What Drives Me? (Hedgehog Portfolio Update)

IMPORTANT: Please read the disclaimer before continuing.

Hey friends,

I thought last year was fast… but I felt this year was even faster. Can you imagine it, we’re already 58% done for 2021?

Before moving on to the portfolio update, I like to talk about what kept my team members and me busy.

After my team and I completed revamping our investment course offering called the Growth Investing Mastery, we launched our second course called the SaaS Investing Mastery. It teaches ordinary investors how to understand loss-making software companies. It took us more than 6 months to complete it. We consulted with the industry insiders such as a senior executive from Salesforce, filmed the entire content, got our beta testers in, and re-did our content before releasing it to our members.

The sign-up rate is very strong and we’re humbled by the support. We’re confident that our content is going to help them build their foundational knowledge and invest with more certainty. At the end of the day, we are creators at heart and we are here to serve our members.

On the media side, I appeared on a podcast with The FIRL Podcast and an AMA with Jeraldine Phneah. You will learn how I analyse companies like Orgenesis and my mindset towards the stock market in those videos.

I also took my 2nd Pfizer vaccine. I’m gaining a bit of weight too, so I have to exercise more.

As usual, remember to check out my disclaimer page because my content is not professional advice nor is it a form of recommendation to transact in any securities. My content is made available for educational purposes only. I may buy any securities mentioned and I stand to benefit financially if they rise in value.  

Recap of The Hedgehog Portfolio

Let’s do a recap.

Back on 17 February, my 2nd portfolio called the Hedgehog Portfolio hit S$1.1 million and it was up 50.13%. Soon after, the sentiments of the markets changed. Investors were worried about inflation and yield curve changes. In short, investors believe the Federal Reserve in the USA would be forced to increase interest rates to tame inflation. Interest rates are what gravity is for valuations. When interest rates go up, stocks come down. When interest rates go down, stocks come up.

To understand more, this article from Investopedia is very useful.

As a result, on 26 May 2021, my portfolio corrected and my Year-to-Date (YTD) returns fell from 50.13% to 25%. I also detailed what was my thinking process.

1. Volatility in the stock market is normal.
2. Volatility in the stock market is a gift.
3. The stock market will go up in the long term

I don’t predict the stock market, I focus on my own companies. There are things we can control and things we cannot control.

For last quarter, there were some withdrawals from The Hedgehog Portfolio in order to fund my third investment portfolio.

Coming to my results, it is up 133.03% YTD (23 July 2021) and the total value is S$1.62M. Excluding the capital withdrawal, the portfolio value would be $1.75M.   

I have made a strategic shift in my portfolio where I sold off a portion of my core position to invest into an early superstock. I’m excited about its future because they are operating in a growth sector and the management understands the market very well. It is all about execution for now.

To keep myself grounded, I remind myself to learn from my past mistakes and reject the “Mr Know-It-All” mindset. Complacency and arrogance are two deadly combinations for a quick downfall.

My investment method continues to stay the same. I’m looking for business models with inherent competitive advantages and it is run by honest management who can execute fast. Finally, do not overpay and understand the prospective returns for each company. I do not create portfolio turnover unless there are very strong compelling reasons.

What Drives Me?

It’s easy to look at my results and think I built these results overnight. I started investing since I was a student at Temasek Polytechnic, I was on forums such as Valuebuddies.com, InvestingNote, then subsequently, on StockTwits and Reddit as well. I gave up my scholarship to pursue a career as a business analyst for a boutique fund. I did calls with management teams and investors from overseas. Every weekend, I put in the hours to hone my investment skillsets.

I assure all of you that I had my fair share of mistakes and at that point, it felt terrible. But I picked myself up, reinvent myself many times before I gained conviction behind what I do today.

What you see is a cumulation of the past few years. Likewise, what I am learning today will contribute to my future performance.

Last year, I came across this investor called Dennis Hong from Shawspring Partners. He manages more than US$1billion of assets. He talked about this concept called achieving hall of fame returns. He inspired me a lot.

Since then, I told myself I would never be satisfied with 20-30% returns in the stock market. That isn’t “hall of fame returns” at all. So, I challenge myself on a daily basis to grow and learn more. I play like a professional but learn like a beginner every day. I want to create breakthroughs and remove limitations.

If someone tells me that making 50 – 70% returns in the stock market is impossible, it reflects their own beliefs. I don’t have to believe in that. I create my own world. I create my own destiny. I create my own reality.

On the internet, everyone is entitled to their own freedom of speech.

However, for some individuals, it is extremely irresponsible of them to put someone’s dream or achievements down because they think it is impossible.

They are not creating possibilities; they are creating limitations.

At the end of the day, they are the ones who do not progress in life. They get stuck behind, so maybe they love to have more company? The truth is in the results.

After investing for close to 10 years, apart from understanding what drives returns, our mindset is of paramount importance.

How are you looking at investing? Are you easily content with average companies? Do you dare to analyse companies that no one is looking at? Are you always looking for companies with growth components inside? There is nothing wrong with analysing well-known companies, however, your results will be lower. When you analyse a smaller company where no one knows about, it will be your edge. It’s all about trade-offs. What are you willing to do, in order to generate the returns you want?

Investing has transformed my life in a very big way. Once again, I am always here to challenge the norms and break beliefs. I challenge everyone… in your lifetime, what is one thing you want to achieve?

To me, it’s all about being a great investor and honing my investment skillsets.

I hope, through my life story, I can inspire all of you. Investing could change your life. It has happened for me, it could happen for everyone. This is why I have so much conviction behind what I do.

Nothing is impossible when you spend time with the right people and you have a strong desire to succeed.

Last year, I have done myself proud. This year, I am still halfway there. Next year, I hope to do it as well. This is a story I can be proud of.

What to Implement?

It’s apt that I leave everyone with a series of questions for you to explore.

• How are returns generated in the stock market?
• How are the top investors investing?
• How do I define what is a good company?
• What is my own investment framework? Your framework creates the results.
• How can I expose myself with more investment resources to grow faster?
• Do I see the stock market as a way to earn quick profits or a place to build long-lasting wealth?
• What is my attitude towards volatility? Am I OK with volatility in pursuit of outperformance?

If building wealth and gaining financial independence is important to you, you will find a way. If not, you will stay where you are in life.

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