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07-08-2014, 12:10 AM
Wahkao, your reputation precedes you. So you have to live by the posts you made.
In any case, I don't have all the answers. For myself, I do second level thinking. I question the assumptions I make. I'm more interested in risks than returns - specifically how a stock is right for myself. (A good business may not be a good investment.)
Take one of your examples:
"SMRT is a monopoly company. Their business is assured. No competitor at all. Its a good stock to buy"
My questions:
- is smrt in the right industry? How is the industry faring globally and locally?
- are there regulatory that prevent economic moat?
- is the industry fitting into my investment portfolio?
- are there trends that impact the business adversely? Eg labor cost increasing
- how has the management fared over the past 5-10 years?
- am I in contact with an employee from smrt? What is his view on his company?
- am I able to observe their efficiency in deploying capital?
- have I understood their financial report, specifically how money is used and earned? (For this, I suggest you read japanfood latest annual report. It is easy to understand their business and link the flow of finances and how they run their business)
- does the growth of the company match my portfolio objectives? Is it a short term high growth or long term sustainable business?
- is smrt business really assured? Are there any shock events that may decrease singapore population?
Too many points to make - and I believe this is the challenge of a retail investor. Analyzing business cannot be a textbook case, but more on a consulting research study.
Be thorough enough, make sure you are very comfortable with all the issues u can think of, and buy with a certain level of margin of safety.
Hope this helps.
In any case, I don't have all the answers. For myself, I do second level thinking. I question the assumptions I make. I'm more interested in risks than returns - specifically how a stock is right for myself. (A good business may not be a good investment.)
Take one of your examples:
"SMRT is a monopoly company. Their business is assured. No competitor at all. Its a good stock to buy"
My questions:
- is smrt in the right industry? How is the industry faring globally and locally?
- are there regulatory that prevent economic moat?
- is the industry fitting into my investment portfolio?
- are there trends that impact the business adversely? Eg labor cost increasing
- how has the management fared over the past 5-10 years?
- am I in contact with an employee from smrt? What is his view on his company?
- am I able to observe their efficiency in deploying capital?
- have I understood their financial report, specifically how money is used and earned? (For this, I suggest you read japanfood latest annual report. It is easy to understand their business and link the flow of finances and how they run their business)
- does the growth of the company match my portfolio objectives? Is it a short term high growth or long term sustainable business?
- is smrt business really assured? Are there any shock events that may decrease singapore population?
Too many points to make - and I believe this is the challenge of a retail investor. Analyzing business cannot be a textbook case, but more on a consulting research study.
Be thorough enough, make sure you are very comfortable with all the issues u can think of, and buy with a certain level of margin of safety.
Hope this helps.