This is # InsightsInterview Episode 7 with one of our top contributors on the InvestingNote Platform, username: ThumbTack Investor.
This # InsightsInterview series is to showcase financial experts, influencers and bloggers on a personal and insightful manner, to get glimpse of their investment journeys and their insights on the market in the near future. Every one of them have different styles of investing, expertise in different types of securities and also have their own story to tell.
Previously, we have launched 6 episodes of # InsightsInterview by influential bloggers. To read more about their post, you can find out at the end of this interview. The links are attached to the previous interview series.
Recently, we interviewed ThumbTack Investor (also known as TTI), to understand more about his investing strategies, biggest trade winner and loser, and what motivated him to get started in the first place.
TTI is one of InvestingNote’s most reputable member in IN Member’s Ranking with more than 1000+ followers, specialising in contrarian and deep value investing.He owns a blog, https://thumbtackinvestor.wordpress.com/. Till date, he has created many educational post and investment ideas and spurred discussions on InvestingNote platform. This is #InsightsInterview, Episode 7.
Tell us more about yourself and how did you get started in investing or trading?
I’m in my mid 30s, and working as a doctor. My 1st ever major investment, without even realizing it’s a form of investing, was in a private business. Together with some friends, we pooled our resources and bought several single family homes (the equivalent of a landed property in Singapore) on the back of the GFC in 2009.
Our thinking then was really naive. We simply wanted to move capital to where everybody was running away from. We chose Houston, Texas as it was, at that time, the 3rd most affected real estate market in the US, after Chicago and California, and Chicago’s crime is outright horrible and California is too fragmented a market without any 1 major catalyst for its economy.
On the other hand, we knew that Houston had the world’s largest medical facility and it was always going to hire highly paid professionals that needed housing no matter what happens. These professionals don’t own their homes as they tend to move between states or even to other countries whenever there are opportunities for research collaborations.
We got lucky and the markets turned relatively quickly, and we flipped the single family homes for a 100% gain within a year of renting out. Still, the buyers managed to flip it again within the next 18 months for almost 3 times of what they paid us for it, so that was a lesson in itself for us.
That incident whetted my appetite and I begun to look for opportunities to deploy the capital I received from that little adventure.
What type of trader or investor would you say you are?
A good, old bottom up, fundamental investor. Over time, some aspects of my approach has been modified. For example, these days, I incorporate a healthy dose of an opinion on the macro direction of the industry and where it’s headed in the near term.
Over time, I’ve also started to move more and more into the derivatives space, as I think that’s where mispricing most commonly occurs.
What are your best investments and worst investments since you started investing?
My best investments are in the private equity space so I won’t talk much about them. I’ve also had a very nice return (ROI-wise, not quantum-wise) investing in Wells Fargo at USD12 or so, in early 2009.
My worst investment is in a HK-listed shoe sole manufacturer. The management defrauded the company and ran away with practically all of the company’s funds. I wrote off $30k SGD as a result.
The company has since been suspended, and remains suspended, although there’s now a process of a RTO, which would get the company trading again.
Do you have an idol in investing or trading? If so, what’s the most memorable teaching from them?
Not a specific idol, but there are several whom I like to read about and follow. I like Bill Ackman, Warren Buffett, Carl Icahn and Howard Marks amongst several others. I’ve also had the fortune to discuss and learn from several other successful investors in this part of the world, but they’d decline to be named.
Each differs greatly from the rest in their thinking and methodology, but that’s what makes it exciting and fun: There are many roads to Rome, so I think the key is to figure your way around.
As they say, roll around a bit, cos round pegs find round holes.
Do you have any rules to stock picking?
The core tenet revolves around the definition of traditional value, and getting a good price for the assessed value. That is, the traditional margin of safety.
Yet, I don’t believe there are fixed rules to choosing stocks. I think the markets are so dynamic, and qualitative factors that cannot be gauged by numbers alone, often have such a big and lasting impact, that we’d be fools to ignore them.
These qualitative factors form the “Art” portion of investing, and as with most forms of art, what are the rules that govern good art? There are none.
Can you share with us what is your current portfolio allocation?
Geographically, about 40% is in foreign markets such as the US and Japan, while the rest is in SG. Most of the 40% is in the form of derivatives such as options.
At all times, I try to keep a healthy dose of cash. When there are good opportunities, the amount of cash is almost always insufficient.
What do you think of the current market conditions in Singapore right now?
I do not try to forecast market conditions cos I don’t find it useful in determining investment decisions. In general though, SG’s markets have lagged behind the major global markets, so logically, it’d be more insulated against a crash.
Which industry and sectors are you currently looking at and why?
I don’t limit to any specific industry or sectors, and I’d look at anything that interests me.
What is your day to day strategy towards investing or trading? Do you implement a top-down or bottom-up approach for stock picking?
Bottom up, of course.
How do you manage your portfolio, passively or actively and elaborate on it?
My entire portfolio is divided into 2 broad categories: Equities and Property.
The equities portion includes private equity and publicly listed ones. Since the start of the year, I’ve divested most of my private equity stakes to other stakeholders, and only own 1 major position currently.
The publicly listed ones are mostly in the US, SG and HK.
Over time, I intend to increase my portfolio exposure to US equities via options.
For the property segment, my thinking is very simple. Since I’d need a place to stay, logically, to be an actual property investor, I’d need 2 or more properties at any 1 time. Otherwise, selling high would also mean buying high and vice versa.
Currently, I do not own any properties overseas.
Within SG, I own 2 fully paid up private properties. I try to stick within the CCR (D9,10,11) because narrowing the range means that I get to be more focused and be the SME for the area that I’m looking at. I look out specifically for distressed properties, which admittedly, do not come often. I did chance upon 1 early last year, but was beaten to it by a single day. That same property is now valued at a cool $400k more than when I last bid for it.
My personal rule is to only take up mortgages for properties to the extent that it remains cashflow positive.
I spend 4-5 hours every weekday night, and probably much more during the weekends, reading financials and assessing potential opportunities. I end up not acting on 90% of the stuff that I look at, but I guess the 90% is the necessary evil needed to find the 10% that I do act on.
If you can go back in time to change one mistake about your investing/trading journey, what would it be?
Reading and trying too many things.
Ultimately, I’ve come to realized what works for me, and what I enjoy doing.
However, it has come at great cost, as I’ve previously experimented (with real money unfortunately) with many other ways that I’ve read about in books.
Also what advice would you give to new traders or investors?
Think independently and logically. If an opportunity appears that’s so obvious and easy, always hesitate and think deeper. The markets are for the most part, more efficient than you think.
If something is easy to do, forget about being successful doing it. Most things that lead to incredible successes are not easy to find, and certainly not easy to do.
TTI currently has more than 1,000 followers and provide many accurate stock estimates. Follow him to get the latest updates and educational posts on the Singapore stock market.
For more juicy analysis and personal stories by other financial influencers, check out our previous episodes on # InsightsInterview here:
- Ep 1: Terence, founder of TUBInvesting
- Ep 2: James Yeo, founder of SmallCapAsia
- Ep 3: Li Guang Sheng, founder of WealthCoachAcademy
- Ep 4: Rayner Teo, founder of TradingWithRayner.com
- Ep 5: Joey Choy, Top-Tier Remisier, founder of Trading-impossible.com
- Ep 6: Lynlynnakamori, One of the top contributors on InvestingNote
To learn more on where to get started, we have other topics on investing here.
InvestingNote is the first and largest social network for investors in Singapore. Find out more about us here.
Download our free app here: