Technologies stocks are naturally fall into my current Circle of Competence due to my profession. Telcos and manufacturer of high-tech products are fall into this group.
Blue chip stocks with easily understood business model e.g. SPH, SingPost are also in my portfolio. The stocks serve as "semi-bond" or fixed income allocation of my fund
I am increasing my Circle of Competence into retail business recently. Reading books, doing research via Internet and reading AR of relevant companies. It is always interesting to learn more and be enlightened.
To expand on the "Attend AGM" option. I bought a small stake in Food Empire. I was interested in what they were doing in Russia and Ukraine. Then I realised that their strength was in branding. Just like Mcdonalds doesn't make the best burgers, nor BMW the best cars, but they have "brand value" - similarly MacCoffee, Food Empire's flagship brand, had a lot of mindshare in Russia and Ukraine. Customers will pay extra for that brand. Good right?
Then at one AGM, the CEO explained why advertising and promotion expenditure was so high. He said that the market is so competitive that they had to spend money to stay highly visible to the public. They sponsored car races, figure skating competitions and other events so that if you are a Russian, everywhere you go you see MacCoffee. I decided that this was not really a good model, because that meant that the brand value had to depend on a constant and high expenditure on A&P. So I divested.
Similarly, I realised that this was not just a coffee/snack company. It's strength was in branding and distribution...
More on distribution. When they penetrated the Russian market, they shared that they had to go to the mom-and-pop stores, and give the retailers an incentive to display their coffee prominently. They did not sell a pack of 20 coffee sachets, but instead they sold individual sachets for a few cents (rouble equivalent). Why would a retailer want to put your coffee in the top (most visible) shelf? They also realised that the big boys didn't have access to rural areas (and were not interested). So they started rural first. Then when their brand gained traction, they went into the big stores. Today they are fighting Nescafe. How to fight?
Anyway, most of these are from reading up, on internet, The Edge magazine, SI magazine, etc. Spend a few dollars to get 'intel' - it pays back many times over. If you are frugal,there are ways to get it free (library has Edge, some brokers give SI free to regular customers).
Quote:Currently I am working to understand retail and luxury goods better...
For luxury goods, I found Richemont's transcripts informative and entertaining, especially the CEO's Q&A sessions. Attached were the ones I could find. You can also get the book 'The cult of the luxury brand' from NLB - easy reading.
I like the luxury market because there are a usually a few big players (eg: richemont/swatch/rolex for watches, diageo/pernod-ricard for alcohol, LVMH for handbags plus everything). Luxury brands build a moat over time through enforcing pricing, controling the retail experience, and plastering advertisments everywhere. Do it consistiently for 5-10 years and you can become both exclusive and ubiquituous.
They key thing, I think, is never to 'cheapen' the brand by going on sale or diluting it, for example: Gucci holds sales every year, so is less of a luxury brand then LV. Armani is now everywhere, on casual clothing with Armani Exchange and Armani Jeans - unlike in the 90's, no one is going to say 'wow...Armani' anymore. These things increase earnings in the short term but damage the brand long term. If you dont follow all these brands, ask your wife!
You don't have to be interested in luxury goods to understand the industry, like you dont have to smoke to understand the cigarette industry. Luxury markets are dominated by a few big players, with some barriers to entry, and have zero innovation, and (for many people) fufill a basic psychological need. Where better to find buffet-like companies?
I wait until there is money lying in the corner, and all I have to do is go over there and pick it up.
Jim Rogers
Yes! i think some luxury brands price themselves so exclusively expensive that only exclusived people with money (like hell money) to burn can afford to buy. Normal consumers may not even have seen or heard about it.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
(16-10-2012, 01:46 PM)Temperament Wrote: Hi etan, do not be discouraged about making back money you have lost. Actually you have your lifetime to invest to make back. How old are you now? I am going to be 65 soon and i started investing only at 40 year-old. (Everyone "old" in this forum will know) And as long as my wits live with me, together we will invest.
This last 2008/2009 Big Bad Bear pawed my stock portfolio down to about 50% at once stage. Now 2012 not only i recover my losses, i make some money too. If Mr. Market keeps on going North, i will keep on unwinding my position as i travel with Him. If Mr. Market suddenly decides to take a fighter plane and dives South, i am prepared to go with him too.
Another words be prepared for all eventualities Mr. Market throws at you. This then is my investment's "principles".
May you recover your losses.
Amen.
Hi Temperament,
TQ for your kind words!
I don't actually put in too much into stocks nowadays.But I am just as happy to be in 'good company' here esp when I see investors making wise choices with their money. I am into my fifties! I have much to learn from you! Oops! I am oready off-track from the thread!
(16-10-2012, 01:46 PM)Temperament Wrote: Hi etan, do not be discouraged about making back money you have lost. Actually you have your lifetime to invest to make back. How old are you now? I am going to be 65 soon and i started investing only at 40 year-old. (Everyone "old" in this forum will know) And as long as my wits live with me, together we will invest.
This last 2008/2009 Big Bad Bear pawed my stock portfolio down to about 50% at once stage. Now 2012 not only i recover my losses, i make some money too. If Mr. Market keeps on going North, i will keep on unwinding my position as i travel with Him. If Mr. Market suddenly decides to take a fighter plane and dives South, i am prepared to go with him too.
Another words be prepared for all eventualities Mr. Market throws at you. This then is my investment's "principles".
May you recover your losses.
Amen.
Hi Temperament,
TQ for your kind words!
I don't actually put in too much into stocks nowadays.But I am just as happy to be in 'good company' here esp when I see investors making wise choices with their money. I am into my fifties! I have much to learn from you! Oops! I am oready off-track from the thread!
One of my close relative, who's 56 this year, only started getting into stocks a couple of years back. Started with trading, lost some $$ and quickly switched mostly to investing + some trading. Also started learning how to blog (a private one for some of us to comment). Doing ok as able to learn how to do some research before buy/sell, rather than previously following 'hot tips' from traders.
The point I'm trying to make is, 50s nowadays is considered not old as average life span is 80+...Also, never too old to learn...
Hi etan,
Please don't say that. We are here really to learn from anyone / each other willing to share their knowledge and experiences, good or bad. For me i am here to listen to everyone but believe in myself. Don't worry about slightly off-track in order to learn.
Don't think we should talk about $$$ alone here but all connected directly or indirectly with $$$ too. There are already many Experts here who can analyse an annual report to whatever level you like to know. i am afraid i can't do that. i can only do a little then i am "pengson" already.
Me only here to listen and then believe in myself.
Of course sometimes i talk rubbish here but i qualify first that it's only my opinion, which may not backup with facts
It's up to you to share yours if you have a different one.
Cheers!
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
17-10-2012, 10:34 AM (This post was last modified: 17-10-2012, 10:38 AM by etan.)
(17-10-2012, 10:14 AM)KopiKat Wrote: One of my close relative, who's 56 this year, only started getting into stocks a couple of years back. Started with trading, lost some $$ and quickly switched mostly to investing + some trading. Also started learning how to blog (a private one for some of us to comment). Doing ok as able to learn how to do some research before buy/sell, rather than previously following 'hot tips' from traders.
The point I'm trying to make is, 50s nowadays is considered not old as average life span is 80+...Also, never too old to learn...
Yes, so long as we are able-bodied, we must learn to take care of ourselves in every respect, including de-learn and re-learn to keep up with the times! Must have the right atitude towards life. Every day wake up with full of energy, as if there is a million dollar note lying somewhere around waiting to be picked up, ahaha! Thanks KopiKat!
(17-10-2012, 10:29 AM)Temperament Wrote: Hi etan,
Please don't say that. We are here really to learn from anyone / each other willing to share their knowledge and experiences, good or bad. For me i am here to listen to everyone but believe in myself. Don't worry about slightly off-track in order to learn.
Don't think we should talk about $$$ alone here but all connected directly or indirectly with $$$ too. There are already many Experts here who can analyse an annual report to whatever level you like to know. i am afraid i can't do that. i can only do a little then i am "pengson" already.
Me only here to listen and then believe in myself.
Of course sometimes i talk rubbish here but i qualify first that it's only my opinion, which may not backup with facts
It's up to you to share yours if you have a different one.
Cheers!
Hi Temperament,
Sometimes, I think I can only create 'noise' here and there! But honestly, I really do enjoy the virtual company of everyone here!
(17-10-2012, 10:14 AM)KopiKat Wrote: One of my close relative, who's 56 this year, only started getting into stocks a couple of years back. Started with trading, lost some $$ and quickly switched mostly to investing + some trading. Also started learning how to blog (a private one for some of us to comment). Doing ok as able to learn how to do some research before buy/sell, rather than previously following 'hot tips' from traders.
The point I'm trying to make is, 50s nowadays is considered not old as average life span is 80+...Also, never too old to learn...
Yes, so long as we are able-bodied, we must learn to take care of ourselves in every respect, including de-learn and re-learn to keep up with the times! Must have the right atitude towards life. Every day wake up with full of energy, as if there is a million dollar note lying somewhere around waiting to be picked up, ahaha! Thanks KopiKat!
(17-10-2012, 10:29 AM)Temperament Wrote: Hi etan,
Please don't say that. We are here really to learn from anyone / each other willing to share their knowledge and experiences, good or bad. For me i am here to listen to everyone but believe in myself. Don't worry about slightly off-track in order to learn.
Don't think we should talk about $$$ alone here but all connected directly or indirectly with $$$ too. There are already many Experts here who can analyse an annual report to whatever level you like to know. i am afraid i can't do that. i can only do a little then i am "pengson" already.
Me only here to listen and then believe in myself.
Of course sometimes i talk rubbish here but i qualify first that it's only my opinion, which may not backup with facts
It's up to you to share yours if you have a different one.
Cheers!
Hi Temperament,
Sometimes, I think I can only create 'noise' here and there! But honestly, I really do enjoy the virtual company of everyone here!
Me too.
And not forgetting the very good job the Moderators have keep this forum most importantly, "enjoyable" for everyone. People here are really "open minded" to share. Thanks everyone of you
Thanks moderators!
Cheers!
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
(17-10-2012, 10:14 AM)KopiKat Wrote: One of my close relative, who's 56 this year, only started getting into stocks a couple of years back. Started with trading, lost some $$ and quickly switched mostly to investing + some trading. Also started learning how to blog (a private one for some of us to comment). Doing ok as able to learn how to do some research before buy/sell, rather than previously following 'hot tips' from traders.
The point I'm trying to make is, 50s nowadays is considered not old as average life span is 80+...Also, never too old to learn...
Yes, so long as we are able-bodied, we must learn to take care of ourselves in every respect, including de-learn and re-learn to keep up with the times! Must have the right atitude towards life. Every day wake up with full of energy, as if there is a million dollar note lying somewhere around waiting to be picked up, ahaha! Thanks KopiKat!
I am also one of strong believer in life-time learning. During school time, we learned for survival. After we were survived, then we learn for self-fulfillment
Is there a life where you can enjoy (with learning), at the same time earning $? Value investing is the answer.
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