Over the years, we’ve written articles on some of our favourite stocks in Asia and the U.S., and why we thought they were great investments at that point in time. Here are some of them.
For example, we’ve been a huge fan of BreadTalk since 2012 when we bought its stock at 49 cents. As of 21 May 2018, BreadTalk is trading at $1.80 – a return of 267.3%. We held on through its ‘fresh soya milk’ saga in 2015 (remember that?) and we’re still holding on today because we think it’s a company that has a scalable business model, strong growth factors, and a good management team in place.
Chart: Yahoo Finance
In 2017, we made 45.1% returns on ARA Asset Management which we were actually unhappy about because we thought the stock was being privatised at too low a price. You can read more about why we rejected ARA’s privatisation offer of $1.78 which, unfortunately for us, was approved by the majority of shareholders in the end. But at least we still walked away with a tidy profit.
Over the last 2-3 years, we’ve also invested in more companies (that we’re still holding onto today) that have given us great returns including Premier Marketing (+53.1% returns), Greatview Asceptic Packaging (+36.3%), Dairy Farm International (+60.6%), Apple Inc. (+97.1%), and Facebook Inc. (+42.2%).
We’ve been able to make good returns on our investments because these companies have great business models with high growth potential – and, most importantly, we only bought when the stocks were trading at a relatively low price.
So how were we able to spot these opportunities and decide if they were worthwhile investments at the right price?
We used a system called the Investment Quadrant which basically looks at four areas of a company:
- Business – is the company’s business model resilient and scalable?
- Management – is the company’s leadership trustworthy and competent?
- Financials – is the company’s financial performance strong and consistent?
- Valuation – is the company’s stock price significantly cheaper than its valuation?
We invest in a company when it meets the criteria in all four quadrants.
For example, you could say that Nike Inc. passes the first three quadrants – it has the dominant position in its industry, brilliant leadership, and is making money hand over fist. But if you ignored its valuation and invested in Nike at its peak in 2015 at $67.17, you’d only be breaking even now.
The Investment Quadrant can also be used to avoid potential loss-making investments.
In 2015, we covered ‘The Battle of the Telcos’ when the news announced that Singapore was welcoming a fourth telco. We used the Quadrant to evaluate the business models of the three local telcos – Singtel, M1, and StarHub – and determined that, although all three incumbents would be affected, M1 would probably fare the worst in the years to come. M1’s stock has fallen 55% since then.
(If you’re interested to know more, we also appeared on national radio on Money FM 89.3 this year to chat about Singtel, M1, and StarHub.)
Are you able to stay on the path?
The reason why many people lose money in the stock market is because they don’t have a consistent set of logical rules to buy or sell a stock. Instead, they base their decisions on market rumours, speculation, or emotion. (“I just have a feeling the share price is going up!”)
Viewed like this, these ‘investors’ are no different from gamblers and the stock market becomes a glorified casino. And, remember, the house always wins.
However, investing can be extremely profitable – if you stick to a system. Because the system sets a path for you to follow – a path of logical steps that lead you to a set of consistent results:
All you need to do is to stay on the path.
Now, quite clearly, to follow the steps above, you need to know where to find this information, how to analyse it, and when to act on it.
Which is where we come in…
From now until Sunday, 27 May 2018, we’re accepting membership applications to join the Investment Quadrant 2.0 training programme. This is for a limited time only.
Investment Quadrant 2.0 is an online training course that will equip you with the skills and tools to identify high-quality value stocks with strong growth factors that are likely to financially perform in the next 3-5 years and beyond.
You’ll understand the risks you need to watch out for in any company, and how to do a stock valuation so you know the best times to enter and exit a stock for maximum gain.
Besides the online course, you also get to attend a LIVE 1-day workshop — 9AM to 7PM — where you go through the entire Investment Quadrant system in a physical classroom setting, learn additional case studies and insights, and interact live with your trainers and ask questions on the spot.
You have unlimited attendance to the live workshop.
It’s a marathon, not a sprint
Investing is like running a marathon, not a sprint. There’s no point speculating in the stock market hoping to strike it big next month, only to lose more money the next time you invest. As a successful investor, your aim is to be consistently profitable over the next 10, 20, and 30 years. That’s how to build lifetime wealth.
Knowing this, we’re here to support you for the long term, which is why you get lifetime access to the Investment Quadrant online course and unlimited re-attendance to the live workshop.
But that’s not all…
As part of your membership, you’ll also receive:
- Investment flow charts, checklists, and spreadsheets – to help you save time on your research and analysis
- Members-only question & answer forum — where you can directly reach our trainers anytime
- All future content updates to the course for free. (If you ask around, all our previous members get to access all these current updates at no extra charge.)
- 10 video case studies — on how we used the Investment Quadrant for real companies to make real-money returns in the stock market
You may wonder why we actually bother teaching our readers how to invest, when so many people out there would rather just follow the ‘right stock tip’ to make a profit.
The reason is simple.
We believe you’re here because you want to learn how to do this for yourself.
Because the moment you learn the life skill to successfully manage your own finances and investments, NO ONE can ever take that ability away from you — and you won’t ever have to rely on anyone else to make money from the stock market consistently. (Even us.)
Like the saying goes…
“Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime.”
So if you’re ready to take control of your own personal growth and financial future, then we are here to support you 100% of the way.
We hope to see you on the inside. 🙂
The Fifth Person
P.S. If you have any questions, feel free to contact us or ask in the comments below, and we’ll get back to you in a jiffy!