Style:
Value

Description:
Investing for me must be simple, logical, and straightforward.  Common sense is also required.  Although stock prices fluctuate wildly due to peoples’ emotions, they will eventually reflect underlying business conditions.  This, I believe, is where the opportunities lie.

My foundations are in value investing, primarily from the works of Benjamin Graham.  His logical approach and reliance on numbers are the basics for profitable investing.  In my favorite book, The Intelligent Investor, Graham offers practical strategies for success in the market that are still very relevant today.  However, the most critical lesson was learned from Graham indirectly.  That is the importance of independent thought.  

Like Graham, I am a 100% quantitative investor.  Therefore, I only buy stocks based on numerical analysis.  It’s all about numbers.  Company fundamentals are the key to finding solid businesses undervalued in the market.  The ratios I look for first are P/E < 10, Price/Book < 1, Price/Cash Flow < 5, Insider buying > $1,000,000, debt/equity < 0.5, and sometimes growth.

On the other hand, I also believe there are many ways to profit in the market.  So I am constantly learning and testing new theories to further develop and refine my skills.  It must be stressed, however, that I only use time-tested, statistically-proven, stock-picking techniques.

But no matter what, discipline will always be the cornerstone of my strategy.  This, actually, is also the hardest part about playing the stock market.  By definition discipline is something that must be worked on every day.  You must constantly study and look out for opportunities.  You must learn to ignore emotions – fear and greed – and stick to fundamental analysis.  You must patiently wait for the market to prove you are right, even though temporarily you might look wrong.  You must endure constant criticism.  You must ignore the allure of get-rich-quick stocks.  You must follow a strict trading strategy.  You must learn to trust your instinct and experience.  In short, profiting in the market takes a lot of hard work and some guts.