Wednesday, June 28, 2017

An Interview With "Simple Investor SG"

For this month interview, I will be interviewing "Simple Investor".

He is the owner of the Simple Investor SG website, which provides the "Full Analysis V14".
We actually knew each other when he came to my Sharing Session last year. But our friendship only developed when we found each other on the InvestingNote platform again early this year.

His investing style was more directed towards growth counters with a business edge, while I am influenced more by value investing and contrarian thoughts.

Despite us continuing to agree to disagree on many aspects of our individual investing methods, but he was the one that told me to "Invest in ideas you believe in the most".

He was also the one whom help me realised that NikkoAM-StraitsTrading Asia ex Japan REIT ETF is itself a diversification mechanism.

This made me realise that, as investors, we should be open minded and be ready to hear what others has to say. You will never know when a conversation could help you improved your investing views.

Without further ado, let's get straight to the interview questions and his answers!

1. Tell us more about yourself. 

Simple: My name is John, and I am the founder of Simple Investor SG. In my day job, I'm in charge of running a small business.

2. Understand you have a database website, how did you come up with the idea? And how it is suppose to help investors?

Simple: As both a businessman and an investor, I came to realise the importance of figures in a business. Many people make avoidable mistakes in investment because they either do not enough research, or choose to justify the figure (e.g. PE 20). Hope kills, especially in investing.

I started Simple Investor to simplify the process of doing proper research before investment. Our full analysis is the result of such a simplification: by highlighting warning signs and any investment potentials in a company, subscribers can quickly identify good companies to invest in.

By the way I'm a fan of your Super scorecard too, amazing stuff.

3. How did you get into investing?

Simple: I started investing 9 years ago, after calculating how much was required for me to retire. Shocked by the amount, I turned to the internet and ended up with investment as the only thing I could start on at that point in time.

4. What is your thought process when it comes to stock-picking?

Simple: Instead of picking stocks, I prefer to think of it as buying a business. The stock market is a place where one can get a 10 million dollars company at 1 million dollar and people will be calling you crazy (for doing such a risky thing). In terms of investing style, I'm closer to a growth investor, because the companies I pick are usually ahead of their competitors (and thus they tend to grow).

Firstly, I look at the quality of the company, with the following criteria: performance (rev, net income, cash flow), debt, returns (ROE / ROC) and finally PE.

Any company that fails a quality check is one that I would likely reject.

After that, the price comes into play. I only go for companies that are fairly valued (either currently or in long term), and DCF provides an estimation of intrinsic value.

Never overpay.

5. What is your best investment and worst investment since you started investing/trading?

Simple: Worst investment would be the ones I made immediately after starting out. Believing that my portfolio allocation will reduce my overall risk and wanting a higher returns for my "high risk high return" portion, I decided to invest in Blumont. Turns out holding Capitamall doesn't actually prevent you from losing money.

Best investment is something non-investment related - taking up the opportunity to run a business, even though the pay isn't great. Once you have experience of being responsible for a company, you realize those figures on the financial statement is much more important than most people think they are. If you are a boss and you have some money made in the past, would you use those capital to take over a company that is bleeding cash?

Investment wise, my best investment would 800 Super discovered by my database. Went in 15% of my capital at 0.774 at all time high, because of the value identified by full analysis. Current it's at 1.34.

6. Any thoughts about the current market situation?

Simple: If I had any idea about where the market will go, I wouldn't be telling you (I don't though).
Any great business bought at a fair price will survive a crash, so I would suggest people to look more at the company then the overall market. It gets harder to find value in a bull market, but that doesn't mean value found will be any less valuable because the market is high.

7. Able to reveal which stocks are currently on your watchlist?

Simple: I have Nordic on my watchlist. A watchlist is one you wouldn't add at this price, but will add when it drops.

Usually, I just buy stocks I'm already holding if I do have the capital.

The stocks I am holding are my best ideas, so I'm one who adds on to them as long as there is still value.

8. Finally, any advice for newbie interested to get into investing/trading?

Simple: Advice is something everyone can give, only take them from those you want to become. If you want to learn, then learn from the best. For FA that would be Warren Buffett.

As stated in the previous post, there will be changes to T.U.B Circle and Super Scorecard. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

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