Education of an Investor

Education of an Investor
The Great Minds of Investing

Investing is a long, if not endless, journey of learning. Confusion and uncertainty is part of the deal. To provide illumination for fellow learners of the trade, I believe the education of an investor can be segregated into 3 different phases.

Phase One – Starting Out Lost and Being a Generalist

You are clueless and the learning curve is steep if you don’t have any foundational knowledge of finance. The first step is usually the most difficult, because of how intimidating the learning curve can be. Read widely across different platforms (books, blogs and forums) with a leaning towards the different styles of investments. A more palatable way would be to read about prominent investors and their respective styles. You are a generalist and up till now, your skin-deep knowledge can only be held as coffee shop talk. When you are ready to dive deeper into a particular style, your journey as a serious investor begins.

Phase Two – Clarity and Specialisation

You know what you want to be and it’s time to channel all your efforts in that pursuit. You no longer feel lost, but neither are you knowledgeable. The challenge in this phase is in picking up technical and specialised knowledge which can be difficult to understand at times. Forming and solidifying your investment philosophy usually comes in this phase. Naturally, you will experience a lot of uncertainty in applying these concepts. You will be short of confidence and have plenty of questions, many of which for reaffirmation purposes. A proper avenue for clarification will help immensely.

Klarman: Baupost’s Core Principles Have Helped The Fund Outperform

Seth KlarmanWhen Baupost, the $30 billion Boston-based hedge fund now managed by Seth Klarman, was founded in 1982, it was launched with a core set of aims. Q4 2021 hedge fund letters, conferences and more Established by Harvard professor William Poorvu and a group of four other founding families, including Klarman, the group aimed to compound Read More

Phase Three – Assimilating Perspectives

At this point, you have all the technical jargons and information at your fingertips. However, the interpretation and perspective of a certain set of information will often cause you to stumble in your decision making. You realise that every situation is different and requires its own set of critical evaluation. Two people may make two opposing, yet equally logical arguments, but only one of them can be right. Likewise, two different methodologies may both seem logical, but the results are vastly different. You are forced to reconcile such differences and perspectives into the investment framework that you have built. It is part of the beauty of investing and it is why investing is said to be an endless journey.

I developed my passion for investment management especially equity research at a relatively young age. My investment journey began when I was 20, at a point in time where markets were still recovering from the Global Financial Crisis. My portfolio started from money I saved over the past years and through working during the holidays. I was fortunate to have a good friend with common investing mentality to began my journey towards value investing. To date, we still research and invest in companies together, discussing valuations and potential risks of a company. To date, I manage a fund with a value investing style. Positions are decided upon via a bottom-up approach or smart speculation (a term I came up with when buying a stock for quick profit due to a mismatch in prices in the market due to takeovers/selling of a subsidiary or associate). Apart from managing my own portfolio, I enjoy sharing my research with family and friends, seeking their opinions and views towards the stock. Reading Economics in London, I constantly keep up with the financial news in Singapore & Hong Kong. Despite my busy schedule, it has not stopped me from enjoying other aspects of life. I enjoy a variety of activities in whatever free time I may have – endurance running, marathons, traveling, fine dining, whiskey appreciation, fashion. Lastly, I enjoy meeting new people, discussing ideas and gaining new perspectives towards issues in the world.
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