Finding Juicy Fruits In A Crowded Market

I must have been seeing things. Did I really see a supermarket in Singapore charge S$13 for one pomelo, the other day? There must have been some sort of mistake.

But there was no mistake. It was as clear as day.

One of those big citrus fruits would have set me back a packet, had I not spotted a bargain earlier in the day. I know it was mid-autumn festival. But even still – when a shop just around the corner was knocking out the fruit for S$2 a pop, there was no earthly reason for others to hike their price six-fold.

Juicy and sweet

Unfortunately, there are probably many who – willingly or worse still, unknowingly – will have forked out more for their festive fruit.

In case you are wondering, the S$2 pomelo was both juicy and sweet. There was nothing intrinsically wrong with it. “Intrinsic” being the operative word.

Investing can be a bit like that too.

When we look at stocks, we should have some idea of their intrinsic values. Provided we buy shares that are below their intrinsic value, then we should have bagged ourselves a bargain. Just like the S$2 pomelo.

Intrinsically important

Consequently, understanding intrinsic value is, in my view, the secret that lies behind the door of successful investing. It also helps us buy pomelos at bargain prices.

Recently, we at Motley Fool Singapore launched a new service – MF550 – that helps investors find interesting shares in the Singapore market. We have, to date, identified five appealing dividend stocks and three thought-provoking growth share. There are more to come.

Perhaps one of the most intriguing questions about our selections has been how we found these stocks in the first place.

Old-fashioned way

These are not the kind of shares that would have automatically popped up in some sophisticated stock-market filter or clever screening software. Instead, they emerged from trawling through the market… the old-fashioned way.

Peter Lynch, probably one of the most successful investors of our time, once said: “If I look at ten companies, I may find one company that is interesting. If I look at twenty companies then I may find two. If I look at forty, I may find four. If I look at one hundred, I may find ten.

That is the kind of approach that we adopt here at the Motley Fool.


To paraphrase Peter Lynch, we spend a lot of our time turning over rocks. We believe that the person who turns over the most rocks finds the most grubs. That has always been our philosophy here at the Motley Fool – grub hunting.

We believe – as Peter Lynch does – that Investing in stocks is as much an art as a science. Lynch once said: “…people who have been trained to rigidly quantify everything have a big disadvantage”.

That doesn’t mean we don’t look at profit & loss accounts or balance sheets or cash flow statements. We do that too.

No magic formula

But we don’t, for one minute, believe that stock picking can be reduced to a simple formula that guarantees success, if strictly adhered to. Instead we look at many companies. We also look behind every company to find out what exactly they do.

In other words, we take a holistic approach to investing. That means we examine not only the company but also its competitors and the potential market to name just three. You can find out more at MF550.

You should do the same too, if you want to find good companies to invest in.

I’ll end this week with another quote from Peter Lynch who said: “Devote at least an hour a week to investment research. Adding up your dividends and figuring out your gains and losses doesn’t count.”

A version of this article first appeared in Take Stock Singapore. Click here now for your FREE subscription to Take Stock – Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock – Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.

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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 Director David Kuo doesn’t own shares in any companies mentioned.