Wednesday, January 19, 2011

I am not a value investor

If anybody asks, I am not a value investor. Although I tend to look for stocks with low liquidity, my record shows that I tend to put my money on growth or cyclical stocks. Of course, as long as the market is battered enough, any stock will be undervalued. But my purchase of C&O Pharma sometime ago, shows that I get easily excited by the sight of growth stocks.

What about Auric Pacific? Is not it a value stock, considering that it is trading at a steep discount to its book value and has a huge stash of cash? While the traits may point towards Auric Pacific being a value stock, the catalyst for my purchase, was the company going into real estate. If its core operations return to good health, particularly its Delifrance outlets, upside will still be limited. It was only when it made concrete steps towards establishing a real estate fund, that I took action.

Food for thought: if you find a stock that looks remotely undervalued, but buy it for growth prospects, are you still a value investor? My preliminary thoughts are that the dichotomy between growth and value is very blur, intention/rationale is more important that aesthetics of the stock.


  1. Dr Michael Leong said: "Fundamental investing is really about getting multi-baggers."

    Do you have a few multi-baggers?

    If you have, then you are a fundamental(value) investor. LOL

  2. hey createwealth,

    i do not quite agree with what Michael Leong said. I believe fundamental investing is about trying your best to pick good sound companies.

    Stock picking, regardless which school you belong to, is ALL about getting multi-baggers... lol

  3. But, it is hard to pick multi-baggers by TA.

    Have you chanced upon any TA bloggers saying that they are holding multi-baggers over long run? Their trailing stops will trigger their exit.

  4. nope... i have yet to use TA.. i probably use tikam analysis... cause my charts are all free to public, i wont get an edge.

    But i understand what you are trying to say. the gains from TA have to be capped, to prevent unlimited losses as well.

  5. Value and growth are joined at the hip, actually.

    If you do proper research before buying, and emphasize safety of principle (margin of safety) and an adequate return, then yes you can be considered a value investor.