What is a realistic return on value investing?

(21-06-2012, 12:23 AM)d.o.g. Wrote: .

2. There was a bull market during 2003-2006.

3. Historical volatility is high. I have never had an "average" year where returns were 20-21%. Sometimes it was much higher, sometimes much lower, even negative (2007, 2011).

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I believe you are out of sync for 1 year. Bull Market lasted till 2007 (STI +16.63%). Very likely, your negative year should also be in 2008 (not 2007) when STI was -49.41%.

"I guess reading investing books ALONE does not make one an investor"

Knowledge and Competence - same same but different: http://singaporemanofleisure.blogspot.sg...tence.html

(21-06-2012, 08:37 AM)Jared Seah Wrote: "I guess reading investing books ALONE does not make one an investor"

Knowledge and Competence - same same but different.

http://singaporemanofleisure.blogspot.sg...tence.html

It's not just READ alone but rather, we need to UNDERSTAND, ADAPT and finally APPLY.

The best investment books are written in US context. Many people would just READ and then give the excuse that it's not applicable for Singapore market and not learn anything useful. Most likely, either they don't want to admit (even to themselves) they don't UNDERSTAND or is unable to ADAPT / APPLY (to local context).

(21-06-2012, 08:34 AM)KopiKat Wrote:

(21-06-2012, 12:23 AM)d.o.g. Wrote: .

2. There was a bull market during 2003-2006.

3. Historical volatility is high. I have never had an "average" year where returns were 20-21%. Sometimes it was much higher, sometimes much lower, even negative (2007, 2011).

.

I believe you are out of sync for 1 year. Bull Market lasted till 2007 (STI +16.63%). Very likely, your negative year should also be in 2008 (not 2007) when STI was -49.41%.

Yes, you are right. Not good to type so late at night! Have edited the original post.

I thought the returns should be inflation adjusted too.

(21-06-2012, 09:00 AM)KopiKat Wrote:

(21-06-2012, 08:37 AM)Jared Seah Wrote: "I guess reading investing books ALONE does not make one an investor"

Knowledge and Competence - same same but different.

http://singaporemanofleisure.blogspot.sg...tence.html

It's not just READ alone but rather, we need to UNDERSTAND, ADAPT and finally APPLY.

The best investment books are written in US context. Many people would just READ and then give the excuse that it's not applicable for Singapore market and not learn anything useful. Most likely, either they don't want to admit (even to themselves) they don't UNDERSTAND or is unable to ADAPT / APPLY (to local context).

IMO, If you start the value investing journey after you have sufficient life and work experiences, it help to "UNDERSTAND" it better, and more confidence to ADAPT / APPLY during practical time.

Value investing is not an entirely different skill/knowledge, compare with other skill/knowledge in life.

The same process is required, hard-work, always asking why and keep an overall view in mind, are key to acquire the skill/knowledge

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I had started quite early in year 2000, 12 years ago. But it is just a "hobby" with a minimum investing sum. Strategy then is "follow" what friend recommendations. . I did not spend much time on it, most of my time was invested in full-time job. The period is a "bull" time for my career, good bonus, promotions and huge pay raise Return from investment? Success at start, but lose almost all by 2004

The "real" investing started around year 2004 with investments mostly on Unit trusts, while starting to pay attention to financial news and did small analysis. I am lucky to invest in India/China funds then. I am still remember, in a specific period, it is ~10% per month. I need to re-check several time to confirm it is not a mistake.

I did not keep a detail record on the investment but a simple average return. From 2004-2007, my return is approx 6.5%-35% per year. Together with the new money invested, the fund increases very fast.

I started to practice value investing in 2008 during crisis, a simple average return are
2008: -29%
2009: +8%
2010: +11%
2011: -11%

I hope with more knowledge acquired, and sharpen the skill with experience, the return can be better.

Over the past 10 years, STI moved from ~1350 to ~2800 giving CAGR of ~8%. But it was a wild ride - see chart below.
Getting 8-10% cagr over this period would have been just in line with the market - a mediocre performance.
But anyone doubling this cagr or more over the past 10 years would have far outperformed the market and is an investor par excellence.

[Image: z?s=%5eSTI&t=my&q=l&l=off&z=l&a=v&p=s&la...&region=US]

(21-06-2012, 11:20 AM)swakoo Wrote: Over the past 10 years, STI moved from ~1350 to ~2800 giving CAGR of ~8%. But it was a wild ride - see chart below.
Getting 8-10% cagr over this period would have been just in line with the market - a mediocre performance.
But anyone doubling this cagr or more over the past 10 years would have far outperformed the market and is an investor par excellence.

If it were 2007 now and we were having the same conversation, anyone doing CAGR of 30%-40% for the past 5 years ie. from 2003-2007 would be considered mediocre!

(21-06-2012, 11:20 AM)swakoo Wrote: Over the past 10 years, STI moved from ~1350 to ~2800 giving CAGR of ~8%. But it was a wild ride - see chart below.
Getting 8-10% cagr over this period would have been just in line with the market - a mediocre performance.
But anyone doubling this cagr or more over the past 10 years would have far outperformed the market and is an investor par excellence.

[Image: z?s=%5eSTI&t=my&q=l&l=off&z=l&a=v&p=s&la...&region=US]

This is why to obtain satisfactory investment results (8-10%) is easy since the average defensive investor can just buy and hold ultra low-cost index funds/ETFs.

On the other hand, to achieve superior returns (>15%) would require not only incredible skill, but also significant time and effort and perhaps, luck.

I had not actively monitored my portfolio return(too much of a hassle) but I had started to monitor my investible assets(exclude flat and CPF but includes idle cash) since 1st Jan 2004. So, since 2004(around 9.5 years till date, my assets(investments + salaries) is compounding at an average of 36% annually. In simple term, I have 18x the investible assets now as compared with year 2004.

The wide ride over the years can be rather heartattacking. In one or two years, my investible assets could double and in a bad quarter like 1st quarter of 2009, the asset washalved.

It is quite an amazing investment journey for myself.