In conjunction with the International Women’s Day, I was invited by Tiger Brokers to share my investing stories and thoughts on the markets. I have extracted the sharing as below for ease of reading.
Also, wishing all women a Happy International Women’s Day!
Can you share with us your own investment story? What are your investment preferences?
The way I invest, which we termed it as Moneyball investing methodology, is built upon the idea of making the best return from our limited capital. You might be wondering what exactly Moneyball is! Our Moneyball investing approach originated from a true story of how Billy Beane, the general manager of the Oakland Athletics, turned their fortune around to build a winning baseball team using statistics despite the constraint of a limited payroll. We have found that such principles can well be applied to portfolio management too. While Billy Beane was looking to buy runs, as investors we are looking to make a good return on our limited capital.
How it works is that we employ simple statistical analysis on the stock charts to buy companies which are undervalued by other market participants and sell the ones that are overvalued to other market participants. The first step is to identify the right companies by analysing the fundamentals based on factors that are most significant for future outperformance. Then, the second step is to know when to buy or sell those companies by looking at specific setups on real time charts. In short, we exploit temporary market inefficiencies surrounding quality companies. And we do that through both stocks investing and options.
Trading stocks or options, which do you like better?
Well, it’s a really difficult choice to choose between whether I like investing in stocks or options more! It is akin to asking which is my favourite club to use when playing golf. But it is more about what do I need in what kind of situation or setup, not about which club or strategy I prefer, but picking the one that best fits the situation I am uniquely in. So I think what’s important is knowing when to be doing what. For example, when the market is heading a certain direction, and based on your current portfolio setup, which investment instrument would be more appropriate for you at that point in time.
Generally, women are less interested in numbers and finance compared to men, right? So why are you fond of dealing with numbers and stocks?
Indeed, there has been this longstanding conception that women are generally less interested in numbers and finance, but I would like to think that this is, and has been changing over the past decades. Sometimes, it could also be that the way women express themselves when it comes to money and finance matters are different from men. But increasingly, I do see that there are more women who are getting more vocal over finance and investment matters. In fact, I have many female friends who are interested in learning how to manage their money and investments, which is a good sight!
For myself, since young, I like numbers and don’t find them daunting and naturally as I got myself into a degree and job that is finance-related, investments and stocks are just not things that seem too foreign to me. But the biggest factor is that I realised how important it is to start investing.
Do your families know and support you in trading stocks?
Yes they are aware and are supportive of it. I have also helped my mum to construct her retirement portfolio using dividend investing as well.
Can you tell us some important lessons you've learnt when investing？
Initially when I just got started, I also had my fair share of mistakes, which include chasing after prices for stocks that I really want to invest in.
But that landed me in situations where I was frequently in a drawdown position (and yeah that got me worried too because I didn’t understand the markets well enough at that time) because I ended up buying when the prices were overly high and they eventually went through some corrections. What I learnt is that patience is key to succeeding in the stock markets. Never try to force an investment and chase after the stock prices. This is especially so because dips and corrections on average, happen almost every year. That gives us a lot of opportunities to be buying the stocks we want to invest in. We all know Warren Buffett. He is one the best examples of investors who does not jump recklessly into the stock markets. He only buys stocks when they are selling at good discounts.
Do you have any insights on recent market fluctuations?
Inflation may not necessarily be bad for the stock markets. Why I say so is because inflation can also be an indication that the economy is now recovering well, and it is growing with a higher level of economic activity. So when consumers are buying more, businesses are going to be doing better. And if businesses are doing better, their earnings will increase, their cash flows increase, so will the valuation of the businesses and this can then translate to higher stock prices.
There have also been historical statistics which shows that in the past when there were interest rate hikes, the S&P 500 still managed to do well and delivered a positive return.
What investors have to recognise is that in the very short term, there’s going to be volatilities, there’s going to be fluctuations. Because the stock market is irrational. But don’t be scared off by what you see right now because based on what history has told us, the stock markets fared well even during rate hikes, and inflation over the mid and longer term. And if you learn to invest in the solid businesses which have strong pricing power, you will be fine.
On the Russia and Ukraine conflict, I am of the opinion that if you are invested in companies or markets which do not have exposure to Russia or Ukraine, you do not have to be worried. The question always goes back to: “Does the event affect the fundamentals of the businesses that you are invested in?” We can ask ourselves, “Would the earnings of the companies we are invested in be significantly impacted from the Russia-Ukraine conflict?”
In fact, on the day when Russia launched the attacks in Ukrainian regions, many investors thought that it would be a bearish day for the U.S. stock markets, but we saw how the U.S. S&P 500 managed to close that trading day with a bullish signal. And the day after on the Friday, the prices closed up higher than the previous trading day. So if we can learn to ignore the noises in the stock markets and continue to be invested in the good businesses, we will be able to do well in the stock markets.
So, if to put it shortly with several words or sentences, what changes do you think investing has brought to you?
Investing has taught me that once you know what you are doing it is important to stick to your guns and stay the course. But at the same time you need to be humble enough to plan in a way that you never say never to the markets. Anything can still happen although most of the time things may pan out according to your script.
How did you know Tiger Brokers?
I know of Tiger Brokers through its social media. The app interface is user friendly and has a wide range of content for investors. As one of the content creators on Tiger Brokers, I like how I can even post videos and not just limited to articles. I feel this can help investors who want to learn by providing them with contents in various forms.
What's your plan for IWD? Do you have any wishes for the IWD?
As boring as it may sound, I would probably be spending the day like any other typical day.
Because the empowerment of women and the work towards women’s equality is a progressive milestone for us so I think the celebration of achievements would also be progressive in that way as each new milestone is met.
What would you like to say to female Tiger friends in our community?
To all the female Tiger friends, kudos for taking the first step to managing your own investments. Never let anyone put you down or doubt your ability to accomplish more in your finances and investments. Quoting Michelle Obama, “There is no limit to what we, as women, can accomplish.” Happy International Women’s Day!
Original interview was published on Tiger Brokers App on 7 March 2022.
Chief trainer of The Moneyball Investors Playbook program and founder of The Joyful Investors, a financial education firm that seeks to help avid investors learn to invest better and make the journey a joyful one. I graduated with a first class honors in Bachelor of Accountancy from Nanyang Technological University (NTU) and started my auditing career in one of the Big Four. I believe that once we know how to build our wealth sustainably, we can then live our best lives ever.
This document is for information only and does not constitute an offer or solicitation nor be construed as a recommendation to buy or sell any of the investments mentioned. Neither The Joyful Investors Pte. Ltd. (“The Joyful Investors”) nor any of its officers or employees accepts any liability whatsoever for any loss arising from any use of this publication or its contents. The views expressed are solely the opinions of the author as of the date of this document and are subject to change based on market and other conditions.
The information provided regarding any individual securities is not intended to be used to form any basis upon which an investment decision is to be made. The information contained in this document, including any data, projections and underlying assumptions are based upon certain assumptions and analysis of information available as at the date of this document and reflects prevailing conditions, all of which are accordingly subject to change at any time without notice and The Joyful Investors is under no obligation to notify you of any of these changes.
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