Conversation With A Master Investor

Posted by Kris | Sunday, March 15, 2015 | , | 0 comments »

I met with my senior for breakfast one fine day. His full time job everyday is actually becoming a driver. A driver to ferry his children to school everyday!

How he survives for a living? By becoming a full time investor and his age is around mid-40s.

We chatted about his investment strategies, which I summarized below. He is a fundamentalist, meaning that he looks for good company to invest and hold for mid and long term.

His strategies are:

What to buy

1. Look for companies that has strong earnings and profit every each quarter
2. Cash rich companies so that the company can tide over bad economic conditions. Low debt
3. Low P/E companies, preferably <20 .="" comment-20--="">
4. Stocks that give dividend each year preferably.
5. Stocks with growth potential. This he mentioned is the hardest to find and gauge
6. Companies that is in current cyclic uptrend economic cycle

When to exit:

1. When company's earnings start to deteroriate. He will sell the stock at the first sign of this
2. He will target at least 100% gain from the stocks he bought into.

He told me that he with his a group of friends (all of them high networth full/semi-full timeinvestors) do fundamental analysis studies together.  All his stocks, he mentioned that he has NO worry if suddenly KCLI hell happens.

From his remarks above, I noticed that it is similar to the theories of one of Malaysia great investors, aka Codename "Cold Eyes". He bought all of the books written by Cold Eyes (only 2 books in Mandarin only i guess) and derived his investment mantra from there.

One thing he told me that struck my heart is :

1) There is NO 100% winning strategy for either Fundamental analysis (FA) or Technical analysis (TA)
2) Must have discipline todo cut-loss losing trades. Typical human behaviour is to take premature profit from good stocks will continue to let bad-losing stocks to bleed to oblivion. And of course must be CONSISTENT & EXECUTE religiously Stop-Loss methods. 

He also discussed all the stocks that he owned (~10 stocks), which one he Sailang and even if i share with you all readers; these stocks are not so ATTRACTIVE to young hot-blooded people like me and

Actually, there is NO trade secret to his methods, just that you need to be very patient to reap the rewards.

P.S He told me that his stocks return is averaging 30% per annum. Very good. No wonder, he can continue to be "Ah Mat" for his children.