I am a Singaporean investor who aspires to become a successful investor by learning the art and science of Value Investing. I have several role models that I look up to; Warren Buffett, Charlie Munger, Howard Marks, Mohnish Pabrai, Peter Lynch and many more.
First exposure to the world of investing (like a newborn baby) in 2014 (20 y.o.) when i came across three books, “Rich Dad, Poor Dad” by Robert Kiyosaki, “Gone fishing with buffett” by Sean Seah and “One up on Wall Street” by Peter Lynch. Subsequently, the term ‘Value Investing‘ makes a lot of sense to me and I really love the idea of it. Tried ‘Technical Analysis‘ (TA) but I did not suit me, it just doesn’t make sense to me.
I bought my first stock in Nov 2016 (22 y.o.) and for that one year i felt that i did not take investing seriously (more of speculations). It was only until in Sep 2017 when i decided to take charge of my own investing journey, reading many books and reflecting on my decision-making skills.
Why name as ‘thebabyinvestor’?
I feel that all successful investors started off as a ‘baby investor’ (even Warren Buffett, although he started at a really young age of 11 y.o.). It is through consistent learning, perseverance, effort and patience to become a great value investor.
Always approach learning like a new born baby, be humble and have an open mind.
“Rather than thinking, ‘I’m right.’ I started to ask myself, ‘How do I know I’m right?” -Ray Dalio
Why did i start this blog?
I have never thought of writing any kinds of blog as i do not have the habit of documenting down my thoughts. After reading several investment blogs, it struck to me that it is a great way to channel my thoughts and track my progress. Here are some other reasons of this blog:
- To provide a channel for new investors to kick-start their investment journey smoothly through learning from my mistakes & what i did well.
- To jot down key takeaways from companies research, books, videos and reflections.
- To share my ideas with other investors, and to discuss & learn from investors who are more experienced.
- To improve on my writing skills & the ability to express my thoughts.
- Most importantly, this blog serves as a decision journal for myself to keep track of the decisions that I make and review them so as to prevent hindsight biases.
My investing philosophy
There are a few kinds of investment opportunities that i look out for, all of them boils down to the concept of value investing.
- Build a concentrated portfolio (<10 companies)
- Collect great quality Micro-Caps (<$1 billion USD market cap) as much as possible
- Look for fast-growers with reinvestment & widening moats. Companies that are able to reinvest their profits are great compounding machines
- Owner-operators (management with high holdings in their company) preferred, aligned thinking as shareholders
- Companies that are able to scale globally
While i understand the risks of a concentrated portfolio, i feel that if i can truly understand the companies which i am holding (staying within my Circle of Competence), these risks can be mitigated. By having this style, it constricts me to only finding really good companies with excellent business model which are undervalued/fair valued and stay away from those mediocre ones.
Other important factors that affect my investment considerations:
- High Return on Invested Capital (ROIC), at least 12% (shows the efficiency of the company at generating profits)
- Increasing revenue, net profits
- High Net Profit Margin (NPM), at least 12% (indication of the company’s competitive advantage among its competitors) & with strong and durable moat to maintain them
- Low Net Debt to Equity Ratio, less than 0.5 (so the company can survive in face of crisis)
- Honest & capable managements in the company
And lastly, the valuation must be priced reasonably (art & science), with at least a margin of safety that i am comfortable with before i make the decision to buy them.