Let Value Investing Be Your Instrument: How You Play It Is Up To You

After a decade of not touching a musical instrument, I finally decided to pick one up again recently. My instrument of choice: a ukulele. The main reason is that a ukulele is small and I can sing some nursery rhymes to my kids with it.

As I learned how to play songs on the ukulele through Youtube, I realised something: The ukulele is an instrument so simple that my two-year-old can play a song on it, yet it can still be used to produce some great and complex music. And, it can be equally fun to do both.

Many things in life are what we make of it, including investing. I have chosen long ago to follow the path of the value investing philosophy in my investment career. Yet, among friends who share the same ideology as me, we still tend to practice it differently from one another. I can’t help but relate it back to playing an instrument.

Here we are, all having chosen value investing as our instrument of choice in the world of finance. We are all playing it differently but the cool thing is we’re all having great fun and are producing the results.

Some of us who practice value investing like to focus on the simple stuff. We look only at companies with predictable businesses and stable growth. A REIT like Ascendas Real Estate Investment Trust (SGX: A17U) or a telco like Starhub Ltd (SGX: CC3) may be what we find to fit the bill.

Others might prefer to dig deep into complex companies such as agricultural products outfit Wilmar International Limited (SGX: F34). The company has multiple segments, each with their own global supply and demand relationships.

Yet at the end of the day, both ways to practice value investing can still produce great results as long as the practitioner knows which style he or she is more comfortable in.

After all, regardless of whether we enjoy digging deep into a complex company or prefer to stick to ones with simpler businesses, our objective is still the same: To ensure our capital grows in the future. In fact, trouble might come if we try to use strategies from others. Thus, it is important for us to know what kind of investor we are and not try to be someone we are not.

When I watch my child play “Row, row, row your boat” or admire a ukulele virtuoso, both seem to be having a blast, enjoying their music. Isn’t that the most important thing at the end of the day?

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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 writer Stanley Lim owns shares in Wilmar International Limited.