How to do practical best practice value investment research as a retail investor

[wahkao]

How to do practical best practice value investment research as a retail investor

Hi Everyone,
How do you do your investment research? I tried to do it myself but there's just too much information overload.

-The annual report alone is 100 pages long!
-News come everyday and each news you have to collect and analyses to ensure your investments are still good. How do you actually make decisions base on these news?
-To obtain the The financial data you have to go through years of 50 pages of quarterly reports. Bloomberg has these data but its so expensive for the retail investor. Sometimes I am doubtful those data are accurate or updated.
-How do you know the stock is indeed a value stock and will indeed go up in future? Where do you find the data/evidence to support its value?
-Example Like Economic Moat. How do you actually see economic moat? Look at Patents? Do it like a marketing manager and examine the 4Ps? Pretend to be a customer, Call up the company and make a visit?
-Good Management is also important, how do you determine if they are indeed good management? Google up the directors, CEO and CFOs's backup and look for shady history? They probably wont even be published.
- What's important. what's not important?

How do you indeed do value investment research?

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[wahkao]

I first started with Google's stock screener, sadly I have doubts on using those data
I doubt its even updated. They did not even define what kind of PE they are showing. Forward PE? Historical PE? Rolling PE?Rolling PE adjusted with today's last done price? Are the earnings full year or rolling 4Q?

Here's google finance PE ratios VS the correct PE ratio that I hand calculated by grabbing the figures off the financial reports.

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[CY09]

For me, I read worthy forums and see the analysis various forumers give. Then do my own analysis and forecasting; and see if I agree with them.

Sometimes you cant screen every stock, you will need to stumble upon these stocks through credible sources.

[wahkao]

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I think this is pretty easy. Researching on these 4 points isnt too hard since its always written in the annual report.
Can I trust the annual report? Perhaps the director had something shady in the past that spoils his/her track record, I dont think annual report will objectively write this piece of information down?

[wahkao]

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Economy analysis:

Which website do u guys obtain GDP growth rates? My first thoughts would be to go Singstats and extract data
http://www.singstat.gov.sg/statistics/br...ounts.html

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Maybe the medical industry has been growing since 2009. Should I invest into Singapore's medical industry looking forward?

[felixleong]

If you really have the passion for investing, then spending time to read annual reports should be a leisure and not a daunting task.

I generally try to spend at least 2 hours a day reading annual reports and research reports, this slowly helps me to build a mental "database" in my mind.

As you slowly flip over the stones one by one, once in a blue moon you will see gold!!! The moment you see a good deal, you will know its a good deal!
You just keep digging deeper and deeper to make sure that of your information, logic and understanding is correct.
Finally you put in your $$ and hope you're right with your analysis.

Btw what I described is a bottom-up approach, which is also how I spotted Challenger Technologies and it became my best performer ^^

[Stocker]

1.Good management
2.Sustainable business
3. Entry level on financial ratios.

[chialc88]

Wahkor,
I found your questions very interesting.

These questions are like model questions aka if I am a lecturer/teacher, I will ask during tutorial or exam.

There are model answers available from different investment books...most of them very famous reference... these questions is to encourage the students to read the book so that they can pass the exam (or nicely put...learn something useful)

The most funny things is you seems to have the model answer when you asked these questions...

Forgive me... it's my feeling.

Ok, back to your questions...
I usually research the company after reading d.o.g. posts.(and Amoung other forumers- to be politically correct eg ghchua)

Most of the time, I don't do anything after research... I just wait patiently for the right climate ...
This is because I have a strong instinct to avoid any tips or hot stocks that's the play of the month... Even it's the best stock...I will keep at arms length distance.

Funny thing is, after I research, occasionly, I go against the person view. Not because I don't respect him but rather I see that we had difference investment style.



Enjoy as VB is definitely more colorful with you and Candy168.






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