The Invest X Congress 2015 took place last Saturday on 17 October 2015. It was a full day event, packed with valuable information, analysis and investment strategies shared by the speakers. The event was rather packed with more than 500 attendees who turned up thirsting for knowledge and stock ideas.
For those that missed the event or couldn’t make it, here are some valuable lessons I learnt that day. Some of these lessons also serve as good reminders to help us along our investing journey.
1. The journey is not a straight line
In the first segment, other than talking about a dividend investing strategy, Rusmin from the Fifth Person shared with us an important reminder that stock investing is not a simple straight line.
More often than not, we will be in for a roller coaster ride, riding the volatile ups and downs in the stock market. He shared an example of a stock and tracked its ups and downs through the Asian Financial Crisis, Internet Bubble, The Great Financial Crisis and the current situation now.
He took fellow investors on what he calls this ‘hero journey’ where you will constantly question your decision as the stock you bought, did hours of research on, keeps sinking and sinking for no reason…
This is a great reminder for all of us. In fact, I have never encountered any stock which I bought that shot up in one straight line.
Victor pumps up the crowd before he shares 2 valuable stock analysis!
2. Have a framework for investing
Victor from the Fifth Person shared how he pick stocks using a very comprehensive and easy to understanding framework which he calls the Investment Quadrant. I myself make use of this framework when making my stock picks as well. (Except maybe I don’t research as intensively as Victor! I am guilty as charged.)
Victor shared 2 stocks which he picked out using this framework and presented a detailed analysis of his thesis to us.
Having a framework for stock-picking not only helps you save time, it allows you to make decisions in a systemised, logical and disciplined way. Stocks that fail to fit in this kind of frame work will be automatically filtered out.
Every investor should have a certain framework for investing. What’s yours?
Jun Hao from the Asia Report shares his Deep Value Investing strategy.
3. Deep Value Investing
I truly enjoyed Jun Hao’s (from The Asia Report) portion of the seminar. He talks about deep value investing, an investing style which focuses on finding net net stocks or stocks that have hidden gems not explicitly visible in the balance sheet.
Net net investing is a style pioneered by Benjamin Graham and followed by Warren Buffet in his early days to amazing results. Jun Hao himself has enjoyed a whopping 27% annualised return on his own multi-million family portfolio!
He shared some of his past experiences in discovering value gems and showed us how to go about digging up such cigar butts using a case study of a stock which he put his money in.
He also talked about the investor psychology and highlights the importance of contrarian thinking. Basically, hot stocks do not provide the deep value that his strategy focuses on.
In fact, I find his case study so convincing that I am interested to get some skin in the game as well. But as this investing style is a far cry from what I am comfortable with, I am still mulling over my decision.
Sit happily in my circle of competence or try to expand that circle and grow as an investor? Hmmmm….
AK educates and entertains the crowd with his trademark candor.
4. If it’s in the news, it’s probably too late!
Towards the end of the segment, there was a panel discussion and the famous AK from ASSI joined in with his trademark China Man disguise.
The moment AK goes up on stage, the serious, reflective mood of the room was lightened. He shared jokes and funny experiences in his candid style – I personally think AK should go and be a standup comedian after he retires!
One of the important things that the panel shared was how retail investors are usually the last to get the news of a stock. Usually by the time we kacang-puteh investors get wind of a news or a trend, the stock price has probably made such a run up that there’s not much value left for us.
Victor then shared about how an acquaintance of his made millions by investing in properties while they were under the radar. The moment the property is discovered and all the media hoo-hah puts it into the spotlight, his friend would ship it off to a willing buyer. That rich acquaintance has apparently been using this strategy for many years.
This stark reminder got me thinking more deeply whenever I read any investment article. I am also starting to be more aware about what ‘hot’ stocks that investors are drawn to and try to do the converse – avoid them.
The panel shares their experiences from their investing journey thus far.
5. Making Mistakes and Moving on
The panel of AK, Jun Hao, Rusmin and Victor, despite their pro-investing skills, share about their worst investment mistakes and the lessons learnt from them.
AK talked about how he believed ‘insider info’ from a friend and sold off his stock too early after buying it. This stock would later turn out to be a 9 bagger.
He then reiterated about how we should not always believe insider info. He said that he is still ‘friends’ with the insider but they have stopped talking. (*audience laughs*)
Jun Hao revealed how he bought an undervalued company but to his HORROR, the ‘marketable securities’ in the company’s balance sheets turned out to be holdings of shares involved in the infamous penny stock saga a few years back. He quickly dumped all his holdings as he was uncomfortable of such dubious relations.
Rusmin and Victor shared about how they once lost a 6 figure sum in a company that was committing accounting fraud. They talked about constantly testing their framework of sifting out fraudulent companies on new real-life case studies and track the verdict whenever such accusations or scandals surface. They are constantly seeking to refine their stock-picking skills to steer clear of creative, modern day shenanigans.
Yet despite all these mistakes, the panelists have all enjoyed tremendous stock-picking success!
Never stop learning
I am also planning to pick up some of the books recommended during the seminar to further hone my investing skills.
All in all, it was a day well-spent, learning and mingling with other fellow investors.
Dear reader, hopefully one day, we get to meet at such congresses!