Seeking for a system

Its been some time since I last post as I just got back from hongkong. Recently, I have been reading a book named "The Winning Investment Habits of Warren Buffet and George Soros" and learnt quite a bit from it. Although their styles are poles apart but they share the same mentality where they tend to have their own system.

Currently, my strategy is to buy stocks with relatively good business by using some ratios like PE, PB to determine and also to read through their annual report to get an idea of their management, competitors and their prospect. Secondly, I will also check out the company's financial status by going thru their balance sheet, income sheet and cash flow and in my opinion, cash flow gives you the best picture of their financial status because this is where it involves all the transactions which is finalised. Example : Some company may have high revenue but low cash flow provided by operational activites due to large amount of trade receivable which may result in bad debts but having said that, I will still check their history because they may not be able to report the actual revenue due to the time conflict of annual report preparation.

Till now, I dont have a system to determine my exit therefore I'm adopting a buy and hold strategy whereby I will only sell them if their business fundamentals are greatly affected. One downside of this system is that I'm still not confident to judge a business therefore it may result in a early or late exit which may result in huge losses... Guess I have to do some trial and error and also to read up more!!

My Portfolio

Its bubble everywhere hence currently, I'm taking an extra effort to re evaluate my portfolio. I have started investing in the Singapore Equity Market on December last year and since then, my portfolio has been growing at a tremendous speed.. To track my stock growth, I have predetermine a price for my portfolio which is $1 and subsequently the price will be determined by the nav of the portfolio therefore in the event of any withdrawal or deposit of cash , the growth will not be affected. As of today, my portfolio has escalated to $1.40.

My Portfolio


I have adopted a fundamental approach for my stock selection but recently, I just realised that my analysis is only at the tip of the iceberg whereby I didnt take many things into consideration . Together with fundamental analysis, I also believe in a "buy and hold" strategy because my thought is that frequent trading will diminish one's portfolio due to the comission incurred.

No one can predict when will the bubble burse hence I may realise some of my current stock to cash so when a good opportunity arises, i will not miss out. The idea situation in investment is to buy low and sell high so I am constantly reminding myself not to do the opposite unknowingly by not succumbing to 2 human psychological factors; fear and greed.