Sorry for the hiatus, was really busy. Didn't really have time to write down my thoughts much. Hell, I don't really have much time to even glance at charts to look for potential buys, let alone screen or analyse the remainder of my watchlist (doesn't help that I just added a few more). It also didn't help due to some changes at work paired with an increased work load.
I'll probably do a mid year update later.
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As some of you may have previously read, I have signed up previously under Fifth Person's Investment Quadrant as a way of learning to improve my knowledge in investing as written here.
When I enrolled, it was only an online only course with comprehensive video lectures to explain everything and piece them together.
The folks at Fifth Person has now decided to make a one day Workshop for Investment Quadrant (IQ), which I feel is a great thing as it allows a better learning experience (Maybe it is just me, but I learn better from a class than watching videos generally). They also updated the materials on the website as well.
So I came in the morning and was given some course materials for the day.
Boy, that binded copy is really thick! But don't worry, it is mostly just the slides they are presenting with not too many words and quite a lot of space to write notes :)
For those of you who may want to attend it in the future, the course requires a laptop, but a tablet PC will do fine as we are mostly referring to annual reports for practice examples and some short bouts of googling.
The topics covered are more or less same as the online modules, focusing mainly on the Qualitative Aspects of analysis as well as a short segment on valuation and portfolio management rather than crunching numbers.
I find this great as I feel that the qualitative aspects of company analysis is one area I need to improve on, such as the business and management analysis. Like what makes the company actually good, growth drivers as well as identifying warning flags such as insiders continuously promoting the company to the media yet unloading shares.
Looking directly at operating segments is some thing I do admit that I generally tend to neglect but visit from time to time. This workshop reminded me on the importance of this.
Victor and Rusmin were doing great in teaching and engaging the class, made it better by using case studies+examples to illustrate their ideas and answering questions to clarify our doubts (they both were pretty tired by the end of the workshop, with Victor particularly having a bad throat that day, hope they recover soon!).
They also ensured that we aren't overloaded and gave us short breaks when they noticed we need more time to digest.
There was a very short part about number crunching, where they taught us how to populate numbers into a spreadsheet to look at the different metrics of a company, and where to find them. There's not much explanations for the part as it can be mostly found on the online materials or googling/investopedia (fortunate too, it's gonna take a day to explain all those to newbies/novices like us). It is just to help us when we run through the numbers as well as look at the flow charts.
I currently use my own variant (as shown in my blog) for my own reference, consists of mostly ratios (definitely not as comprehensive, as I am lazy ^^"). Thinking should I upgrade or keep to my short but limited scope of looking at the general trends of certain metrics.
As for the Valuation Segment, maybe it is just me, but I'm quite glad that they mainly used PE, PB, PCF (similarly to my lazy method here), instead of difficult calculations as they wanted to make a quick estimates on the fly to initiate a position when opportunities arrives (our spreadsheets are not always with us). This gave me some reassurance that what I am doing as well made sense, in fact they refined it further so I'll be adapting their method. They also confirmed my worries of being too optimistic with DCF and similar valuation methodologies, as it is based on forecasting and estimations, which usually has some level of biasness and error prone.
They have a more simplified method of calculating Intrinsic Value (something which I always struggle with), and that is something I'll adapting into my investment strategy too.
Lastly, for the Portfolio Management, they do always remind us that growth drivers/catalysts may not always be realised or we do miss out something resulting in the company not being what we originally thought it to be. Thus, it would be better to spread out the risk evenly by having more or less close to equal weightage of each counter and ensure we are sufficiently diversified instead of concentrating.
That does bring me to think about Buffett. Although Buffett seems to concentrate his positions, it is good to point out that it is only for his stocks, but if you look at Berkshire Hathaway as a whole, you realise that it actually consists of many unlisted companies (that he buys over), and that itself would be considered very diversified.
I'm still contemplating this in my own portfolio strategy, as it is still mostly dividend plays. Figured that I'll initiate positions with equal weightage first, then slowly concentrate on counters that I have gained more conviction in, while capping the concentration (probably higher than the rest but still not like 50% of the portfolio).
In the future when I have more time, perhaps as I delve into growth counters, this approach would be definitely what I'll do.
Well, that's all for the workshop. Sorry for the long post.
Oh right, one last thing I learnt was that we can purchase odd lots of companies we are interested in to attend AGMs (Philips Securities being the best value for money). So do use that to help you.
Happy Investing everyone!
Disclaimer: This is not a sponsored post, just giving my opinions on the course.
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