What is The Ethical Entrepreneur?

The Ethical Entrepreneur originally began as a blog I ran alongside my personal consulting brand, Viola Enterprises. Early content focused on various aspects of business and personal finance but in 2019 I began to focus more on my approach to investing – sharing both my personal approach and exploring that of others.

I’ve been fortunate enough to meet dozens of private investors – some are High Net Worth Individuals that manage tens of millions in assets, others are just starting out with a few thousand pounds. I’ve learnt so much from these relationships I wanted to give something back to the investing community and share some of the investing experiences I have on a daily basis.

As such, this site is a sort of ‘diary’ that readers can dip in and out of to learn about how I manage my money and investment portfolios. You’ll find my take on various elements of investing such as my approach to portfolio management, risk management, psychology, stock selection and company analysis.

I’m not particularly keen on turning into an amateur ‘tipster’, so if you’re waiting for a stream of consciousness on what I think The Next Hot Pick will be, then you’ll be waiting a very long time.

I’m also a huge fan of Twitter (you can follow me @HTViola) but I find the format too limiting for anything beyond short-form commentary. As a copywriter, I naturally prefer longer content and it seemed a bit disingenuous to preach one thing at my employer whilst doing another myself!

I should also point out that I’m not a professionally qualified investor, so please don’t take anything on this site as ‘gospel’. Always do your own research and think critically about what you’re doing before taking action on your finances. If you’re ever not sure or comfortable about something; don’t do it!

My Investing Goals

I originally began investing in 2012 with a tiny sum of money and compared to today had an extremely limited understanding of what I was doing. I had a basic strategy to ‘buy good businesses’ and that was about as far as it went. Over time, I managed to grow my portfolio but it certainly hasn’t been smooth sailing. I began investing a few years after the Great Financial Crash of 2007/08 but I’ve been investing through the Brexit Saga (hard to believe it started in 2015), the rise (and fall) of Jeremy Corbyn, the disastrous Teresa May years and as I sit writing this in 2020, we’re six months into a global pandemic, the likes of which no one in living memory has any experience of.

Today, my strategy is far more refined and nuanced – once you’ve finished here, I can recommend checking it out here.

I aim to make 10% to 15% a year through a combination of capital gains and income. I’m extremely keen to avoid losing capital (aren’t we all?) but in practice this means I rarely book underwater trades unless I believe the company is 1) in serious risk of further declines or 2) unlikely to reverse course over the long-term.

I should reiterate that I am in no way touting myself as The Next Warren Buffett. There are hundreds of public investors with amazing track records and fantastic analytical skills that far outclass me today, and probably always will. Having said that, I also think I know a thing or two about investing – I’ve been successfully running a portfolio since early 2012 and have learnt a terrific amount both about the markets and my own psychology that have allowed me to develop a reliable strategy that performs well both in bull and bear markets.

Hopefully, you’ll find the contents of this site a good starting point to help you develop an investing philosophy. I’m a big believer that this is a process which takes patience and a willingness to accept failure at times (hopefully not too much!), and this site is designed to encourage and inspire those virtues.

Other Channels

Friends and family will be quick to tell you that I am not always an easy man to contact. I believe in moderation in all things – too much work and a man is sure to lose their friends and family. Too much play and a man’s work is sure to fail. This usually means I’ve got a rather hectic calendar (up a 6am and lots of travelling to see friends and family at the weekends).

As such, a bit of persistence is often key if you need to get hold of me. I’m contactable via Twitter (@HTViola), this website, and can usually be ‘dragged’ down to a local watering hole for a swift pint or two (or fish and chips!).

I try to publish content on the site regularly but this is usually a more hit and miss affair due to other commitments. For easier to digest content, I recommend following me on Twitter where I can usually be found firing out stock and market commentary, thoughts on investing and economics, and the occasional photograph of my weekend adventures with friends and family.

I go through periods of tweeting but generally seek to engage with other accounts rather than spewing a constant stream of ‘thoughts’.

My Investment Style

I am a ‘buy and hold’ investor who prioritises income and quality over short-term pricing opportunities. My portfolio comprises investments in a range of opportunities – the majority of which I seek to hold for 3-5 years, with a small ‘core’ holding for 10+ years and another small chunk of capital deployed for more opportunistic ‘trades’ (1-2 years or less).

I have a strong preference for shares that pay income (other than private placements, all my investments pay a dividend) as well as shares that have high ‘quality’ metrics including Return on Equity, Return on Capital and Profitability. I keep a close eye on the Price to Equity ratio of my companies (preferring single digits or low double digits and starting to get a bit jumpy at 20 or over) as well as the dividend yield (4-5% is my target for new investments but I occasionally dip lower than this).

I’m not at all bothered about market capitalisation – a friend of mine will often balk at small or micro caps, but I consider them an acceptable investment due to growth potential (if well run!). I’ll always look for quality and never more-so than in small caps as the potential for buying a car crash stock seems to hold an inverse relationship to a company’s size.

I also hate the use of leverage and debt – both personally and in the companies I invest in. I much prefer a good cash float and will occasionally support the sensible use of debt but companies that persistently need to borrow more and more to keep operating are just delaying the inevitable.

I’m an avid reader and find great inspiration in learning from the Greats such as Warren Buffet, Charlie Munger, and Ray Dalio – I’ll cover these in more detail throughout the blog but suffice it to say that I consider myself truly fortunately to have the ability to access their wisdom through books and podcasts and take every opportunity I can do to so!

Ultimately, I also try to avoid doing too much with my investments. So many people slice and dice their portfolios every month and I can absolutely see the attraction of this (in a totally non-sarcastic way, the urge to buy and sell is very real!). This is partly why I keep a bit of my portfolio available for ‘short-term’ trading (note, not Day Trading which I have a real aversion to). The ability to ‘trade’ a bit of capital helps to satiate my enjoyment in engaging with the markets without risking the long-term potential of my overall portfolio.

My thinking behind this is quite simple; if I can successfully identify the top 5-10% of companies in the market and invest in them, why would I ever want to change them? The only reason I can think of that makes any sense is if those same companies were overtaken by competitors in terms of prospects or suffered mismanagement that permanently impacted their ability to lead the market. Holding these companies is where the long-term profits are to be made rather than constantly churning a portfolio to eke out profits from short-term price movements.

What Next?

If you’re still with me, I can recommend checking out my Investment Principles page which contains a number of ‘core’ articles I’ve written on different aspects of investing. Be sure to add me on Twitter and if there’s something you’re particularly interested in, drop me a message and I’ll be glad to help!