New Stock Added to the BfGf Portfolio! Here’s a teaser…

M2M

M2M2

The new stock has to do with M2M.  Get it?  No?

 

As I clean up my portfolio of mediocre businesses, I am transferring my cash into businesses that have competitive advantages to latch onto future trends, or simply businesses whose products and services will be used many years into the future.  This requires me to try and gaze into the future, look at the signs around me, and try to see where our world is headed.  Sounds pretty much like gazing into a crystal ball, or forecasting, (which I strongly oppose by the way) , but I base my future bets on personal observations, data compiled by (analysts – don’t know how true is that), reading lots of articles on the internet and raw gut feel.

 

This is the first time I am trying out this approach to investing and I won’t be surprised by the horror that other investors will express when they see my picks for the Bf Gf Portfolio.  After investing in the SGX market since 2010, I am tired of constantly tracking my stocks to see if they have reached my base case valuation, then selling them, and then looking for other places to park my money.  I find this process pointless and though I had a pretty okay run, I worry about the time when my luck runs out.

 

The BfGf Portfolio will comprise of stocks that are aimed for future growth and based on future trends.  They must be scalable, have a chance to be a global hit, and must have a competitive advantage over their peers – or you can say, an economic moat.  I am looking at businesses that own a large size of the present market share which I believe will be a sign of dominance, but at the same time, still have a long way to grow.  Of course, I will pick businesses that are financially sound.

 

For businesses that aren’t unique or are subjected to macroeconomic or project cycles, I don’t even want to look at them, even if they may be be 50% “undervalued” by market standards.  Being an entrepreneur, I know how terrible it is if your business isn’t unique.  It’s a game of Hungry Hungry Hippos where you and your competitors try to gobble up as much revenue from each other as possible.  It’s a slow, painful purgatory of ups and downs but zero growth overall.  So don’t tell me about  companies that make cardboard boxes, companies that do electrical cabling, or property developers or construction companies.  I won’t touch them anymore!

 

Also, as valuation is still a weakness in my investing game, I plan to counter or reduce this risk by taking only small bites out of these stocks, then add more to it at different times of the year, or when I am super confident that the stock is “cheap” by my standards.  No more big, shove all-in bets like how I did in the past.  Rash behaviour and overconfidence will lead to my downfall.  This portfolio will be diversified to reduce concentration risk.

 

Enough of my rambling!  Have you guessed what stock I bought yet?  Aiyah, I will reveal when I got time to post a detailed analysis to stimulate your brain and draw your comments or well-meaning advice!

Meanwhile, you can keep track of the Bf Gf Portfolio by subscribing to us below.

Don’t worry, we got no time to spam you.  The only condition is you much watch the Bf Gf Portfolio for the next 10 years.  Steady ?

 

[wysija_form id=”2″]

 

PS:  By the way, I hate this shitty M2M band.

P.P.S: ROCK NEVER DIES \../

9 Comments

  1. B

    Hi BfGf

    I never thought I’d look a business in such manner, though I’d agree that competitive moats is the number one priority to sustain further success.

    Reply
    1. The Bf (Post author)

      Hi B,

      I used to rely a lot on historical data and past performance of a business and ended investing in sub par businesses. Sure, they may be cheap, but … I can’t see them continue improving their results for 10 years…

      After they reach base case valuation, I have to sell and go searching again.

      Reply
  2. Musicwhiz

    Even companies with moats should not be purchased too expensively. Valuation is key to future returns.

    Oh and by the way, M2M is not a band, they are a girl-duo (i.e. group). At least a band plays instruments…..all they do is sing and look pretty…..

    Reply
    1. The Bf (Post author)

      Thanks for the reminder! Will take note sir.

      Reply
  3. kyith

    not looking at value is speculation in a different way, even if you do not want to admit it. saying you can pay any price for great business can be a lazy way of saying there is no way to value the business, i dunno how to value it.

    Reply
    1. The Bf (Post author)

      I am looking at value, but I am just not super confident with my valuation abilities.

      Reply
  4. Pingback: Bf Gf Secret Stock Revealed: Sierra Wireless (SWIR)

  5. yrjs

    Hi bfgf,

    I chanced upon your website while scouting through tons of personal investing website and I really enjoy your articles and could relate with your humble start. Unfortunately, I don’t think I am anywhere near to your current level of knowledge and confidence at this topic.

    I am wondering about how you view about local blue chip stocks, especially those in the STI. Given that the current STI is very high, I am deliberating whether to buy some of these stocks at this moment. What’s your take on this dilemma? Do you think it’s prudent to buy an a seemingly high price with a seemingly bullish market?

    Thank you for your kind attention and hope to hear your view. Happy investing!

    Reply
    1. The Bf (Post author)

      Hi yrjs,

      Thanks for reading my blog! So glad it’s not another troll comment hahaha!

      With regards to your question about market highs and blue chip stocks – you must ask yourself, are these stocks able to continue improving their businesses or increasing dividends?

      If no – then don’t buy. Unless it is undervalued. (But I personally still won’t buy if I don’t think the business can grow anymore. Many other investors will buy though – nothing wrong with that!)
      If yes – then go ahead and buy.
      If yes but you think a bit expensive for the price, you can either: buy less or don’t buy at all.

      The point is – We cannot control macroeconomics like market highs, corrections, industry problems, black swan whatever… The only thing we have FULL CONTROL is our Portfolio Allocation. So if you are stuck in a dilemma of whether the market will correct or continue surging, try keeping a warchest of cash that allows you to take advantage of extreme corrections. In times of bull markets & optimism, stay invested but never ever touch the cash in that warchest.

      I am using this method to simplify decision making processes.

      *But personally, I don’t really like the STI blue chips because I don’t think they can grow much (of course I may be wrong!) and I will only buy them if I think they are really cheap and can give me good dividends to provide some diversification for my portfolio.

      Gurus, please feel free to give your 2 cents worth! ( Or even better, tell me if you have spotted a good STI blue chip that pays good dividends and can continue growing!)

      Reply

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