The topics (in order) were:
- How to Create Multiple Streams of Passive Income Through Dividend-Growth Investing (Rusmin Ang)
- How to Minimize Risks and Maximise Returns with Smart Portfolio Management (Aw Choon Hui)
- How to Boost Your Capital Gains Through Value-Growth Investing (Victor Chng)
- How to Identify and Invest in Deep Value Growth (Tay Jun Hao)
- Panel – Stock Opinions and Portfolio Insights (AK and the 4 prior speakers)
Rusmin showed the Dividend Machines 8 steps (you can go for their course, which I enjoyed. Review here).
I'll share some of the criteria (I can't share all because it is Victor's and Rusmin's rice bowl, but I share those that can be publicly found on the Fifth Person webpage such as here)
- The Company must pay dividends
- Historical dividend per share must be stable or rising for the past 5 years
- Look for Mid-Large Cap stocks
- Company Fundamentals must be stable
He pointed out that the management integrity must be good, avoid any companies where there is "funny" related party transactions (the example was Silverlake Axis). [Thanks Rusmin, I'll add it to my checklists :p]
He also pointed out the ST Invest article where emotions are the number one cause of error in investments. So one should invest money they are willing to lose instead of using their emergency funds or life savings for short to mid term use.
He showed the rocky side of investing, where it may take years before you see returns, especially during bear markets.
He ended with a nice video, titled "What makes a Hero", using it to illustrate an investor's journey, very interesting. :)
How to Minimize Risks and Maximise Returns with Smart Portfolio Management (Aw Choon Hui)
The second speaker, Mr Aw from GYC, pointed out that many analysts and investment news are not consistent, meant to generate more trades or reads than actual results. He showed a statistic as well that your investment returns is reduced if you followed the news, as compared to ignoring the news.
He talked about knowing your target and goals, then reverse calculate and work towards it (I preach that a lot to my colleagues and friends)
- Know your current condition
- Know how much risk can you afford
- How to work towards it
He also showed for many people, a "Fire-and-Forget" strategy is more beneficial as it reduces overtrading and emotions, thus they get better returns than actively managing their portfolio.
Showed a STI ETF outperforming funds year on year, with only Aberdeen only beating it by 0.2%, and that most funds don't beat it due to commissions and fees. (Thus I also suggested for many, a STI ETF like the POSB InvestSaver, is an easy handsfree method for investing. I am looking to do it for my future SRS account too!)
Pointed out volatility =/= risk, which many books do say but I do sometimes question that logic. Sure, those losses are paper losses and over time should recover, but I think also got sometimes, really market drop and just nice your retirement. He did point out, which I agree, that volatility is good because it provides nice opportunities to buy and sell :)
He gave an overview about portfolio management (sorry for my lousy S4 camera).
The last slide is interesting, looking at the expectation of the yield for those different money pots
- Reserves (A) – Short therm liquidity, low risk, looking at 1-2% p.a. (OCBC 360 or even fixed deposits anyone?)
- Income (B) – Income to fund lifestyle, low to moderate risk, looking at 3-5% p.a.
- Legacy (C) – Leaving for beneficiaries, moderate risk, looking at 6-8% p.a.
- Growth (D) – Grow wealth, high risk, looking at >10% p.a.
Victor's segment was more on the Investment Quadrant (I'm considering to go down one day to learn more as I am impressed with the DividendMachines course, Victor and Rusmin has a book called Value Investing in Growth Companies which shows a similar concept as well).
He shows how to screen a company based on 4 areas, Business Model, Management Quality, Financials/Balance Sheet and Valuation of the company.
He went on to talk about 2 case studies, Yakult and DKSH.
Didn't managed to learn much as I am not very good at looking at growth, frankly speaking. Will need to learn more as time goes by.
He spoke about portfolio management where he suggests
- Increase or having a high win rate (investing is a probability game, so if you can look to win more instead and lose less, you have a better edge)
- Optimal Risk to Reward ratio by having a larger margin of safety (looking to double and more)
- Consistent position sizing/equal portions of allocation for each stock counter to balance risk
- Optimum number of stocks for diversification to reduce risk is about 5-30 stocks
I'll admit that I kinda was brain tired (already half awake thanks to lunch for Victor's segment).
I'll just list some points that I feel was relevant and useful.
Ben Graham suggested to "Buy stocks below liquidation value".
The Heart of Deep Value Investing is to "avoid losers and let winners take care of themselves".
By looking at investments by the maximum amount you can lose rather than how much you can win, you aim to reduce downside risk, and figure out what NOT to buy.
He also mentioned to avoid hot stocks instead looking at stocks outside the news, as the news are hyped. Make sense because this pushes the prices up (and from experience, usually when the news comes out and people all around you start buying/talking about it, it is too late).
Panel – Stock Opinions and Portfolio Insights (AK, Rusmin, Victor and Jun Hao)
And lastly came the panel discussion, where sadly I did not win the lucky draw :(
AK, you appear so late lor around 4pm. =(
Some points I gathered then:
- Keep learning and increase the circle of competence
- Keep being updated on news
- Look at news for opportunities (not stock results but rather about the macro economy)
- Getting into the demand early due to lack of supply (need not be stocks), can get a nice pile :)
- Price =/= Value
- Look at cash inflows of businesses
- Look at crisis periods to see historical P/E and P/B ratios to look for value buys
- Invest cash aggressively during a bear market, invest conservatively during a bull market (try to only buy if there's a discount/idea)
- Signs of suspicious stocks
- Auditors resigning
- Company facing structural headwinds (as most investors cannot outwait the cycle)
Wanted to take pictures but had to rush home because work the next day :(
Well, that's all from what I've learned from InvestX Congress 2015! :)
No comments:
Post a Comment