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Lessons from Investment Mistakes

Brake!Some of you who follow my personal page will have read about a fault that recently occurred in my car, whilst on a long holiday! Well that was a bummer because we were told there was a risk the brakes would not work (disaster!) and we were not sure when it could get fixed (how now?). And how to get our caravan home across the sea?! But we can stay positive and make do with what we have.That included getting a rental car to get around, get some homework done, etc. And wait...That got me thi...

January 15, 2021

Don't water the weeds and cut off the flowers (of your investment garden)!!

"Selling your winners and holding your losers is like cutting the flowers and watering the weeds." Peter LynchI was sharing this with some of my investment mentees recently. There is a popular concept called portfolio rebalancing where every set period of time, you will sell winners and rebalance your portfolio back to a set proportion for each stock. I can see the wisdom in that as a risk management tool.However, where I disagree is if you sell a stock just because it has gone up in price and n...

January 8, 2021

Ruth Truth 9: Working for a day's wage

"She came into the field and has remained here from morning till now, except for a short rest in the shelter." Ruth 2:7 Well, I've written quite a few "inspiration" type posts but today is a bit more sober. We all want to be financially free, to have a good life etc and there is nothing wrong with that.  The phrase that jumped out at me is "except for a short rest". Remember, Ruth is a young girl, and there she is, out in the hot sun, bending over and picking up leftover grain. Not exactly ...

December 13, 2020

Dividend Growth Investing

This is a quick checklist that you might find handy: 1. Track record 2. Earnings and cash flows  3. Growth rates and consistency  4. Expected growth rates into the foreseeable future 5. Are dividends growing in the past, and what rate?  6. Has it ever been cut? 7. Is the company making enough money to more than cover the dividends paid? 8. What is the future growth rate of the dividend? (tied to #3) There! A quick and simple guide to investing in dividend growth stocks. Of course,...

December 11, 2020

Hitting Investment Home Runs

How do you hit an investment homerun? In other words, to get a multi-bagger return?Simple! To hit a homerun, or to get a 10-bagger, you first need to let it become a 2-bagger.Then you need to let it become a 3-bagger, a 4-bagger....and so on and so forth.What am I trying to say?Don't be too eager to give in to the urge to take profit, because you are just shortchanging yourself when you are on to a winner. I've seen too many people take profit too early because of the urge to "bank profits" and ...

December 8, 2020

The Lion Chaser's Manifesto

Came across this in a John C Maxwell book on Leadership.At this stage of my life it is very tempting to get comfortable, coast, avoid troublesome projects / people, just enjoy the fruits of my labour.But isn't that akin to "dying" or allowing fear (wanting to avoid trouble) to rule your life?No.We are made with a PURPOSE. The struggle, trouble, problems that come from dreaming and embarking on new ventures will be the steps we climb in pursuing that purpose and dream.We might fail in reaching th...

December 7, 2020

Ruth Truth 8: The power of blessing

"...she happened to come to the portion of the field belonging to Boaz, .... Now behold, Boaz came from Bethlehem and said to the reapers, “May the Lord be with you.” And they said to him, “May the Lord bless you.” Ruth 2:3-4 Ok, last one from this same verse. Promise! Notice that Boaz and his men are BLESSING each other. I shared during an interview with Heather (the recording is some where in the FB group) how I went to a restaurant in Auckland and it was empty during peak dinner time....

December 6, 2020

A common Investment Mistake

Fun-Friday: Common Investment MistakeMany investors make this common mistake. If they sold a share, and it turns out they had sold too early, they like to wait for the shares to come back to their sell price before repurchasing.The flip side is even more dangerous. Many investors make the mistake of investing in the wrong company, and then wait for the shares to come back to break even before they get out.Do you know, that the stock market does not know, nor does it care, what price you purchase...

December 4, 2020

How does compounding work when you invest in the stock market?

It appears many people are not exactly clear about HOW compounding ACTUALLY WORKS when you invest. It is easy to see in terms of our bank deposits, where we are paid interest upon interest and it just goes on (although it is just a pittance these days!) What about when you invest? When you invest in a company, how does that investment actually compound? The key is understanding how effective the company (actually its management) is in DEPLOYING THE CAPITAL it has on hand. Obviously, this depends...

December 2, 2020

Ruth Truth 7: Look for great leaders

"...she happened to come to the portion of the field belonging to Boaz, .... Now behold, Boaz came from Bethlehem and said to the reapers, “May the Lord be with you.” And they said to him, “May the Lord bless you.” Ruth 2:3-4Still on the same verse for the 3rd week in a row!Remember, we are looking into Boaz. What might be the "secret" of his success? Last week we learned how he is a generous and gracious man who obeys the command to look out for the poor and needy among us.Today, notice...

November 29, 2020

Investment Lessons from Spring

I love drawing investment and life lessons from nature.Spring is a lovely season. It is full of life, new opportunities, growth. At the same time, it is quite unsettled and can be windy, even turbulent at times. At a time when plants are supposed to be growing, some branches get broken by the wind, pruned by nature if you will.Does the pruning serve a purpose?How do we take advantage of "pruning times" to grow?What investments can we prune, so that others may grow?Don't waste the pruning ti...

November 27, 2020

What to look for in a potential investment?

I'm often asked what to look for in an investment. My standard reply is:1. Great Company2. Fair PriceWhat qualifies as a Great Company?+ It generates high returns on capital+ Regularly Increase in earnings (or operating cash flow)+ Growing dividends (if you want a dividend growth strategy)+ Compound intrinsic value (a growing book value is a good proxy)Btw, that sequence is important, and actually logical. And it all starts with a high ROIC. Meaning, the capital allocation skills of the manageme...

November 25, 2020

Incredible Journey to Mortgage Freedom

This is the recording of the interview we did with Bourne and Brittany and we had so much fun! There was SO MUCH GOLD in what they shared! Definitely worth a listen! Bourne is only 32 and Brittany 28 but they have paid off their house mortgage this year! Their journey?- Bourne had $24k in debt 5 years ago when they got married- He started on almost minimum wage, and actually lost his job!- They bought the house they live in now about 3 years ago, and it is in a very nice suburb - 3 years later, ...

November 24, 2020

Ruth Truths 6: Being gracious

"...she happened to come to the portion of the field belonging to Boaz, .... Now behold, Boaz came from Bethlehem and said to the reapers, “May the Lord be with you.” And they said to him, “May the Lord bless you.” Ruth 2:3-4We all know in the story that Boaz was a wealthy man. That is why he was able to redeem Naomi's land and also have workers under him.But notice that he was obedient to the commandment to not pick everything from his field. He obeyed the commandment to leave whatever ...

November 22, 2020

Investing in the Past Tense or Present Tense?

It is easy to get excited about how a company has done well and therefore chase winners. Indeed, good historical financial results will form the basis for shortlisting what could be a great company. Good results show a company has DONE well. Its moat tells you whether it will continue DOING well. Of course, the above only answers the 1st of 2 questions I always ask. WHAT to invest in. There is still the PRICE to pay (ie valuation). Are you living in the PAST TENSE, or investing in the FUTURE T...

November 18, 2020

Ruth Truths 5: Right Place Right Time - The importance of favour in your career, business and investments

I seriously cannot contain my excitement when I read the book of Ruth. It seems I can't read more than a few verses before it seems to jump at me and we're only scratching the surface! "...she happened to come to the portion of the field belonging to Boaz, .... Now behold, Boaz came from Bethlehem and said to the reapers, “May the Lord be with you.” And they said to him, “May the Lord bless you.” Ruth 2:3-4 Of ALL the fields, the field of Boaz. Of ALL the times, at this TIME, when Boaz h...

November 15, 2020

Looking for good management

How do YOU gather information about companies that you want to invest in? For me, QUALITY of management is very important, but there is an art to it as well. What do I mean?I list some of my properties on AirBnb and just received the following email that was sent to all hosts : https://loom.ly/J6hJE40.Also check out this letter sent to employees in May this year: https://loom.ly/9-ruOK0Serious, go read the letters. Why am I highlighting a letter from a CEO? This company isn't even list...

November 13, 2020

Not taking risks is now risky

"Not taking risks is now a risky strategy." Cameron Bagrie True, but take sensible risks. Don't rush to invest blindly. 1. Know WHAT you are investing in. 2. PRICE it properly. Is the challenge you might be facing a risk you should consider taking? How does it turn from a challenge into an opportunity?  Bless you! You can: Get free training: https://bit.ly/JF-TrainingPage Join the conversation at: http://bit.ly/FaithFinanceGroup Get more articles like this: https://www.joshuafong.com/ ...

November 11, 2020

Ruth Truths #4: What's in your hand?

"And Ruth the Moabite said to Naomi, “Let me go to the fields and pick up the leftover grain behind anyone in whose eyes I find favor.” Ruth 2:2 I love this verse! Ruth and Naomi are now back in Bethlehem, having no fields or any form of livelihood. But Ruth does not sit still, waiting for a handout! She is now actively looking for some way to provide for herself AND her mother-in-law. She is not wallowing in self-pity, instead she looks at what she CAN do. I especially like the 2nd part of ...

November 5, 2020

How does TIME factor in investment decisions?

Time! One of the most important four letter words for humans!  Today, I want to introduce you to 2 very simple but extremely time related questions I ask myself before I make any investment. And they are super easy questions! Question 1: Am I willing to hold this investment / company for at least 10 years? Well, if you are not willing to hold it for at least 10 years, you shouldn't be holding it for even 10 minutes!   Implicit in this question is that:- It is high quality- It is s...

November 4, 2020

Ruth Truths #3: Will you flee or cling?

"...and Orpah kissed her mother-in-law, but Ruth clung to her." Ruth 1:14As mentioned previously, names are very significant in the Bible. They often give us deeper insights into meanings etc. Here, Orpah means gazelle whilst Ruth means friendship.  Remember Elimelech and his 2 sons have now all died, leaving behind 3 widows, Naomi, Orpah and Ruth. In those days, it was bad enough to have a famine. As a widow, you literally have no one to take care of you and will often be bullied. Alt...

November 1, 2020

Should we "Invest" in Luxury Goods?

I was recently asked this question! And it's actually a good one, so please don't pre-judge the question. :) Also, there are several layers to the question.  Let's take a step back, and first define what a luxury good is. It's definitely not a "need". It is probably very high quality and expensive. A handbag could be a need if you need it for work purposes and just getting your stuff organised. A Prada handbag would be a luxury as you don't really need a branded one.  But hold on. What...

October 29, 2020

How you can get a "regular paycheck" as an Investor

How many of you got "paid" to be a shareholder recently!?  One of the companies I bought (please, not a recommendation to invest in this or any company mentioned) during the sell down just paid its quarterly dividend (again) on 15 Oct and it actually INCREASED from the previous payout. At this rate, the gross yield on purchase price is about 10% per annum. COVID? Some companies are able to keep on keeping on. :) That's the beauty of investing:- No headaches- No worries about sales or invent...

October 27, 2020

Provision, Sowing and Reaping

“Then this shall be the sign for you: you will eat this year what grows of itself, in the second year what springs from the same, and in the third year sow, reap, plant vineyards and eat their fruit." Isaiah 37:30 The context of this verse is that Judah, at that time King Hezekiah, was surrounded by the Assyrians. Just imagine being surrounded by a vast army, running out of food and water, low in morale. Feels like covid? I think it was easily 100 times worse! But check out the prom...

October 25, 2020

What matters most in investing?

"The big money is not in the buying and the selling, but in the waiting." Charlie Munger Seems easy eh? Unfortunately, that is one of the most difficult for many people because we are "wired for action". We want to be in control, be doing something. As if in doing SOMETHING, we could make our investments go up faster.  In all my years of investing, one of my biggest regret has been not holding on to great companies once I found them and invested. If you are early in your journey, don't repe...

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