Interview with Cheng

Interview with Cheng

Postby winston » Sat Mar 06, 2010 7:30 am

This week, we are very please to introduce Cheng ..


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

Very easy question, this is my last name.


InvestIdeas: What can you tell us about your background?

I am still a student, studying Physiotherapy which is in the medical industry.


InvestIdeas: How long have you been investing / trading?

I started exploring personal finance stuffs when I was around 18-19. The first book that started me thinking, was "Rich Dad's Guide to Investing" by Robert Kiyosaki, the author of "Rich Dad Poor Dad". Ironically, I did not read his first book, the "Rich Dad's Guide to Investing". It was all I need to introduce me to the investment world.

I remember he talked about different investment vehicles like stocks/bonds/financial derivatives, real estate and your own business.

I paper trade for around 2+ years and in 2007 Feb I fired my first bullet with my personal savings over the years. Long story short, I have around 2.5 years of paper trades and 3.5 years of real investment experience.


InvestIdeas: What is your Investment Strategy?

My investment strategy has changed and adapted according to my personal needs throughout the years. I started off with value investing. Gained knowledge from investment blogs like "Eight percent per annum: Value investing in Singapore stocks", "extraordinary profits" and Musicwhiz's blog.

With the help of investopedia, it helped me better understand value pararmeters better, their advantages and limitations. I have also read all of Buffett's partnership letters when he first started out and "The Intelligent Investor" from Benjamin Graham. All the above has helped me form my foundation in investing as a whole.

To further improve, in 2008-2009, I explored Technical Analysis. It forms the basis for my buy and sell decision on price action. It is also a diagnostic tool to detect what the BigBoys are doing through high volume action and past price action.

As of now, my buy entries have improved over time with the help of both 80% FA and 20% TA. However, my selling decisions are lousy as usual. Anyway, it is not always possible to get the timing right when the market is at it's euphoric mood.


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

1) Security Analysis (Very technical but interesting)
2) Reminiscences of a Stock Operator (Very interesting book, described the emotions and ups and downs on the life of Jessie Livermore, a trader's life.)
3) Warren Buffett partnership and Berkshire shareholder letters. (Over the years, one would have noticed how Buffett has adapted to changing market conditions and evolved as an investor. He is a lot more sophisticated than you think.)
4) I also hope to pick up Option Trading from J.L. Lord when I have a bigger account size. He has written 4 books in total. The best is "One strategy for all markets". Sounds good heh?


InvestIdeas: What are your investment vehicles?

I only invest in the Singapore stock market. I will enter the US market when I start working and saved a sizable account. In the US market, there are a lot of derivatives to play with when you are buying or selling a stock.

To keep it simple, if Buffett wants to buy ABC company at $50, the current price is $70, he can sell options to buy at $50. Two possible senarios can happen, the price stays above $50 and he collects the premium or the price falls to $50 and he buys it. We cannot do that in the SG or HK markets.


InvestIdeas: What has been your best investment so far?

My best investment is Kingsmen and it is also my first lucky investment. I bought it when valuations are low, trading at 7x PE(slighty below industry average PE), giving at least 5% dividends and ROE >20%. Their prospects are good due to the setting up of Integrated Resorts. I continue to like companies of the above criteria. Prospects is key, it's all about the earnings and recurrent earnings generating positive cashflow.


InvestIdeas: What has been your worst investment?


My worst investment is ChinaAcorp. A 100% speculative investment with no TA or FA involved. Rumours suck! Heard that there will be a takeover, but in the end is nothing. 50% losses. I only allocated a small % of capital due to the highly speculative nature(more gambling), lucky I'm still of sound mind and did not lose much.


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

Keep an open mind, read everything, rationalise, stay hungry, always curious and take calculated risks appropriately. Practice the 3Ms: Mind, Money management and Method. Adopt the investment strategy that fits you. Those are words from a 24yr old..

Ps: You can get better advices from the seasoned investors in this forum, they are much more experienced.


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

My medical books. lol! Life is fragile, we only live once.


InvestIdeas: Are you able to tell us a bit about your family?

I am the only son, living with my Mom and Dad in a humble little space in Singapore.


InvestIdeas: What are some of your other interests?

I like to play basketball, go(wei qi), cycle, jogging, loves to eat and hangout with friends for a few drinks.
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 Cheng

Postby lithium » Sat Mar 06, 2010 8:12 am

Dude, keep on doing what you are doing. I think you are a sure winner ;)
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Re: Interview with Cheng

Postby Musicwhiz » Sat Mar 06, 2010 8:19 am

Thanks for the interview Cheng! Keep up the learning and I am sure you will do great in the long-term! :D
Please visit my value investing blog at http://sgmusicwhiz.blogspot.com
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Re: Interview with Cheng

Postby helios » Sat Mar 06, 2010 9:07 am

TQ Cheng Cheng,

You taught me a lot of things too, especially those 'observation skills' which are applicable in these markets ...

See you at our movie date!
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Re: Interview with Cheng

Postby Aspellian » Sat Mar 06, 2010 9:11 am

Great interview! you are off to a solid start, continue to do what is right. always keep your head on your shoulder and you will do well.

But when the europhia is all over, remember to cut loss or get out of market. remember that we can never out-smart the market.

PROMISE, PASSION, PEACE, POWER, PURPOSE, PLAN, PATIENCE, PERSEVERANCE, PROTECTION
DELIGHT, DISCIPLINE, DILIGENT, DETERMINATION, DESIRE

"Its not whether you're right or wrong thats important, but how much money you make when you're right and how much you lose when you're wrong." - Warren Buffet
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Re: Interview with Cheng

Postby millionairemind » Sat Mar 06, 2010 10:09 am

Hi Cheng,

Nice interview. Thanks for sharing :D

Just got a question. What's your feeling like growing up as an only child? Do you ever feel lonely?

I am asking cos' I only have a boy and have no plans to have any further down the road.

Cheers,
mm
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: Interview with Cheng

Postby la papillion » Sat Mar 06, 2010 11:37 am

Only child are selfish, evil and cocky...like cheng :shock:

His nickname is actually cocky cheng ;)
An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return - Benjamin Graham
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Re: Interview with Cheng

Postby Cheng » Sat Mar 06, 2010 4:29 pm

la papillion wrote:Only child are selfish, evil and cocky...like cheng :shock:

His nickname is actually cocky cheng ;)


LOL LP! Boo! :x :lol:
"The really big money tends to be made by investors who are right on qualitative decisions." Warren Buffett

"Risk no more than you can afford to lose, and also risk enough so that a win is meaningful." Ed Seykota

Scan with FA, Time with TA, Volatility is my Friend. :)
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Re: Interview with Cheng

Postby Cheng » Sat Mar 06, 2010 4:41 pm

millionairemind wrote:Hi Cheng,

Nice interview. Thanks for sharing :D

Just got a question. What's your feeling like growing up as an only child? Do you ever feel lonely?

I am asking cos' I only have a boy and have no plans to have any further down the road.

Cheers,
mm

Hi MM,

Sometimes can be quite loney. So I will find ways not to be lonely and keep myself busy. :lol:
I train myself to be more sociable and make lots of friends. :)

I have my own room. Don't have to share things haha... Much more freedom and personal space. I live in a 3-room shophouse apartment, so if I have a sibling will need to share the same room. Unless you have a big house with lots of rooms to spare for your kids haha...

If your son is always with you, no reason to be lonely, Dad can also act like a big brother.

Cheers!
Cheng :D
"The really big money tends to be made by investors who are right on qualitative decisions." Warren Buffett

"Risk no more than you can afford to lose, and also risk enough so that a win is meaningful." Ed Seykota

Scan with FA, Time with TA, Volatility is my Friend. :)
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Re: Interview with Cheng

Postby Cheng » Sat Mar 06, 2010 4:49 pm

Aspellian wrote:Great interview! you are off to a solid start, continue to do what is right. always keep your head on your shoulder and you will do well.

But when the europhia is all over, remember to cut loss or get out of market. remember that we can never out-smart the market.


Yes, the market is always smarter than us, to a certain extent. Maybe this is were we can find price and value discrepancies. However, the market is getting more and more efficient due to the availability of information to the general public. That's why looking at valuations alone is not good enough, most of the time is already priced in. :(

If the tide turn, I will cut fast fast. But sometimes it also takes time to realise it is a mistake. :( Investing is not easy.

There is a trader whom I occasionally go and read his blog(shall not mention), he cut losses very fast, hit 8-10% will definitely cut. He sticks to his cut loss principle and money management, but guess what? He takes profit fast and cuts fast, overall ~80% of the time he is cutting losses. Sometimes I ask myself, it is a strong company when it drop 8%, should I cut? For his record, after he cut, most of the time the price went up again. Trading is also not easy. :(
Last edited by Cheng on Sat Mar 06, 2010 5:03 pm, edited 1 time in total.
"The really big money tends to be made by investors who are right on qualitative decisions." Warren Buffett

"Risk no more than you can afford to lose, and also risk enough so that a win is meaningful." Ed Seykota

Scan with FA, Time with TA, Volatility is my Friend. :)
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