My Sytem Modification 1

1. Investing is a PROCESS, a Journey and it is NOT a destination.

2. NEVER add/average UP a company with ROE lower than 15% (low ROE)!

3. Do NOT let GREED taking over our calculation based on data.


Buying a Company:

The 1st thesis of investment:

(1) Value Growth? - good balance sheet, good business model, good management, ROE > 15%

(2) Deep Value? - good balance sheet, good management, stability of business/revenue, ROE < 10%.

(3) Asset Value? - good balance sheet with undervalued price to asset value.

(4) Dividend? - good balance sheet, good business model, good management, ROE is very low .


When the share price has been up tremendously, i should periodically check back with my 1st thesis in purchasing this company:

(1) Am i buying for value growth? deep value? asset value? (this is not my criteria) or dividend?

(2) When i invest for value growth, i should hold longer term.

(3) When investing for deep value, should tabulate the numbers in terms of ROE in a systematic model year by year based on the past 5 years to derive the historical ROE, comparing the PE with historical PE in the industry, and its peers' PE.

(4) I should always set a target price every year after financial reports are out.