"Stress-free investing for more returns, time, energy and freedom"
- Be a long term business-minded shareholder (focus on quality and sustainability of businesses).
- Avoid making economic predictions (long term investment in solid businesses decreases efficacy of economic data points).
- Avoid overpaying for excessive growth (minimize risks of negative earnings surprises and valuation multiples compression).
- Preserve capital (prevent losses from eroding power of compounding).
- Rarely divest unless business fundamentals and/or valuations become unappealing.
- Be aware of behavioral finance biases (overconfidence, self attribution, hindsight, anchoring, loss aversion, herd mentality).
INVESTMENT STRATEGY (VALUE INVESTING + OPTIONS WRITING = SUPERIOR RETURN)
VALUE INVESTING (CORE RETURN GENERATOR)
- Invest in undervalued/under-appreciated companies that meet the following criteria:
- Simple and sustainable business (competitive advantage, wide economic moats, recession proof/resistant, unlikely to be disrupted).
- Solid balance sheet (low leverage, no large off-balance items, no complex financial obligations).
- Strong and steady profitability (consistent earnings, ideally rising fast than inflation and overall economy).
- Robust cash flow (more than sufficient cash flow to pay for CAPEX, debt reduction, dividends and/or share buybacks).
- Shareholder-friendly policy (growing dividends, share buybacks, limited share dilution, significant insider ownership, no excessive executive pays).
OPTIONS WRITING (RETURN ENHANCER)
- Write options opportunistically on equities, bonds, commodities, currencies, indices and/or ETFs.
- Receive upfront cash payments from counterparties when options are initiated (similar to insurance contracts).
- Use insurance float (payments received less losses paid out) to fund value investing strategy (will have enjoyed use of "free" money as long as these options break even).
*Annualized portfolio return vs index (inception to end May 2019):
- US: 20.7% vs 14.0%
- Canadian: 14.1% vs 5.2%
- Singapore: 9.1% vs 3.7%
Focus | Discipline | Contrarian | Patience | Capital Preservation
- Past performance is not an indication of future performance
- This is not a solicitation for business
Copyright May 2019