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