An Interview With "ozxinvest"

I have never met him. But I have always interact with him on InvestingNote and find him to be a very patient and disciplined investor.

It was what he wrote that make me notice him. Just read the messages he wrote below? Make you really want to invest right?

In addition, if you follow him on InvestingNote, you will realise that he is a very good investor as well. Almost all his counters have made significant gains this year.

In my view, he is more like a fundamental "story" investor. He invest when he believes in a certain "story" of a counter and he will ignore all noises until the "story" plays out. Once the "story" plays out, significant gains will be made.

My perception of him maybe wrong at the end of the day, but that's most probably because I am always so tempted to invest along with him whenever I read his "stories".

Without further ado, let's get straight to the interview questions and his answers!

1. Tell us more about yourself.

ozxinvest: I am into my mid-forties and unemployed, not because I am already retired, but I chose to quit my job years back to become a stay home parent and a homemaker.

I am also a retail investor. I didn't come from a well to do family and stayed in a rented one room flat when I was young, so living below my means isn't a difficult thing to do for me, and this somehow helps in my investing journey.

2. How did you get into investing?

ozxinvest: I started to play stocks during the dotcom bubble period year 1999. That was the time when almost everyone was placing a bet on the market and monitoring the teletext seemed to be a good past time to do. You just choose any stock that weren't moving yet and bet on it, chances of winning are good and of course good only until the bubble burst.

3. What is your investing style? Any idols?

ozxinvest: I don't use TA, because it's too abstract for me. My approach towards investing and trading is simple.

Firstly, I will normally LOOK for neglected stocks that have a sustainable payout and a near term catalyst, and preferably with relatively low/no debts.

Secondly, I try to AVOID speculative stocks and buying based on hope.

Thirdly, I believe that we should have a PLAN on hand for every situations, I have created a A-Z plans for buying and selling stocks.

With all these plans in mind and ready to EXECUTE, buying and selling become smoother and easier to decide.

For example,  if the speculation level of a stock I hold gets too high, I would consider selling it partially with plans B and R (book profits and reduce costs) or even do a plan E (Exit) first even if it seems like the sky is the limit. Or if a catalyst is nearing, I would go into rapid Plan A and O (accumulate and  build up an oversize position).

I believe in long term investing but that does not mean that I will buy and hold a stock forever. It just mean having a long term view on companies you have an eye on and buy it when it's cheap and sell it when it's necessary to bring down your overall costs on your portfolio.

I don't have a particular idol. John Templeton, Ben Graham, Warren Buffett, Charlie Munger, Peter Lynch, Philip Fisher etc, all are great investors to be admired. Locally, we also have a few investment bloggers who are successful and to look up upon. However, I think trying to know and understand myself and able to think independently is more important than trying to emulate the investing style of successful investors or traders, or try to follow or copy their trades or tactics.

4. What is your thought process when it comes to stock-picking?

ozxinvest: Ideas can come from anywhere, better if it is something we can see and touch, the first thing that comes to my mind when picking stock should be, if it's good but cheap: then why is it so?

It helps to look at past corporate actions and announcements, browse through the past ARs, google for past news and monitor the price action for some time.

If it makes sense, after checking my wallet, the next thought would be: should I buy it now or later? Then a few other factors will be taken into account, like liquidity, market sentiment etc. Pretty simple and common sense thought process but necessary steps to do.

5. What is your best investment and worst investment since you started investing/trading?

ozxinvest: My best investment in terms of quantum and % would be DBS ($10) bought in late 2008 together with the issuance of DBS rights and excess rights ($5.42) bought in early 2009. I placed all my bets on it during the GFC. I sold them in late 2009 ($14) for a 40% and 159% gain respectively, exclusive of dividends.

My worst investment in terms of quantum and % would be Ultro Tech (now renamed Ley Choon) using CPF fund bought in 2003 which was bought on tips and hope, sold in 2016 for more than 100% loss due to CPF and bank charges. I have left it in the CPFIS to remind me of my ignorance and stupidity and did not look at it anymore for a long time. In 2016, I decided that I no longer needed that reminder and at the same time I found myself even more stupid all this while to not sell it away as I was paying quarterly bank charges every year for holding a negligible stock value in CPFIS. So when you cannot let go of the past wrong mindset and refuse to see it from another angle, that stupidity will continue to follow you even when it doesn't hurt and seems to matter anymore.

6. How many stocks do you think one should hold for diversification?

ozxinvest: I think one should not be too fixated on how many stocks to hold for diversification.

Diversification itself is not just a number. It should be a long term process of accumulating different stocks cheaply and constantly reducing your holding costs through profit taking and dividends to protect your capital as well as growing it. The more stocks you can handle, the better.

7. Any thoughts about the current market situation?

ozxinvest: I liked how Charlie Munger described the stock market as the Pari-Mutuel System, "Everybody goes there and bets, and the odds change based on what's bet. That's what happens in the stock market."

I see lesser skepticism and more optimism in the current market, people are bidding up prices unreasonably even for loss making stock. Speculative activities abound. But no matter in what situation, we need to be realistic and prudent and ignore the missed boats because our means are always limited, and we should limit our bets according to our means.

8. Able to reveal which stocks are currently on your watchlist?

ozxinvest: The stocks I hold will always be in my watchlist, and I will also maintain a watchlist to avoid, and place some stocks that I am interested in another watchlist.

I don't think I want to reveal them as I am not sure if they will remain in the watchlist. I keep a record of my trades. I would also journalese the stock purchases and sales on a monthly basis in a particular post in InvestingNote, I would also make target estimates of the stocks I hold for fun. It sorts of becoming a habit for now.

9. Finally, any advice for newbie interested to get into investing/trading?

ozxinvest: I don't give advice but I could share some of my thoughts on investing and trading.

Have the correct mindset in investing, it's about money management, not a way to earn quick money or get your adrenaline rush.

Try to focus on things that you should not do, that will keep you away from unnecessary troubles.

Say no to margin or borrowed money.

Stay away from fishy companies and high yield investment programs (HYIP).

If you are keen on day trading using TA, think of how easy data can be obtained nowadays compared to last time when traders have to pay for trading data like metastock.

Ask yourself questions like these?

1. Do you think you can really beat the market consistently when there are so many traders using the same trading signals?

2. Do you think that you are smarter, faster, has an advantage over and got more means than the other fellow trading against you?

3. Do you trade for thrill or trade for a living?

4. Whenever there are massive losses and gains on a speculative stock, who do you think pay for all these?

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