The previous two months have been one of the busiest on record, with us selling holdings that had reached close to their fair values, and switching out to companies which were far more attractively priced.
The upcoming 2016 will be an exciting one. We have one last interview with a well known fund manager based in Singapore that will be released shortly (as time permits!) this month.
An exciting partnership is also in the works, and more details will be disclosed soon.
Clint Carlson's Carlson Capital Double Black Diamond fund returned 3.34% in August net of fees. Following this performance, the fund is up 8.82% year-to-date net, according to a copy of the firm's August investor update, which ValueWalk has been able to review. On a gross basis, the Double Black Diamond fund added 4.55% in August Read More
One new segment of the site will be journal entries which are curated from my own investment records. They will normally be embargoed for anywhere up to 2 months before I release them on the site.
The plan is that they will give some time for us to digest the events of that day in a more objective manner. The content has been preserved as it was written, and only some minor editing will be planned to correct any grammatical errors.
Investment Journal Entry Dated 26/12/2015
It’s Christmas Eve and I find myself reminiscing about the current state of affairs. It’s been almost six years since I started investing. How time flies!
I am grateful that I had a good start getting a solid foundation. Unwittingly, I started at a great time, and mistakes have been kept to a minimum by following some basic principles that I have never deviated from:
- Focusing on the ability of a business to generate sustained free cash flow
- Conservative balance sheets and management
- The alignment of interests between management and shareholders
There is I think a distinction to be made from the success of a business, and the success of minority investors. Many great businesses have turned out to be terrible investments. Likewise, distressed businesses can turn out to be great investments – albeit at the right price.
The key in my view, is to be selective.
Our small size allows us an invest-able universe of over ten thousand stocks. As Richard Branson said, business opportunities are like buses, there is always another one around the corner.
Acting in such a manner requires a calculated emotional detachment from it. At every point of time, emotions threaten to overwhelm our logic and reasoning. Knowing what to do does not mean one can do it when the time comes.
Investment opportunities are most abundant in stocks which investors are the most emotional, and have strong vested views in.
Take for example the rise and fall of SingPost this past 5 years. It’s share price had declined from $1.20 to close $1.00, before advancing to an all time high of $2.12.
Sentiment turned negative upon learning that the CEO spearheading its transformation had left, and of corporate governance problems, leading a decline back down to $1.60.
One must express great scepticism that the share price accurately reflects the business reality, as the core business of the company – a monopoly on delivering mail in Singapore has not been eroded.
These mis-pricings create an opportunity for investors to profit – if we can remain rational and cool headed.
Such opportunities are rare, and we must remain selective in our criteria.