Beat the Market

FuYao and RoE When asked about if there’s only one financial indicator what would Warren Buffett choose, He answered it is ROE. What is so special about this metric? When talked about fundamental in IN the metrics we use most often is PE but seldom do I see people, even sell side analyst mention about ROE. However, especially for value investor, it is financially the compounding factor of an investment. It is also part of the DuPont analysis that is so useful to check the efficiency of a company. If a company earns a 100 millions dollar and it has a payout ratio of 20%, it will give out dividend of 20 millions. But ever wonder how would the company use the remaining 80%? It is of course reinvest into its own businesses. But how could we judge the effectiveness of the retained earning? It is RoE. When company report it has x amount of earning. That earning goes to an account which is owner’s equity. The net income divided by owner’s equity is RoE. It is good indicator on how

1st Quarter of March 2019 Portfolio Performance 2019 YTD  32.37% Performance since inception  1030.63% Portfolio  Haidilao 77.41%  Pinduoduo 12.09%  China Sunsine 9.61% End of this quarter marks the 3rd anniversary of my investing journey. I’ve got a good start. I would like to give thanks to all the people who have been following me since I started writing in Investingnote. It’s good that I could store my transaction date and data in here. The performance is good and perhaps it is useful to share in my opinion what makes it.   First of all, Luck is important in investing and I know it perhaps better than most people. Michael Mauboussin has a good way of determine it. Just ask myself, how easy can I purposely lose on a game? It turns out that compare to other game, I could more likely benefits from wrong decisions in equity market. “Be fearful when other people is greedy and be greedy when other people are fearful”   Almost everyone know this and I b

Hai Di lao It is a stock that make up more than half of my portfolio, I’ll discuss why I’m interested in it. I will break them down to few points. Most of the information in this article is from the IPO prospectus. For the info that is not from the prospectus I would normally start the statements with the words like “In my opinion” or “I think”. Business Moat As mentioned in their prospectus, their advantage versus other hot pot restaurant would be their unique management structure. What it does is to connect the incentives among all the employees effectively and doing it in a scalable way(prospectus can explain better with charts) To do this effectively you will need a good brand power in order to ramp up customer fast in newly open restaurant, experience management, and good supply chain. They had countless copy cats for many years but none of them causes a threat. Good service comes only with good pay check. A good “culture” without good economic compensation and career

Welcome! Hey guys thank you for visiting my blog   I would start this blog by introduce myself first.   My name is Vincent and I’m a chef who started to invest 3 years ago.   At first I was just thinking of finding a passive income(later found out that it couldn’t’ be more active). After that I started to find the best investors to learn from. The first come to mind is of course none other than Warren Buffett. Upon learning more his teaching naturally I also learnt something about Charlie Munger, thus it lead me to his “Poor Charlie's Almanack”. That is the book that changed my life. I’ve became his pupil and practice everything that he preached. Most notably is of course to have a moral obligation to be rational and making sure that I learn something everyday. Luckily with internet and books I easily acquired knowledge that I need to have so that to become a better business analyst. I’m a very curious guy, books about history, business, biographies, and psychology