About

Labutes Investment Research create Equity Long /Short trading ideas, with the goal to achieve positive investment returns during any type of market environment. All trading ideas are supported by fundamental analysis and valuation, with a medium to long-term view.

I’m a Financial Analyst based in Portugal, working on financial markets since 2006 as a generalist buy-side equity analyst. I also have some experience with derivatives and fixed income. I’ve worked for two years at a Portuguese bank and currently work for an insurance company, working for proprietary trading/investments office on both cases. I’m graduate in Economics, have a Master in Finance and I’m studying to become a CFA charterholder.

I developed this blog due to my passion to equities research with the goal of  enhancing my investment research and analysis skills. I believe by writing regularly I can fulfill these goals and hopefully also the trading ideas returns.

I think that it’s extremely difficult over the long-haul, by only assuming an expected rise on stocks prices (long position), to consistently achieve positive returns investing in stocks. During bear markets, good and bad companies see their shares prices fall and you, as an investor, also see your portfolio value decline. Given this, Equity Long/Short is my prefered investment strategy. Most probably,during bull markets this strategy will underperform markets’ returns, but the goal is to achieve positive (or absolute) returns during any type of market environment! Equally important is portfolio risk reduction (measured by the standard deviation of returns) that should be significantly lower than of markets’ volatility.

Long/Short Equity is an active investment strategy that balances long positions in high expected return stocks and short positions in low expected return stocks. These stocks should share some basic characteristics such as sector, country, business model, products, etc, in order to isolate fundamental factors and reduce, or eliminate, market/sector risk. This type of investment strategy is immunized against changes in the value of the underlying market. If selected securities perform as expected, the long-short positions will provide a positive return, whether the market rises or falls. That mean it’s possible to produce positive returns even if both stocks share price went down (if the stock you had a short position falls more than the long position).

Most of my trading ideas are based on relative value, but in some cases can be long – only. On relative value, trading ideas also include sectors or markets indexes. My focus is on European stocks but I intend to widen analysis into other markets over time.

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