In his book, Laughing at Wall Street: How I Beat the Pros at Investing (by Reading Tabloids, Shopping at the Mall, & Connecting on Facebook) And How You Can, Too, Chris Camillo discussed how he easily turned $20,000 in early 2007 to over $2 million in three years. He felt that retail investors like us can easily trounce the people at Wall Street; Wall Street is a widely-used figure of speech for the financial sector of the United States as a whole. Observe, Just Observe Chris espouses in his book that by observing the world around him, he easily turned…
In his book, Laughing at Wall Street: How I Beat the Pros at Investing (by Reading Tabloids, Shopping at the Mall, & Connecting on Facebook) And How You Can, Too, Chris Camillo discussed how he easily turned $20,000 in early 2007 to over $2 million in three years. He felt that retail investors like us can easily trounce the people at Wall Street; Wall Street is a widely-used figure of speech for the financial sector of the United States as a whole.
Observe, Just Observe
Chris espouses in his book that by observing the world around him, he easily turned $20,000 in early 2007 to over $2 million in three years. According to him, game-changing information can be hidden in everyday life while watching television, reading tabloids, working at the office, shopping at the mall, eating out at restaurants or just surfing around in social media websites. Such information is also slow to catch on with the folks from Wall Street.
I agree with what Chris advocates in the book. Over the years, I have found my fair share of companies to invest in by daily observations.
So, how can you, as an investor in Singapore, have an upper hand over Shenton Way, our very own “Wall Street”?
For starters, you too can have an upper hand, just like Chris, by observing the world around you. A keen eye for detail makes for an intelligent investor.
Let’s imagine that you are visiting Funan DigitaLife Mall, which is coincidentally owned by CapitaMall Trust (SGX:C38U), to get an IT gadget for Christmas for a friend. (Read an analysis about CapitaMall Trust here and here).
As you trod your way to the various stores, you realise that a store called Valore is on the second floor, and realise that it is operated by Challenger Technologies Ltd (SGX: 573).
You might observed that the store is bustling with people and that the queue at the cashier seems never-ending, and make a mental note that Challenger is worth a closer look once you get back home.
As you make your way to the third floor, a store called Musica caught your attention. It sells headsets, earphones, speakers and more. The store is bursting at its seams with patrons and is run by Challenger too. You decide to get a pair of earphones as a Christmas present.
After the earphone purchase, you feel hungry and start looking around for a snack. You feel a little guilty as you just had a heavy lunch at Ajisen Ramen. You also recall that Ajisen is owned by Japan Food Holdings Ltd (SGX:5OI) that also owns other F&B brands such as Meya Musashi, Botejyu San, and Fruit Paradise. (Here is a little more info on Japan Food.)
As you head to the first floor, you notice your favourite curry puff stall, Old Chang Kee Ltd (SGX:5ML). You notice that it is selling a new version of its curry puff and decided to give it a go. The new puff is delicious. Will this new puff be a game-changer for Old Chang Kee, you wonder.
After checking out the website of Old Chang Kee on your mobile device, you are surprised to find that they operate restaurants, cafes and new concept stores such as Curry Times, Mushroom Cafe and Dip’n’Go. You made a point to delve deeper into Old Chang Kee’s business. (Read the latest earnings report for Old Chang Kee’s numbers here.)
On your way back, you decided to visit the supermarket to pick up some groceries. You come across both Cold Storage and Sheng Siong, but decide to head into Sheng Siong. You remember a friend telling you about how Dairy Farm International Holdings (SGX:D01) owns Cold Storage, Giant, and Guardian Pharmacy among other stores in Singapore and across Asia. Sheng Siong is owned by Sheng Siong Group Ltd (SGX: OV8). (Read an argument about Dairy Farm here, an analysis about it here, and read about Sheng Siong’s latest earnings here.)
As you walked to the coffee section, your gaze became locked onto a pinkish-looking package. Upon closer inspection, you realised that it is an Owl Brand Soya Beancurd Pudding made by Super Group (SGX: S10). You decided to buy it to give it a try. You enjoy the Soya Beancurd Pudding and decide to add Super Group to the line of companies you’ll like to research on. (Read an overview of Super Group here.)
The above is just a simple example of how daily observations can give you an upper hand in investing.
We, consumers, are the ones who use such products and are able to spot trends way before analysts do. We can observe the queue at public-listed restaurants, retailers and the likes. We can try the products and decide if they will be revenue generators for the company.
However, do note that just because a new product has been launched by a company, does not automatically mean it has become a good investment. Valuations, balance sheets, cash flows, profits, and other aspects of a company’s fundamentals all come into play when trying to make an investing decision.
Superinvestor Peter Lynch was apparently quoted once as saying, “Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.” That’s apt here, isn’t it?
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P owns shares in Challenger Technologies and Super Group.