Key to Value Investing: Ignoring Market Noise and Reflecting

Key to Value Investing: Ignoring Market Noise and Reflecting

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I arrived at Yellowstone National Park, United States yesterday and took this amazing shot today.

Yellowstone National Park

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global investment 1666792701Electron Capital returned 3.1% for October, bringing its year-to-date return to 8.3%. The MSCI ACWI gained 6% for October, raising its year-to-date return to -22.3%, while the S&P 500 returned 8% in October for a year-to-date loss of 18.8%. The MSCI World Utilities Index was up 2.7% for October but remains down 13.5% year to Read More

Living in a lodge amidst all this nature, it offers a sense of quietness that I find beneficial to value investing. Given the advancement of technology, we are constantly connected to the constant flow of financial news and information where it reaches a point that it becomes noise. This definitely can be seen in recent markets where it becomes a little crazy with indexes fluctuating approximately 2% each day.

Perhaps given how busy I have been over the last month setting up the new company (more on that later) and meeting investors just for chats, I have not been able to introspect. Hence, being here offers a respite from all that. With regards to value investing I find being able to find some peace and reflect on past mistakes or investment decisions crucial to the learning process. How many a times have we actually reflected back on our past investment mistakes? Reviewing our portfolio, analysing each individual stock with respect to our initial investment thesis and discussing why it has gone down has always been a crucial process for us.

Since inception in 2012 till the first half of 2015, we have achieved a cumulative return of 55.2%. This compares favourably with the STI and Vanguard FTSE Pacific index, which achieved a cumulative return of 24.2% and 25.8% respectively. That would mean an initial investment of $10,000 would have yielded $15,518 by the end of July 2015. While there is much to be improved, we are still satisfied with our performance. However, we have decided to move on to the next stage and have decided to set up a private family office to manage our investments.

Our investment mandate is still the same where we only look for opportunities within the Asian markets – Singapore, Hong Kong, Japan and South Korea. While we are not restricted to these 4 countries, we believe that for now these are the few Asian markets that offers the best risk reward ratios. To end it off, as we shift to managing this company, we will no longer be able to provide readers with portfolio updates. There is little upside to revealing our investments in specific, publicly traded companies. On the contrary, there is significant downside in telegraphing our methods and trade secrets that will ultimately hamper our ability to act discretely and quickly. Hence, we will thus refrain from discussing specific investment ideas outside of regulatory requirements.

However, we will still share our audited results where we talk about case studies that we deem beneficial to the learning of our readers. Asides from that, our blog will still be active in sharing our investment 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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