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.