Investment Methodology

An investing style with huge emphasis on buying stocks below it’s Net Current Asset Value (NCAV).

*NCAV = Current assets minus total liabilities.

1. Value
Stock price should be below NCAV, with good margin of safety, low PE, and low PSR. Companies must be of profit making with good accumulated profits.

2. Growth
Stock whose price is above NCAV not by a terrible margin, with good growth prospects will be considered too.

Magic Sixes (Peter Cundill, P/E <6 P/B <0.6 Dividends >6%)
Ocassional screening that produce magic sixes stocks with decent margin of safety will be considered too. Dividends can be lowered to 4% when 6% and above are non-existent.

Process:

Quarterly stock screening by Google stock screener/ FT Screener, after the screener has filtered through 700+ listed companies, will go in depth with the remaining companies, personally filtering out majority of rmb reporting companies.

Pros & Cons of value investing in Singapore.

Pros

  • Minimum time spent (4 major screening per year and also reading up of reports of invested companies)
  • Do not need to monitor closely
  • Minimum downside

Cons

  • Portfolio can be concentrated if only investing in Singapore (10% per company in portfolio easily)
  • Minimum emphasis on dividends
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