Skip to main content

Imaginative Investing


The Art Of Transcendental Business Projection

We can do all the number crunching and spreadsheet analysis, blah-blah, but will that ever get you the 3-bagger or 5-bagger over a period of 3-10 years. 3-bagger refers to 300% net returns from your initial investment. Journalists or those with 20/20 hindsight vision will always tout the scenario that if you had invested US$10,000 in Genting, Berkshire Hathaway, Microsoft, Intel, etc... 10 or 15 years ago, you'd be ... close to Nostradamus (dead and unbelievable).

Maybe we don't need a 300% return over 5 years, maybe all we want is a stock that will gain 20%-30% a year, even then 2-3 years down the line will see us doubling our money at least. That should be pretty good. But we don't want to do endless homework and research to get there. Well, there is a way, and that is what I call (my creation) Imaginative Investing.We are blessed with faculties to be able to appreciate nuances in behaviour. We can always point to a kid and say with authority, "That kid will grow up to be a brat, useless piece of shit". We form predictive comments in our own sphere of consciousness and deductive powers. This goes on and on, some things we can be good at, others not very much - e.g. If I strike the lottery, I will donate half to charity (ain't gonna happen cause you don't even buy lottery).

Of course, not everyone will be brilliant in using Imaginative Investing technique (send me now US$300 and you will get a money back 30 day guarantee...) as it has a lot do with your basic IQ to start with. I mean, we can only work with what we have, you know.

OK, I jest, here's the more serious stuff... Imaginative Investing is about thinking and filtering companies with the intention of seeing where they will be 2 or 4 years down the road. Sounds simple enough, but just as simple as predicting a beautiful teenager that she will turn out to be a beautiful girl in 5 years time. Our imagination and projection of a company's road into the future will carry with it many factors, which we may not be able to put down on paper, but we can feel it in our guts. It has to do with either the industry the company is in (industry enlarging); its ability to protect its margins or even a cartel-like operation; its cadre of strong, visionary and prudent management; maybe their product will find great acceptance or be the market leader; etc... Naturally these things are the same stuff that analysts will go through when writing their reports, but trust me, somehow, these nuggets get lost along the with the clinical prose, standard recommendation, rows of rows of figures, etc...

As ludricous as it may sound, just gve yourself some space and time as you read through the papers, slow your breathing, close your eyes, focus on the name of the stock, ... of course you must know something about the stock in the first place (I'm not Madam Zathura for heaven's sake) or a market semi-professional (i.e. adept at losing money professionally but given no credit for it)... then try and visualise the company's business, earnings, how the company will be one year down the road, two years down the road... how they will get there, will they get there, what will they be... will they be tripling their net profit then. These imaginative quests has the ability to correct each hypotheses by themselves. If you start thinking of a silly proposition, such as NST doubling its share price in 3 years... your inner voice will laugh at you. Its amazing but if you respect your inner voice, it can tell you a lot of stuff man! These projections are self censoring, it will be able to take in all the news items, corporate announcements, financial tidbits, uselesss financial blogs like this one, etc... to form the basis for censuring projections.

Somehow at the back of our minds, we can see a certain product or business that will continue to flourish, or an expanding market share, or a way forward to dominate their respective markets ... it is harder to justify those visions on numbers projection alone.

I did not examine the financial numbers of the following companies closely, but they all look like 3-baggers or even 5-baggers in 3-10 years time (in my imaginative transcendental portfolio). I will also rate them out of 10 points as an indication of their potential - the higher the better.

MALAYSIA
Air Asia (9/10)
Pos Malaysia (6/10)
Transmile Group (9/10)
Uchi (7/10)
Genting/Resorts World (7/10)
D&O Ventures (8/10)
Faber (6/10)
Sunrise (6/10)
Wah Seong (8/10)
IOI Corp (6/10)
Scomi Engineering (6/10)
Scomi Marine (9/10)

SINGAPORE
Capitaland (6/10)
Hyflux (7/10)
Singpost (7/10)
Keppel Land (6/10)
OSIM (8/10)
Hong Leong Asia (8/10)

I somehow know the bulk of my Singaporean readers will crucify me and alert me to their own picks... but these are my Imaginative Investing Picks, do NOT quote research/financials of these companies to me. I just know where they are, I have read about what they do, have been doing, and my assessment of the platform they are on, the ability to leverage and scale up.... in my mind. Maybe some of you would like to share you II picks too.

HONGKONG
China Mobile (6/10)
Li & Fung (9/10)
Cafe de Coral (6/10)
Cosco Pacific (7/10)
China Oilfield (6/10)

Comments

stocklover said…
Hi Dali,

Why Naluri is not in your list? But you have included Faber and D&O.....

Regards.
Salvatore_Dali said…
Hi lover,

Naluri is the weakes t of my 3 top picks for 2006, moreover Naluri is more a second liner play - which is why I picked it in a bullish market for outperformance. However, with II, I would need to be able to picture them 2-3 years down the road, and frankly, I don't know how good or what Naluri will be 2-3 years down the road.

Popular posts from this blog

My Master, A National Treasure

REPOST:  Its been more than two years since I posted on my sifu. This is probably the most significant posting I had done thus far that does not involve business or politics. My circle of close friends and business colleagues have benefited significantly from his treatment.


My Master, Dr. Law Chin Han (from my iPhone)

Where shall I start? OK, just based on real life experiences of those who are close to me. The entire Tong family (Bukit Kiara Properties) absolutely swear that he is the master of masters when it comes to acupuncture (and dentistry as well). To me, you can probably find many great dentists, but to find a real Master in acupuncture, thats a whole different ballgame.


I am not big aficionado of Chinese medicine or acupuncture initially. I guess you have to go through the whole shebang to appreciate the real life changing effects from a master.


My business partner and very close friend went to him after 15 years of persistent gout problem, he will get his heavy attacks at least…

PUC - An Assessment

PUC has tried to reinvent itself following the untimely passing of its founder last year. His younger brother, who was highly successful in his own right, was running Pictureworks in a number of countries in Asia.

The Shares Price Rise & Possible Catalysts

Share price has broken its all time high comfortably. The rise has been steady and not at all volatile, accompanied by steady volume, which would indicate longer term investors and some funds already accumulating nd not selling back to the market.


Potential Catalyst #1

The just launched Presto app. Tried it and went to the briefing. Its a game changer for PUC for sure. They have already indicated that the e-wallet will be launched only in 1Q2018. Now what is Presto, why Presto. Its very much like Lazada or eBay or Alibaba. Lazada is a platform for retailers to sell, full stop. eBay is more for the personal one man operations. Alibaba is more for wholesalers and distributors.

Presto links retailers/f&b/services originators with en…

How Long Will The Bull Lasts For Malaysia

Are we in a bull run? Of course we are. Not to labour the point but I highlighted the start of the bull run back in January this year... and got a lot of naysayers but never mind:






























p/s: needless to say, this is Jing Tian ... beautiful face and a certain kind of freshness in her looks and acting career thus far



http://malaysiafinance.blogspot.my/2016/12/bank-negara-may-have-switched-on-bull.html


I would like to extend my prediction that the bull run for Bursa stocks should continue to run well till the end of the year. What we are seeing for the past 3 weeks was a general lull where volume suddenly shrunk but the general trend is still intact. My reasons for saying so:

a) the overall equity markets globally will be supported by a benign recovery complemented by a timid approach to raising rates by most central banks

b) thanks to a drastic bear run for most commodities, and to a lesser extent some oil & gas players, the undertone for "cost of materials" have been weak and has pr…