but the current value investing sifus like buffett and lynch said that 3-5 shares is enough diversification for individual investor.lynch said that in his book and if u check buffett's portfolios, it is more focused on few companies. the ideas is put ur eggs in few basket's and watch your basket
Warren Buffet can walk into any company to check its account and talk to the management but we as retail investors can't. It has happened so many times already in Malaysia where companies announced fake results. I'd rather trust the financial results of Singapore companies than those of Malaysia companies simply because LKY doesn't allow corruption to happen in Singapore. Has any retail investor ever sued Transmile and Megan? The directors of these 2 companies are big time con men.
i dont think there's only 5, but if u keep your portfolio smaller u can spend more time to study the business and management of the company in the sense of qualitative factor as quantitavitely, first year accounting can do it.in the end of the day, the essence of value investing is:
1) buy company as a business, the simpler thr business the better 2) look for good and honest management 3) find company with wide moats
if u do enough homework to find company this 3, no matter in malaysia or singapore, or any other place in the world, it will be a good investment. and the end of the day, figures in financial report is not the main thing to look at, it's just something that give jobs to accountant
plus, u really believe no corruption in singapore?
I like the 2nd condition most, comp. with good management ,can make money; honest, can take care of the profit well such as keeping some for the growth and giving some back to the shares holders as dividend which is more as an assurance that the management handles the profit properly. Some CEO keep all the profit in its coffer and manipulate it to their advantage that is why we have to look for companies with PROPER payout ratio, not because we must have the dividend but as an indication to the good and honest management.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....