Interview with Stilicon

Interview with Stilicon

Postby winston » Fri Jan 01, 2010 8:47 am

On this New Year's Day, we are very please to introduce Stilicon...


Investideas: Why are you using this nick and what does it mean ?

Stilicon is just an old name, not very used anymore, and so suitable for choosing a nickname. For those who care, a famous Roman general, born a vandal, in the very late Roman empire wore this name. Not that I do specially care about those things. I chose this nickname perhaps 10 years ago, and keep using it everywhere. Easier to remember.


InvestIdeas: What can you tell us about your background ?

Business graduate, school in Europe. Started in Auditing / Accounting in a big American firm that disappeared in the Enron scandal. Then I moved into the Pharmaceutical industry. Worked there for almost ten years.


InvestIdeas: How long have you been investing / trading ?

I caught this disease ten years ago. I spend the first four years losing money. Then I decided to become serious about it. I am doing it more seriously for about six years.


InvestIdeas: What are your favorite books on trading/investing?

I remember reading with attention "The Hedge Fund Edge" from a certain Mark Boucher seven years ago. With that book in hand, I started developing my first models for investing. At that time, I dreamed of developing a timing model (on a very large time scale) to decide whether to be in the market or out.

But basically I never liked to buy the much hyped investing books which are published every year.

Apart from that,

- I mostly read the weekly letter of John Mauldin (which I found very instructive in 2003 or 2004 and which has become far less interesting nowadays). Mauldin reads a lot and through his letter, you can gain some new interesting addresses. His Out of the Box letter is sometimes much more interesting. Subscribing to both is free of charge.

- I used to read the Daily Reckoning and other newsletters from the Bill Bonner & Co gang (also known as the Agora gang), because I share most of their views on our present world, but I am not sure this helps a lot for investing in our present world, albeit I still enjoy reading them.

- I read as much as I can from Donald Cox, which used to publish a free and very interesting monthly letter some years ago (Basic Points), which you can read again nowadays through more complicated ways ...)

- I am a fan of Jim Rogers, Marc Faber, even at a time Peter Schiff, for their views on the economic global landscape. I especially enjoy their disregard of the keynesian "theories" (which are often mere clap-traps fabricated to support the grab of power by the State, everywhere and for the most part of the last two centuries), and I appreciate their more solid views based on the Austrian School.


InvestIdeas: What are your investment vehicles ?

Mostly dividend producing companies. I almost never consider non dividend paying companies. Except for Gold mines. I keep a large portion of my portfolio in REITs, in Telecoms, in Canadian Oil & Gas trusts, and recently I added some Pharmaceutical companies.

For the rest, I trade (because I like it - albeit I am not sure it is very rational). For trading, it depends. This year, I traded mostly Canadian Gold mines, and I did my first ventures on the HK market, but restrospectively I should have done it much more aggressively !


InvestIdeas: What has been your best investment so far?

I dislike bragging about my super-exploits in investing, mostly because for every positive story, I can recall a equally negative story. But for the sake of answering, I remember having doubled a position in about four months on a small rare metal producing company in Russia and Kazakstan, which was quoted in London.

Doubling in four months was obviously pure luck. But I remember having spent many hours researching this company. It could have evolved very differently, but basically, the lesson is that if you try to search for logical call, sometimes based on macro-economic evidences, if you take the time of researching, then you should logically on average make a profit.

This story reinforced my conviction that it could be done, through patient and logical work. Of course, you must still be aware that sometimes work doesn't pay. But on average, it is the best bet you can place (as far as I know).


InvestIdeas: What has been your worst investment?

I had many desillusions. Notably in Singapore, in investing in so-called S-chips. I lost about half of a line on China Sky (textile producer) before calling it a quit. It was pretty bad. Since then, I completely stopped studying the S-chips. Too small, too risky.


InvestIdeas: What advice do you have for a young/newbie who is just starting out ?

First, you have to realise that earning money on trading/investing is much much more difficult than you typically think. On average I was told that retail investors loose money on trading almost every years.

So, if you fancy easy and quick money, you should pursue another path (maybe become an actor/actress, or a singer, or a yakusa or even better a politician ...).

Then you should plan everything not to loose money. This means learning to manage your risks. This was basically my first lesson in the first years : I took far too much risk. Sometimes, I think I still do.

For lowering your risk, you must read a lot, research a lot, and wait for the good occasion where risks seem very low compared to the reward. I now believe that the less I trade, the better I perform.

You must also organise your work. Personally I developed a small database software, where I compute all the financial data of each company I follow, for at least the last three years. Then I calculate handfuls of ratios.

I aggregate those different ratios in some sort of score, which enabled me to have a first classification of how well a company suits my criteria. I find it useful especially to keep an objective look on the company, and try not to act emotionally.


InvestIdeas: Are there any other non-investment related books that may have influenced your outlook on life ?

Maybe, the best book I ever read ( in the optic of deciphering our present world) is "Atlas Shrugged" from Ayn Rand. I could almost say that it still helps me in my investing. I read it very late (after reaching 30 years) because I come from a country (France) where it is almost forbidden (it is not yet translated and published in French - to give you an idea of how France has become a backward society over the years.)

I was also very much impressed by "The Ethic of Liberty" by Murray Rothbard.

Those two major books help me preserve my mental equilibrium while still living in Europe.


Investideas: What are some of your favourite investment topics in the forum ?
REITs in Singapore and HK
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Interview with Stilicon

Postby helios » Fri Jan 01, 2010 9:15 am

YO Stilicon,

Personally, i am curious to know how you write/ program your own trading software?

Also, if this is possible, can you give us a review of your recent bio- pharma- companies?

As these companies usually have long gestation periods (excluding those generic drugs makers), what is your horizon; any gains by far? i guess, you would adopt pharma- as a defensive play rather than those of a speculative play, right?

thank you in advance.
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Re: Interview with Stilicon

Postby kennynah » Fri Jan 01, 2010 3:38 pm

Stilicon :

very interesting interview.. thanks for sharing your investment history and styles...

wishing you investment success in 2010 !
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Re: Interview with Stilicon

Postby helios » Fri Jan 01, 2010 6:50 pm

i wanna to ask what's "yakusa"?

My assumption is that this is a japanese word ... ref. to crime syndicates (skillful organisations) in Japan ...

:roll: :roll: :roll:
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Re: Interview with Stilicon

Postby kennynah » Fri Jan 01, 2010 7:01 pm

that would be "yakuza", i guess...

"yakusa" is "yonex" new line of tennis rackets... ;)
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Re: Interview with Stilicon

Postby stilicon » Sun Jan 03, 2010 4:35 am

Reply to all :

First happy new year to all (even if some of you might prefer to wait later in the year for this, ... I guess it cannot hurt)

a) Sorry for my bad spelling. By "yakusa", I meant yakuza, or mobster, if one prefers.

b) about my pharmaceutical new investment : I added six weeks ago a long term line on Astrazeneca, on the London Exchange. Astrazeneca is one of my preferred big pharmaceutical companies. They are well managed. Meanwhile, they have underperformed most of the equities indices over the past several years. Mostly because of a trendy fashion which says that Big Pharma is over.

(In the same line, a lot of people like to say that Telecom will inevitably decline and that telecommunications will become free in the future). Well, I completely disagree. What offers a very useful service, has some value. My bet is that this under-performance of the good Big Pharma companies will reverse in the coming years. At present, I do not view them as expensive at all.

Of course, with this kind of investment, you can't expect to double up in a year, but this never was my goal. My goal is to receive sustainable and if possible increasing dividends over a long period of time (say ten years or more, if nothing change).

For better - or say - riskier ideas, I intend to ask San San, the true specialist of biotech investing. I also wish someone could share some insight on some China pharma companies. Inevitably, over the next ten years, some will tremendously increase in value.

(ps: I wonder what San San thinks of Astrazeneca ...)

c) My little database is very useful. I am very (ie far too much) proud of it. It runs on Mac OS X. It uses an SQLite engine (through the Core Data module). It does get instantaneous quotation from finance.yahoo ( for the share price) in a click. It enables to list all the company you want to study in a database form. Plus it has a portfolio management module in it.

I have written it in cocoa (objective-C) and can give the code to anyone who cares (anyone who foolishly wish to loose hours (lots of, I presume) to install it and adapt it to one's needs !). But, it is by no mean a trading software (I can't execute trades through it).
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Re: Interview with Stilicon

Postby helios » Sun Jan 03, 2010 9:09 am

Wah man,

You motivate me to read up on Astrazeneca ... all i know is they have good gastric drugs.

One of their blockbuster is Nexium [$5 Bil sales global] - many years back, i was conducting the phase 4 [marketing] clinical trials for this drug. It is facing low cost generic competitors now untill their patent protection governing the manufacturing process comes off in 2015.

anyhow, let's discuss this separately on the AZN thread, dude!

NB: i like your note on the pharma, why would the trend reverse? due to reverse innovations?
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