16-10-2012, 09:27 AM
I thought it appropriate to bring this up - how would forumers here define their circle of competence with respect to investing knowledge? For example, which industries or sectors are you knowledgeable about and comfortable with investing in? How have you managed to get so much information about the sector in order to feel "competent"?
Also, any suggestions on how to expand this circle of competence (as it is not supposed to be static) and branch out into other industries?
Let me start off, I am comfortable with the following:-
1) Oil and Gas (through Ezra and Swiber previous investments, though I won't put money in these companies now except for MTQ)
2) MRO segment (due to reading/studying SIA Engineering)
3) Services Segment (i.e. Interiors, Events Management) - understanding the business model of Kingsmen Creatives
4) Real Estate Segment - read up a lot about it and tracking local news about property measures, though I am not comfortable at this point to put money in developers or holders of investment property.
Some segments I cannot get a hang of:-
1) Retail operations - too fragmented and fast-moving
2) Fabric Manufacturers - Unless I see the ops myself, it's hard to understand the business
3) Telcos - Too much jargon!
4) Tech companies - includes those like Aztech, Neratel which involves tech (I am lousy at tech)
5) Luxury Goods Segment - Don't understand the drivers behind it as I am a frugal guy - understanding the mindset is admittedly tough
6) Commodities companies - Noble, Olam and Wilmar are beyond me. How they can survive on RMI, huge leverage, thin margins and negative FCF is a conundrum to me.
As for how I am expanding my circle, by reading and understanding. Currently I am working to understand retail and luxury goods better, as well as the fast moving consumer goods market.
Welcome more contributions to this thread!
Also, any suggestions on how to expand this circle of competence (as it is not supposed to be static) and branch out into other industries?
Let me start off, I am comfortable with the following:-
1) Oil and Gas (through Ezra and Swiber previous investments, though I won't put money in these companies now except for MTQ)
2) MRO segment (due to reading/studying SIA Engineering)
3) Services Segment (i.e. Interiors, Events Management) - understanding the business model of Kingsmen Creatives
4) Real Estate Segment - read up a lot about it and tracking local news about property measures, though I am not comfortable at this point to put money in developers or holders of investment property.
Some segments I cannot get a hang of:-
1) Retail operations - too fragmented and fast-moving
2) Fabric Manufacturers - Unless I see the ops myself, it's hard to understand the business
3) Telcos - Too much jargon!
4) Tech companies - includes those like Aztech, Neratel which involves tech (I am lousy at tech)
5) Luxury Goods Segment - Don't understand the drivers behind it as I am a frugal guy - understanding the mindset is admittedly tough
6) Commodities companies - Noble, Olam and Wilmar are beyond me. How they can survive on RMI, huge leverage, thin margins and negative FCF is a conundrum to me.
As for how I am expanding my circle, by reading and understanding. Currently I am working to understand retail and luxury goods better, as well as the fast moving consumer goods market.
Welcome more contributions to this thread!