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16-11-2010, 01:13 PM
(This post was last modified: 18-11-2010, 06:41 PM by Musicwhiz.)
Has anyone here encountered that sometimes you lose touch with the principles of value investing? Sometimes when you are so busy and don't analyse companies every few months, you forget the criterias to look out for and most importantly why you look out for them.
Personally, since Aug to Oct, I didn't analyse companies since I was busy with stuff. Then, when I was analysing a new company, I kind of forgot what to look out for (eg. consistently increasing revenues, profits, FCF, etc) and most importantly, why I need to look out for them (eg. good financial numbers and good margins can mean the company has got a wide moat).
How many of you have experienced this and what do you do to counter this? For me, I keep a blog to pen my journey and read my past entries every once in a while to keep my mind refreshed. I also read more value investing books to refresh even though most books talk about the same stuff (in a way repetition is good as it serves as refreshment). Also, when reading value investing books, it's good to have a "beginner's mind" to prevent us from having overconfidence and feel that I already know all these stuff and I don't need them anymore.
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I have a checklist with everything.......so i just work through it.....
Kinda like a template..........
Blogs are too bulky......
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(16-11-2010, 01:13 PM)taka666 Wrote: Has anyone here encountered that sometimes you lose touch with the principles of value investing? Sometimes when you are so busy and don't analyse companies every few months, you forget the criterias to look out for and most importantly why you look out for them.
Well to be honest it does not happen to me, though I do continually refresh myself on the principles now and then. My blog is more for charting my investment mindset and journey as I learn more on Value Investing, and also, of course, to document my mistakes.
Even when I am very busy, I usually take some time to review results of other listed companies to find out what makes them tick, or what makes them falter. It's good practice and I recommend it. 
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Quote:Even when I am very busy, I usually take some time to review results of other listed companies to find out what makes them tick, or what makes them falter. It's good practice and I recommend it.
I think I should start doing this. Allows me to learn about the wrong things about a company and industry.
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16-11-2010, 11:45 PM
(This post was last modified: 16-11-2010, 11:45 PM by Nick.)
Generally, I try my best to read a few financial statements of different companies listed in SGX daily to learn about the different type of businesses and at the same time uncover any potential gems out there. Sometimes a really attractive company may just be hiding somewhere haha !
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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(16-11-2010, 11:45 PM)Nick Wrote: Generally, I try my best to read a few financial statements of different companies listed in SGX daily to learn about the different type of businesses and at the same time uncover any potential gems out there. Sometimes a really attractive company may just be hiding somewhere haha !
This is a very good way to start and learn as you go along! However, that said, I think this type of screening should merely be the prelude for more detailed research once we identify a company which has the essential elements for investment.
Granted, this takes time and considerable effort. But then again, who said making money consistently was easy? 
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(16-11-2010, 05:08 PM)Musicwhiz Wrote: (16-11-2010, 01:13 PM)taka666 Wrote: Has anyone here encountered that sometimes you lose touch with the principles of value investing? Sometimes when you are so busy and don't analyse companies every few months, you forget the criterias to look out for and most importantly why you look out for them.
Well to be honest it does not happen to me, though I do continually refresh myself on the principles now and then. My blog is more for charting my investment mindset and journey as I learn more on Value Investing, and also, of course, to document my mistakes.
Even when I am very busy, I usually take some time to review results of other listed companies to find out what makes them tick, or what makes them falter. It's good practice and I recommend it.
You are to the extreme and have very good financial discipline which even myself can't do it, primarily I have to allocate time for my career coaching with my clientele as well
---> To answer that question, yes sometimes I will forget those principles. Yes, I like buying companies with deep value. Value on economic moat, growth prospects, clear strategic competitiveness and strong quantitative aspects.
However in application wise and real time, sometimes I might tend to suay on the opposite view. Someone did remind me of "money in pocket" theory. If I see a company which has a chance to appreciate in future and represents the "face" of an industry yet is in the red due to poor financials - plus Mr. Market is not pricing it well, I will still buy that counter. In other words, industry trend-riding. Not by charts but by the overall industry cycle. Of course not foolproof analysis; however as a benchmark estimate to plot the rebound.
Think MW knows which counter I referring to hehee....
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