25 February 2012

Value Investors: More Passion in Study, but Less Transaction and Prediction

After being a value investor, my life and thought change significantly. I realise that the difference between market value and intrinsic value. I also become very enthusiatic in studying and analyse the intrinsic value investment, and understand a particular company based on most reliable first hand information, that are, annual reports and quarterly reports. Abundance of useful information such as how a particular company operates, future prospects and business strategies, are available for us to read. The most importance is they are total free-of-charge. However, when I share my passion with my friends, most of them response that we cannot trust the information from annual reports due to some scam cases. But I still maintain my passion because it is not a very convincing reason for me to be lazy and invest based on news, other people's opinions or even secret tips.

Yes, as my mentor told me before, the road of a value investor is relatively lonely compared to "the power of group" investment strategy. Really, it is. However, I do enjoy the life of value investing, especially when I can help people around me get profits from stock market investment and increase their wealth slowly but steady.

The life of a value investor like me is quite simple. Go to 'market' to buy some 'cheap' (undervalued company) and store them (hold) in inventory, then sell out when people ask with high price (over-valued). It looks like simple, but I must admit that it is very very hard. Because too many 'noises' and 'rumous' try to convince you sell out your shares with cheap price.

Currently, most of my counters in my portfolio have quite attractive paper profits, but to me, they are still undervalued. Most of my investment time is used to evaluate the value of a business instead of predicting the future trend of market price. Because the future is unpredictable.

Sifu is still sifu. A very simple advice makes me to be clear all the time. That is why I have the courage to ask people around me to cheap buy some companies during September ~ November 2011. What is the trend of future? Bear or bull? I don't know and I don't want to waste time to make any prediction.

More Passion in Study, but Less Transaction and Prediction. No matter what trend now it is, nothing can stop me to cheap buy undervalued companies, and nothing can attract me to expense buy over-valued business. It is my belief, as a value investor.

That's all for today. More fascinating articles and sharing will be updated from time to time in Xaivier Blog. So, you are welcome to subscribe our feed, look at our sitemap or simply visit our Homepage.

Written by: Xaivier Chia



pengshen said...

You are a blogger instead an investor...keep it with passion with everything you are doing..add oil..

Xaivier Chia said...

Hi Pengshen,

No matter who we are, e.g. bloggers, investors, traders and speculators, as long as the way we use to earn money do not hurt or bring toubles to other, it is fine.

Thanks for your feedback. "Add oil" too.

Best wishes.

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