Bitesize: Creating a Winning Investment Strategy with Angie Ellis

Alec: [00:00:06] Welcome to bitesize on Get Started Investing. In this series we feature some of our favourite lessons, quotes and moments from the podcast. If you'd like to listen to the full episode, we've included the link in the shownotes. So from that first investment in MYOB to now, have you developed a personal investing philosophy? 

Angie: [00:00:27] I would say I'm definitely a growth investor. I definitely look for that strong earnings growth like MYOB was going through at the time where, you know, my you know, my phone was ringing off the hook with people trying to book training. It was just, you know, couldn't keep up with the sales, you know, that sort of business. I definitely focussed on those sorts of businesses that got really strong tailwinds, pushing the demand for the product. So yeah, I would definitely say that's part of my philosophy of focussing on these small, young companies. They're not always profitable, but they've got a good profit margin and they're really scalable. 

Bryce: [00:01:03] So you are now a private investor running 8020 investments. What's been your journey to this point? And I guess, do you have any formal training? Because a lot of people, I think, in the community would probably think that you need to go to uni and all this sort of stuff to become a private investor. But is that the case with you? 

Angie: [00:01:21] Well, I did go to uni. I started off with Commerce, the great Melbourne, but I very quickly sort of put that on hold because I got a full time job as an accountant, like as a junior accountant when I finished school. So I did an accounting degree at night time. So I used to go like 6 to 10 every night off to Monash Uni in Caulfield and do this accounting degree. So I'm a CPA, but I just don't do accounting work these days. And so when I finished that degree, that's when I started my own little business. So I think that the training that I got doing the degree was great because I learnt all about marketing and brain development, so it does help me to assess these fun, high flying companies. 

Alec: [00:02:02] So as I said in the intro, you've been a prolific winner of the Fairfax share tipping competition four or five times. You've taken out the prise, so you must be doing something right. And we would love to, I guess, unpack your process and learn from what you're doing. So maybe let's start at the beginning and I guess an area where a lot of people in the Equity Mates community I guess have a lot of questions and really want to get more information, which is actually the process of finding companies and generating investment ideas that are really the top of the funnel there. So if we start there, how will I guess, where do you generate most of your investment ideas from? 

Angie: [00:02:48] That's a great question. So I had two systems for generating these ideas. The first system is very much that I learnt from being in the space race because like I was saying initially, I would pick fairly boring companies, you know, put CSL in there or Wesfarmers or something and I just wasn't winning at the start. And so then that's when I started to really make myself a little system. I had a little algorithm that I wrote that was really scanning the whole market for these up trending stocks. So that's the sort of half my portfolio I run on that system and then the other half I'll, I'll talk about later, which is sort of more sort of longer term holdings. But this sort of based on why I do it, where I have this little algorithm that I run, I wrote about five years ago where I look at these strong volume stocks, they've got to be up trending. They definitely are up in the last few days and are definitely up in the last week and I run across those stocks and might generate a list of about 20 or 30 stocks and then I look through that. So this is the process I would do for the shares, right? And I do it for my own hustle. That portfolio is I want to say that there's lots of news flow about the stock, like what's going on with it, why is it taking off like this? And I might say that it had lots of articles written. It's really talked about on Twitter. There's lots going on. There's lots of drilling results, say or it's, you know, a green space like lithium. It's green lithium space and it's been talked about at the moment. So definitely something like that where it's going to have a bit of a run for a while. So I get a lot of great ideas from that. 

Bryce: [00:04:33] So just to unpack that a little bit, what you're saying is you apply and this is just for, I guess, the newer investors in in the audience, you'll run like a screen or a filter through one of the, I guess, online tools available where you're filtering for stocks that have a lot of volume or a lot of sort of buy orders coming into them over a particular period of time. And then you'll kind of align with, I guess, the macro view or some sort of, you know, whatever is going on and then. News.

Angie: [00:05:06] Yeah. Yeah, exactly. Exactly right. And I'll look at why it's having this run and make sure that it's real and it's going to sustain that run. Like I might say that some good fund managers have bought into it and that's generating a bit of news as well. So yeah, definitely. And it throws up some really quirky stocks. We're running scans across the whole market like that. I've run across 2200 stocks on the ASX and they saw this year's rise. They had to be over $0.05. So I still do that in my portfolio. I'll, I'll put the scan scanners greater than $0.05 and I'll, I'll make sure that that uptrend is a bit of a smooth. I've got a filter that looks for a smooth uptrend. Yeah. And I find fund stocks that I wouldn't have picked before.

Bryce: [00:05:51] If you enjoyed that bite size, you'll find a link to the full episode in the show notes.