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Take 5 with Lyn Alden

Lyn Alden has a unique investment approach. She focuses on long-term fundamental equity investing, but takes a contrarian stance to finding quality, undervalued stocks.

Alden’s background in engineering and finance, and how she applies that methodical thought process to her investment approach, is what gives the investor her edge. 

 

1: What is the top mistake that investors make?

Buying and selling emotionally.

 

2: Who or where do you go to for investment or economic insights?

I have a wide network of information sources. Years ago, it used to be that having information was the advantage. Whereas now, there’s so much information that we need to synthesise it.

I have a select group of specialists that I listen to, but it depends on what your overall goals are. If you’re a generalist investor, you want to find specialists in different fields.

“By picking people who are experts in their fields and using them as filters, you can extend your reach in terms of things you could pay attention to without trying to be an expert in everything. That’s how I’ve approached it”

 

By picking people who are experts in their fields and using them as filters, you can extend your reach in terms of things you could pay attention to without trying to be an expert in everything. That’s how I’ve approached it.

 

3: What’s the most memorable moment from your career so far?

The launching of my flagship research service, just because it did so well. It did better than I thought it would and so I was happy to see that people found it valuable.

 

4: What top tip would you give to your younger self?

I would say to be flexible. If I could go back, I would have been a little bit more flexible with some of those fast-growing companies to see the forest through the trees.

 

5: If you were to narrow it down to one thing, what do you think your biggest source of alpha is?

A long-term view. The market is so short-term focused because many of its participants are getting judged on a monthly or quarterly basis. If you had the luxury to say, “I have no idea what’s going to happen to this investment in the next six months, but I have a high conviction that it’s going to outperform over the next three to five years” — that’s where I think one of the past few places of alpha is. The algorithms have taken out so much short-term alpha that the longer-term focus is really where there’s still some edge to be had. The second one would be diversification.

“If you can combine an equity focus with a multi-jurisdictional approach, that’s where you can still find something that clearly has a better risk-reward potential, simply because it’s not on a lot of peoples’ radars”

 

If you can combine an equity focus with a multi-jurisdictional approach, that’s where you can still find something that clearly has a better risk-reward potential, simply because it’s not on a lot of peoples’ radars.

 

This article was originally published in our Opto Magazine. You can purchase your copy via our Opto Shop.

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