Why I Decided to Create My Own Investment Blog

I have been doing investing myself since year 2000 when I was still a student studying in National University of Singapore. There have been many moments of losses mixed with moments of gain. I have witnessed the panic selling after 9/11, as well as how the SARS impacted Singapore's economy. Most importantly, I have appreciated the complexities and entanglements between a rational mind and human emotions, and the impact it has on making investment decisions

My Gains and Losses: Graduating from the School of Value Investing
My losses are like 'school fees' paid for lifelong lessons in investment and valuing businesses. The point of 'graduation' came last year when I felt I have acquired immense confidence to apply value investing principles with a significant level of success, and it occurred to me on the importance of crystallizing the principles and paradigms of thought in a clear and explicit manner in the form of articles.

The Purpose of this Blog
This blog articulates my framework of investing and freely shares with all readers my investment knowledge. For non-starters, this blog will equip them with the basic knowledge on how they can take on investing by themselves. In addition, there will be specific references and sharings of analysis of a few companies.

I have gained immensely from the wisdom of the forefathers of value investing, and I hope you will be able to learn as much from what I have to share. Watch me as I rigorously apply the principles of value investing and achieve annual returns that consistently outperform the market and exceed the performance of the professional fund managers

Recommended Resources for Value Investing

I would say that my investment philosophy started with just bumping around and mindless dabbling. It was over time that as I read and studied that things became clearer and an investment ideology emerges. Below are some resources that I accumulated over the years. 

*1. What is Value Investing? by Lawrence A. Cunningham
- Good introduction to investing in general, and why the philosophy of value investing dominates

*2. The Essential Buffett by Robert G. Hagstroms
- Details on the science and art of the investing methodology behind the world's most successful investor Warren Buffett
- A must read if you buy into the philosophy of Value Investing

*3. Common Stocks and Uncommon Profits by Philip A. Fisher
- A classic on investing that brings new dimensions and perspectives to value investing

*4. The Interpretation of Financial Statements by Benjamin Graham
- A starter's guide, and a classic, to reading financial statements written in plain English

*5. The Intelligent Investor by Benjamin Graham (dry read, but certain chapters explain key concepts and must be read)
- Ben Graham is the mentor of Warren Buffett, this is the must read for any investor

*6. Essays of Warren Buffett: Lessons for investors and managers by Lawrence A. Cunningham
- A compilation into themes of all the letters written by Warren Buffett
- Alternatively, can find all the letters at berkshirehathaway.com

*7. Sun Tzu on Investing by Curtis J. Montgomery
- Curtis is a Singapore investor with a website at wallstraits.com
- Good read to draw a few pointers from Sun Tzu

The below reads are for you to expand horizons.

7. Security Analysis by Benjamin Graham (for reference only, and advanced reading. Very DRY)
- An intense text on how to quantitatively analyse stocks

8. Buffett: The Making of an American Capitalist by Roger Lowenstein (recommended for leisure reading)
- Good biography on how Warren Buffett came to be. With the mistakes and lessons he has learnt over the years

9. The Starbucks Experience: 5 principles for turning the ordinary into extraordinary by Joseph Michelli
- Recommended leisure read to expand horizons
- Good to know how Starbucks evolved from a small time business to a world enterprise

10. Built to Last: Successful habits of visionary companies by Jim Collins (recommended for lateral knowledge)
- Not exactly investing, but explains to you why world's greatest companies come to be and can last beyond 100 years
- Excellent read to expand horizons, and definitely help for investment purposes

11. Good to Great by Jim Collins (recommended for lateral knowledge)
- Not exactly investing either, introduces you to what companies and businesses are on their way to greatness

Websites to Visit

www.Wallstraits.com
- Value Investing website of Curtis J. Montgomery.
- Interesting articles on investing

www.sgx.com
- Singapore Exchange website with all the listed company information
- Includes annual reports, up-to-date business announcements

Business Grapevines - Places to fish for information

Channelnewsasia.com Forum "Market Talk"
- Mostly rubbish. But sifting through with patience will sometimes reveal posts on hidden gems.

Sharejunction.com & shareinvestor.com Forums
- Mostly rubbish posts too. But think of it as a source and tipoff

Wallstraits.com Forums
- Excellent sharing forum. Best place to sift for bargain hunters
Online Brokerages

I would recommend POEMS as a start www.poems.com
- Good tool that research and compile all listed companies info for last 5 years

Second & Third Level of Stock Screening

The Second Level of Business Analysis

The second level of business analysis adopts a different approach. It requires the investor to have a much deeper understanding of the people and the processes of the company through unusual means of obtaining information.

The four aspects we are interested in here:

1. Marketing strength
2. Sales ability
3. Research & Development capabilities
4. People factor

1. Is the company a strong marketing organization?
2. Is the company an above average sales organization?
3. Does the company have outstanding labour and executive relations?
4. For consumer franchises, are the storefronts consistently packed?
5. For production companies, are the book orders filled for next few years?
6. Does the company have depth in the management?
7. How effective are the company’s research and development efforts in relation to its size?
- Quality of research personnel

Reference text:
- Common stocks and uncommon profits by Philip Fisher
- The Essays of Warren Buffett by Larry Cunningham

The Third Level of Business Analysis

The third level of business analysis base its principles of analysis on a few concepts empirically distilled by Jim Collins in his book "Built to Last". The investor seeks to determine if the company can become larger than life and enter the likes of HP, 3M, P&G, General Electric, Ford, etc. This is much more demanding approach and requires the investor to have a very intimate understanding of the company from ground-up and top-down.

1. Does the company pursue a purpose that is greater than profits?
2. Does the company preserve a set of core principles and ideology, but also actively stimulate progress?
3. Does the company have audacious and stretched goals?
4. Does the company possess a cult-like culture?
5. Does the company develop its top management from internally?

Reference text:
- Built to Last by Jim Collins
- Good to Great by Jim Collins