As stated in the last post of 2016, I am restarting the interview series. I will try to have an interview with an interesting investor every month in 2017.
For Jan, I will start with interviewing SG Thumbtack Investor aka SG TTI. If you have yet to read his blog, I urged you to do so soon.
I only knew about his blog after he sent me an email to exchange on a guest post. Right now, I constantly read his blog posts. They always amazed me. I will always have new enlightenment of the particular company and industry due to the details he goes into.
Without further ado, let's get straight to the interview questions and "SG TTI" answers!
1. Tell us more about yourself
SG TTI: I am a Singaporean male in my mid-30s, married with 2 young kids. I have a day job in the healthcare sector as a doctor. Concurrently, I am also the CIO for a privately held investment holding company that manages the assets of family and associates. When I'm not at my day job, I like to read about various industries and try to understand the world a bit more. I also love to travel, and make it a point to travel (for leisure) at least 3 times a year.
2. How did you get into investing?
SG TTI: I didn't get into investing, I think it got me. Initially I looked at investing as a way to get a nice passive income. Over time, my objectives have evolved and I'm no longer merely interested in passive income.
I'm interested in the feeling of going against the grain, finding something that the whole world seems to disagree with me on, and eventually and hopefully, being proven right. When a highly contrarian investment turns out to be successful, the feeling and positive energy I get from it is incredible.
This can only be achieved via a contrarian approach, and the confidence to stand your ground in the face of disagreeing opinions can only be attained by having a superior, in depth knowledge of the situation that most people don't have at that point in time.
3. Any thoughts about short term trading?
SG TTI: It's fun.
Not necessarily profitable on a ROI basis, but it sure is fun. The amount of research data that thus far proves that short term trading is unprofitable for the vast bulk of the participants over the long term, fails to recognize that it is a lot of fun and excitement. And when something's fun, people tend to pay less attention to the costs of doing it.
4. What your best investment and worst investment since you started investing?
SG TTI: My worst investment is in a HK listed company with Mainland Chinese management, Flyke International . It's the traditional Ben Graham type of company, valuations are dirt cheap. But I didn't count on the management to commit fraud and abscond with the company's money. I guess during Ben Graham's time, there weren't infamous Chinese management committing fraud to contend with. Or rather, he wouldn't be able to invest in any Chinese company in those days. I've written about this worst investment in SG TTI blog.
My best investment is always going to be the next one I'm going to make. I have to think of it this way. That's what will drive me to dig deeper and harder.
5. How many stocks do you think one should hold for diversification?
SG TTI: It depends on how confident you are in each of your ideas isn't it? If there's only 1 idea, but you've close to 100% confidence and the likely ROI will be extremely high, then the number of stocks you should hold is... 1.
That's the case for most successful entrepreneurs. They have the bulk of their net worth in the company or business they're managing.
For most other instances though, I think retail, active investors who spend a considerable amount of time managing their own money, should hold between 8-15 companies. Any more and it's a real challenge to manage your portfolio closely.
I'd also point out that the number of stocks you own is not necessarily a good barometer of diversification. I'd argue that 5 stocks across different industries and with different business cycles would be more diversified than 10 stocks of the same sector.
The other factor is of course, position sizing. You can have 100 stocks but if 50% of your portfolio is in 1 or 2 stocks, than it's hardly considered diversified.
6. What is financial independence to you?
SG TTI: Being able to live your life with a certain level of comfort that you want, without having to worry about how to fund that lifestyle. Unlike most people who focus on being frugal, saving up and investing to retire, I personally believe a balance is more important. Spending on certain luxuries (like travelling in my case) within your means, if you want them, is part of living. To me, accumulating wealth for the sake of it just makes life meaningless. I'd much rather accumulate experiences and memories.
7. Able to reveal which stocks are currently on your watchlist?
SG TTI: It is usually updated here monthly
8. Finally, any advice for newbie interested to get into investing?
SG TTI: Don't jump straight in. Invest in your knowledge database by buying books, attending courses, learning from the mistakes of others and spend the time and effort to refine your thought processes.
In short, learn more, think even more, but do less.
"SG TTI"'s Blog, SG Thumbtack Investor, is also on the my blog list at the side.
Hope you like this interview series and please do remember to like our Facebook page (T.U.B Investing) and follow me on InvestingNote.