Chapter 22: Lessons From My Own Investing Journey

This is Chapter 22 of my book Mastering Value Investing: Practical Strategies for Real-World Results. Go there for links to the other chapters.

For more than two decades, my portfolio compounded at about 9% to 10% annually, compared with roughly 6% to 8% for the Malaysian market. I regarded this as evidence that disciplined value investing worked.

But experience eventually forced me to confront an uncomfortable question: was I applying the right investment skills in the wrong market?

Over the same period, major US indices delivered returns exceeding 10% annually. I may have been fishing skilfully, but in a pond with weaker currents. This was only one of several lessons from my investing journey.

Another lesson was that a company may look cheap because earnings are temporarily high, but there is no margin of safety if its underlying economics are deteriorating.

I also learned to be wary of turnarounds. Identifying what management must fix is much easier than actually fixing it. Recovery often takes longer than expected, while a weak balance sheet shortens the time available.

Perhaps most importantly, I learned that investment outcomes can be misleading. A poorly reasoned investment may make money, while a sound decision may initially produce a loss. 

The real test is whether the original thesis was grounded in business economics, whether downside risks were understood and whether the position was appropriately sized.

The full chapter explains how I deal with market noise, recognise behavioural mistakes and refine my investment process over time.

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I am not an investment adviser, security analyst, or stockbroker.  The contents are meant for educational purposes and should not be taken as any recommendation to purchase or dispose of shares in the featured companies.   Investments or strategies mentioned on this website may not be suitable for you and you should have your own independent decision regarding them. 

The opinions expressed here are based on information I consider reliable but I do not warrant its completeness or accuracy and should not be relied on as such. 

I may have equity interests in some of the companies featured.

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