Element 12 - What to Do when the System doesn't work?

What to Do when the System doesn't work?


(1) To re-access the System by referring back to my book “The Winning Investment Strategy of Warrent Buffet & George Soros”, to compare my system with theirs.
(2) To keep reading investment book at least 1 book in every 2 months.
(3) Periodically re-access my system with my new knowledge every now and then.
(4) Think thoroughly about how successful investors' system work and determine the different between my system and their systems.
(5) Open for any input from those people that i think it makes sense in helping me improving my system.
(6) Always be humble and know that i need to keep learning more and more.
(7) Trust & be confident in my system and follow it thoroughly with always feel hungry of business investing knowledge and wisdom of life.

Element 11 - Handling Mistakes?

Handling Mistakes?


(1) To sell off all the wrong company/counter immediately including taking loss.
(2) To take mistake as my learning part, be glad of the mistake but promise to myself that i will never repeat the same mistake again in future.
(3) To think thoroughly about the mistake: why the mistake happens, how it happens, what is the cause of the mistake to happen or happen again in future, the consequences of the mistake to me now and in future, the learning point from the mistake, and the interrelation between the mistake to my investment system/strategy.

Element 10 - Protection against Systematic Shocks as a Market Crashes?

Protection against Systematic Shocks as a Market Crashes?


(1) Keep dividend as war chest.
(2) Keep at least 30% cash from my divested shares.
(3) To have ratio of 18 : 82 ratio of cash : stock in my portfolio.
(4) To add fresh fund periodically.

Element 8 & Element 9 - Portfolio Structure and leverage? & Search Strategy?

Portfolio Structure and leverage?


(1) Maximum 7 counters but preferably 6 counters for easy monitoring.
(2) No leverage.


Search Strategy?


(1) Solely through reading Financial Reports which meets my criteria in Element 1.

Element 7 - When to Sell?

When to Sell?


(1) When the Revenue Drops significantly for 1 to 2 Quarters, will divest all my shares.
(2) When the Profit Drops significantly inline with the Gross Profit Margin & Net Profit Margin.
(3) When the Ratio of Share price growing rate to Business growing rate is too high (<2.4x).
(4) When i have found another company with much better offer with Element 1.

Element 6 - Monitoring Progress of Investment?

Monitoring Progress of Investment?


(1) Read Financial Reports (Quarterly, Half Yearly, Annually, Annual Reports).
(2) Attend AGM.

Element 5 - How much to Buy as a Percentage of Portfolio?

How much to Buy as a Percentage of Portfolio?


(1) First time will buy at least of 20k and maximum of 40k .
(2) Subsequent will add 10k - 20k.
(3) Maximum 20% of Portfolio.

Element 3 & Element 4 - What Price to buy? & How to Buy?

What Price to buy?

Same as item (1) & (2).


How to Buy?

Using cash & Buy Online.

Element 2 - When to Buy?

When to Buy?


(1) Immediately once i got a company meets the above point no (1) criteria.

(2) To add more into my current holding with 2 CONDITIONS:
      1. When the companies reported outstanding result in increasing of revenue & profit above my expectation.
      2. When Mr Market offers a good bargain, like 30% below my initial purchase price.

Element 1 - What to Buy?

What to Buy?


My simple element in Buying Stock (i am working towards this element to be exact):

(1) Small capitalization company with low PE (PE is lower than 8).

(2) Has growing/expansion plans in the near term (less than 2 years).

(3) No debts/low debts with Net Cash.

(4) Good in generating cash flow-in.

(5) Good management and good management comments' connection from one report to another.

(6) Financial report is written using novice languages and easy to understand/interpret.

(7) Gross profit margin >15% and Net profit margin >5% (preferably).

(8) Management is good in allocating/deployment of retained earnings either in organics, in organics growth or giving as dividend to shareholders.

(9) To avoid commodity, property, finance, B-chips, S-chips, and large cap stocks.