Portfolio: Mix of Value and Growth
Portfolio: Mix of Value and Growth
There was a time when I was obsessed with price-to-net tangle asset ratio and would screen for stocks on Bloomberg terminals accordingly. I was a believer of The Intelligent Investor by Benjamin Graham, and trusted the process prescribed by the book because it was logical, and it felt safe to limit downside by relying on known elements from financial statements.
But my partner is a different breed of investor. He does not do any screening based on multiples but invests in companies he feels are changing the world and have the potential to become big. Although we both come from investment banking and are well-acquainted with all sorts of valuation techniques, when it comes to putting our own money to work, our approaches cannot be more different.
So apart from buying properties in Singapore, I hunted for bargains on the local exchange, analyzing and reanalyzing numbers with diligent gumption. Eventually, however, I came to appreciate a more growth-oriented approach to equity investing.
The first growth story I bought into was Match Group in 2018. By then, Tinder was already raging among younger folks. I was not aware of the application until 2015 when I started connecting with my younger colleagues. By 2018, Match Group had just turned profitable, but it was still considered expensive under traditional value investing standards; book value was a mere fraction of market capitalization. Investing in Match Group was a drastic departure for me, but the exact first step needed to snap out of my ultraconservative and fear-driven value investing style. After Match Group, I started to deploy more capital towards fast growing consumer and technology names in the U.S and Europe.
While I believe I am a value investor at heart, seeding capital in disruptive companies could pay off multiple folds, even if their financial statements might raise concerns to students of Benjamin Graham. My learning curve has accelerated since expanding my investing playbook to include consumer and technology sectors, which I document on my weekly blog
Diversification as a Defense Against Myself
I believe self-awareness is more important than hardcore financial skills when it comes to investing. For example, as diligent as I am, I can get caught up in my own mental models. This tendency of mine cuts both ways. It gives me diamond hands when holding onto something like Tesla back in 2019 when every naysayer was slamming the company in the media. Or it can punch me in the face when invested in companies that turn out to be duds – but only in hindsight – like the many value plays in Asia, and most recently, Peloton. Hence, I continue to diversify (because I know I can be so wrong even when I think I am so right!) and tap on professional advisors to get different perspectives.
My current portfolio hence consists of more than 40 stocks spread across older economy (hospitality, real estate, entertainment, retail) and modern technology companies (large and small) like Datadog, Cloudflare, and Salesforce. I also own my own home with my partner and maintain a healthy cash balance to moderate risk exposure.
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