Saturday, September 14, 2013
Thoughts after reading "One up on Wall Street"
One of the main takeaways from reading this book are:
1) Using local knowledge
2) After which you need to classify the company into his 6 categories and start developing the story, each story from each category should have different focuses, perhaps (my interpretation) just like their are different genres of writing, and hence the stories should rightly be different.
What left a dent in my mind are the following questions:
1) What is my circle of competency of these 6 groups?
I know I bought into a few cyclicals, I know given I am just a retail investor, I do not have local knowledge in these industries, but I do know what I am looking for in a cyclicals, what are the markers that will tell you we are in mid-cycle and perhaps nearing the top.
I also know I am very bad at identifying growers, especially super growers.
I do wish to have some skills at identifying stalwarts at reasonable price, I know we should be looking at Blue-Chips in Singapore, but at what price. I thought SPH makes sense to me, but apparently it does not provide any MOS for some very experienced bloggers.
I am also very bad at turnarounds, and asset plays. I have some experince with property counters, I was vested in CES before and at one point of time have Hiap Hoe, Heeton, Wingtai and LKH in my radar. (After the run starts, I stop looking, LKH is looking attractive again though)
The book mentioned about some diversification into all 6 groups, of course, he advised against diversifying for the sake of diversifying and one must have full confidence in what one is buying.
There is one thing which I think I do not really agree, but at least I think I would not be following in the near future. That is staying full vested through the ups and downs of the markets. He mentioned about switching from one group to another, and even between one company to the next within the next company. However, I felt Singapore bourse is shallow as compared to the US, and when the market sours, all counters will fall, and without a war chest, I might not fully exploit the benefits, but it does answer some questions of actually how much cash to put aside.
Also, those buying a company for income or yield, will properly fall into the Category of Stalwart or Slow growers, but there is no mention of Reits. Hmm...I wonder why?
I do not claim to fully understand what the book is trying to teach, the above is my interpretation only, if you have different view or opinion, or do not agree with what I say, please drop a comment
Posted by Sillyinvestor at 8:55 PM