I get this question once in a while and I thought I will cover it a bit.
How do you uncover good businesses? This question are usually asked after an investor new to active management reads up on financial ratios and financial statements.
They want to identify the truly good business in a country, say Singapore or a new place, Hong Kong.
Would they talk to someone, or find some very good paid screen.
I know of an investor. He is more successful than me. Turns out he is 9 years younger than me at 25. Knows almost all the companies on the STI to a very good degree fundamentally.
How the heck did he do it? Here is how.
Every day, if he is in idle mode he will go to this link > http://www.sgx.com/wps/portal/sgxweb/home/company_disclosure/company_announcements/!ut/p/a1/04_Sj9CPykssy0xPLMnMz0vMAfGjzOKNHB1NPAycDSwNLNwtDDxdw8J8Xdw8DC2cDYAKIoEKDHAARwNC-sP1o1CV-Icamht4hjoFmjiFhRp6O5pgKAgzACnwdwoODgszDHQ1hirA44aC3AiDTE9HRQCIGmn3/dl5/d5/L2dBISEvZ0FBIS9nQSEh/
That’s the SGX Announcement page
So what he will do is go through each of these announcement one by one or those that he has not seen before. If it’s a results, he will see if the financials look good. If its an acquisition or divestment he will read it through what its about.
He will do this 2-3 times a day.
If you do that for 2 years, you probably will know the companies listed pretty well.
Is that a chore? Are there easier methods? No one says to be successful, its going to be easy.
Before you taste that safe passive income stocks you got to know that doing this “passive” thing can be rather active in the first place if you want to do it well.
How the heck does he do something like that daily?
I don’t think you question whether brushing teeth or bathing is a chore. You have a knowledge as to why brushing and bathing is necessary for you and your parents put you through the system of doing that every day until to you it becomes a habit.
Even if you don’t want to do it, you will feel weird.
That’s how he did it. No one says its gonna be easy at the start. Good and necessary things take time to build up.
You know building wealth and achieving results is necessary, and Warren Buffett have provide the greatest advice in his system which is to read more. Just read as much as possible. That is the knowledge from a proven source.
I met up with someone who was taught by Todd Combs, one of the guy brought in by Buffett to run Berkshire’s investments.
His one advice? Just be a ferocious reader.
How do you go from not reading anything to reading so much? You simply pick up a book daily and read. Fix a time, 1.5 hours every day at this time and just read. Put your books in visible places.
You simply want to be successful enough you will do it.
One of my reader told me he will read a single article from me daily. It’s a bit flattering but at least he sets a system for it.
If you think this 25 year old guy is extreme, the manager at value hedge fund Lighthouse advisor, when asked how does he cover Hong Kong which is a new place for a Singaporean?
His answer was that if you have gone through the HKSE announcements in that manner you would have screen out which are the companies that fits what you are looking for and which are the ones that do not.
So I wonder how many will start acting weird like this.