An all-too-common mistake is to buy a stock, and not considering when to exit, to see a large profit reverse and turn into a loss. If you have invested before I bet that has happened to you.

Each investment should have a series of exit rules that:

  • Keep any losses small
  • Let profits run
  • Are clearly defined before buying
  • Adapt to current market conditions and the movement of the stock.

If you combine a simple yet robust position-sizing strategy with a set of clearly defined exit rules, you have a powerful investing formula – no matter what stock you pick.

Fourthly, you need an edge over the market. Like a casino.

My colleagues in the financial community won’t like me saying it… Investing is like gambling.

But instead of being like the punter who goes to the casino and is guaranteed to lose over the long-term, you want to be like the “house” who is guaranteed to win over the long-term.

To do this, like a casino, you need a built-in edge. If you have an edge, then your position-sizing strategies will be given time to kick in and you will be able to achieve your goals. This is the part where stock picking comes in handy.

Remember when I said Tom Basso traded a random entry system and was profitable using position sizing? Well, while that system worked, it was pretty average.

Instead, wouldn’t it be great to have a positive expectation of a profit every time you bought a stock? You can.

Imagine for second that you could go shopping every day and buy goods on sale for 20% to 30% less than their value…and then return a few months later to sell them back to the store owner for their fair value price, booking a 20% or 30% gain.

I bet you’d be shopping there every day! I would be. That’s what you can do through the irrational behaviour of the stock market.

Each month the finest quality goods are on sale for you to snap up, if only you know where to look. It’s what old man Buffett has been doing for decades. It’s called value investing.

The proven strategy of the world’s greatest investor

While you won’t be investing the same way as Warren Buffett (you invest differently when you have billions), you can have the same value-hunting mindset.

By understanding a company’s financials, you can buy stocks that:

  1. Have very little or no debt;
  2. Are generating a ton of cash for the amount of money invested in them;
  3. Are undervalued by 20% or more;
  4. Have a hard to replicate business advantage; and
  5. Are in a favourable industry to the current investing landscape.

There are other things too, but if you simply invest in companies like this in the right market type, you will have a significant investing edge.

The importance of technical analysis

Have you ever heard the investing idiom, “Never try and catch a falling knife”?

The last thing you want to do as an investor is buy a falling stock because you think it seems cheap, only to sit by watching it drop. But this is the problem most value investors face.

They are often required to suffer through an initial loss on their position while they wait for their stock to find a bottom – or they get stuck in a “value trap”. Value traps occur when the stock looks like a bargain, but then never seems to rise.

The good news is there is a way to “time” the purchase of the stock to give you an additional edge.

You can use price charts to look for value stocks that are showing signs of strength. These “technical” signs are often an indication that buying momentum is setting in, which can give high quality stocks a real boost, and improve your investing performance in the process.

Furthermore, technical analysis is key to good stop-loss placement and efficiently capturing profits.

Finally, you need a plan in place to capture once-in-a-decade opportunities for spectacular profits

The madness of crowds is seen no more clearly than in the stock market.

Extreme moves, driven by fear and greed, occur often. Here are a few ones you may know about:

  • 1929 Wall Street Crash
  • 1987 Black Monday
  • 2000 Dot-Com Crash
  • 2008 Housing Market Bubble.

Studies show that on average every 4 years the market falls by 15% or more.

For most investors this is a disaster. They are unable to adapt to the change in market type and tend to do the opposite of what they should, such as sell at the bottom when they should be buying.

Though we would prefer not to have to go through the inevitable crashes, they do present the very best opportunities for those who are ready. You have high quality stocks on sale everywhere. Sometimes you can even buy stocks for less than they have cash in the bank.

Take advantage of one or two of these in your lifetime and it can transform your finances. It’s not easy, though, to be buying when everyone else is preaching the end of the world.

You need to be prepared. You need a plan. A plan that is in place before the crash happens. You need to be ready to pounce when the time is right. Without a plan, emotions will take over and you will miss out.

Fear is the mind killer. The way to overcome fear is through careful preparation and disciplined application of your pre-prepared plan.

You need to know:

  • What to buy
  • When to buy
  • How much to buy
  • What to do if the market continues to drop, and
  • When to sell to book profits.

With these elements in place, you can be ready to capture some of the spectacular profits these opportunities represent.

So our journey is coming to an end. You now know what it takes to be a successful investor in this day and age. But there is more yet. A way to simplify your investing; to take these concepts and make them your own with a minimum of fuss.

Invest better with the SFI Report

The SpoonFed Investor (SFI) Report takes a comprehensive stock market investing strategy and distils it down into simple actions for you to take.

Investing itself does not need to be time-consuming. More is less for most investors. Once you have set up your investing account, you need only spend a small amount of time with our report to invest like a true professional.

In contrast, the planning process needs to be through and constantly worked at. That is what we do. You get our time, effort and experience all for one small monthly fee in our monthly investing report.

Our beautifully simple approach to investing will help you to:

  • Adjust your investment strategy when the market type changes;
  • Free yourself from the tyranny of compounding costs;
  • Achieve your goals though position sizing and exit strategies for each stock;
  • Gain an edge over the market by buying high quality stocks for at least 20% below their value (when they have upward momentum);
  • Be prepared to capture once-in-a-decade opportunities for spectacular profit.

It’s easy to get started

Our investing report is designed with you in mind. Having worked with thousands of traders and investors over the years, we know where you are likely to get stuck.

So we have built our investing report in a way that makes it simple to get started, but offers just enough depth for experienced investors to thrive.

Getting started early can have a remarkable impact on your future wealth and happiness

The biggest investing challenge you will face is yourself.

Investor apathy is the number one reason investors don’t achieve what they want to out of the markets. It’s also the number one reason the financial industry continues to thrive on such unethically high fees.

Don’t let apathy get the best of you.

Be different. Be the investor you want to be.

You can get started with the SFI Report for only $1.

Some of the nice things about the SFI report are:

  • There are no contracts
  • You can claim the cost back from the tax man. 
  • We are regulated in Australia by ASIC
  • You get a risk-free money back guarantee.
  • Much cheaper than a financial planner

So it’s time to take the plunge.

Get the SFI report today on a $1 trial.

The SFI Report

The SFI Report

A monthly stock market investing report, to help you invest better and become financially free.

  • Build wealth through value investing
  • Adapt to changes in the market type from bull to bear
  • Save time in research and planning
  • Save money in fees
  • Comes with built-in position sizing and exit rules
  • Gain an edge over the markets
  • Be prepared to capitalise upon once-in-a-decade opportunities for spectacular profit
  • Beautifully simple and easy to get started
  • Sign Up for a $1 Trial

    60-Day Risk-Free Money Back Guarantee

Performance you can trust.

Here a selection of our results from the past year

Apollo Group +41% (Closed Profit)

IG Group +20% (Closed Profit)

Sage Group + 17% (Closed Profit)

Eli Lilly + 44% (Open Profit)

Rand Mining +166% (Open Profit)

Past performance is not necessarily indicative of future performance.

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This website is owned and operated by SpoonFed Investor Pty Ltd (ABN 80 163 947 813). In order to legally and responsibly provide general advice, SpoonFed Investor Pty Ltd is a corporate authorised representative of FX Renew Pty Ltd (AFSL) 455388. Any advice included in this website or correspondence is general advice only and is based solely on consideration of the investment or trading merits of the financial products alone, without taking into account the investment objectives, financial situation or particular needs (i.e. financial circumstances) of any particular person.

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