Showing posts from August, 2020

Froth in the FANGs

Froth in the FANGs If August is a confusing month for many, readers can be rest assured the below post is curated to confuse them further. 1) Priced for Perfection? As the S&P fully recovered to pre-covid levels, the dominance of the FANGs has risen to the level of comprising 25% of the S&P 500 index . FANGS are priced for perfection, the ultimate blend of value and growth. Nothing must ever go wrong in the tech sector, or else the investor perception of the US economy will be severely hit. Privately, I have greater faith in the possibility of a turnaround in Hyflux compared to the priced for perfection scenario that the US investors are envisioning (Note sarcasm). When I start to have insomnia thinking about how US valuations are detracted from fundamentals and economic reality,  I need to reconsider my exposure to the US sector. This screams of Irrational Exuberance. 2) Fundamental changes in the traditional value investing camp Tech was once the scarecrow of the traditiona

Thoughts about Numbers VS Narrative

Thoughts about Numbers VS Narrative Every investor's investing framework is different based on his personality and experiences. Deep value investing and factor investing is easily replicated by simple stock screeners and Vanguard / MSCI sector funds, to the point that I believe most mainstream value opportunities are increasingly arbitraged away by machines and algorithms. Growth investing based on deep investigation on a company's special qualities is popularized by Philip Fisher's 15 points. A blend of both numbers and narrative is preferred by quant-like investors like Aswoth Damodaran. The Good Investors is another blog by Singapore based investors which I regularly follow, whom used a blend of Motley's fools narrative approach, sufficient quantitative rigor and putting less weight on traditional valuation metrics to pick highly volatile companies that is likely to grow to its current valuations. The Good Investors 1. Revenues that are small in relation to a large