2014年2月27日星期四

Shares Investment - Invest for the Future (Dec 2013)

To be frank, I'm still in the learning stage. This post may be a short note to me to remember why I want to invest in shares, and what is the necessary things to keep myself calm when things are not happening as what I thought.

There are thousands of reasons why you would like to invest in equities than other financial products, such as bonds, real estates, unit trusts, commodities / derivatives etc. Once the tools can fit into your investment philosophy, then you should keep on digging deeper to find out how / what's the best to keep your dream alive.

To me, Equities means being a partner (be it active/passive) of the the company's management that maybe the major shareholders too. In this case, if you are using passive approach, what your mind maybe is just to enjoy the dividend received / capital gain along the investment journey. It is easier for you than the management to liquidate all your holdings just to jump into another boat to continue your long term journey. In this case, I would imagine most of us (retail investors) are having lesser control of the company, and therefore demand lesser return from the management. However, if you have the long term investor mindset, the first few things you may need to find out from the management is:

  • What else have you done which any other competitor not yet?
  • What is your succession planing?
In fact, we should focus on what the group intend to do in next 5 years before we can decide to stay a longer term with him. I have seen some good companies can grow to great companies within next few years. The desire of success was in the DNA of the top management. They could make a bold decision with cautious execution plan on the long term strategy they made earlier. The most important part is the corporate finance, where the company could plan ahead of their investment plan, so that they will not facing any kind of cash flow problems, which would happen after the economy peak is over.

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