Over the last few years, I did several writeups on investment opportunities which I thought were compelling at the point of writing. I was/am vested in them all. Some worked out well while others were alright. You can find the links below.

  1. Dolby Laboratories, Inc. – October 28, 2012 (NYSE) (USA)
  2. Billabong International Limited – June 13, 2013 (ASX) (Australia)
  3. Sedgman Limited – September 13, 2013 (ASX) (Australia)
  4. Fu Yu Corporation Limited – September 30, 2013 (SGX) (Singapore)
  5. American Eagle Outfitters Inc – November 6, 2013 (NYSE) (USA)
  6. EBIX Inc. – March 14, 2014 (NASDAQ) (USA)
  7. Verisign, Inc. – July 18, 2015 (NASDAQ) (USA)
  8. YouGov – May 2, 2016 (LSE) (UK)

Positions fully exited

Billabong, Sedgman, Fu Yu and American Eagle have been completely sold down.

Billabong worked out well and was among the best investments made, in terms of percentage in returns.

Sedgman was taken private and generated a pretty good return though it was impacted by forex losses from the depreciation of the AUD.

Fu Yu was a case where I got it right and still ended up wrong. It was trading way below the liquidation value and I exited at various points during the investment, including at prices around where it eventually landed near liquidation value. However, at 1 point, it went down a fair bit below the price I paid for it and self doubt creeped in. That led me to exit the investment partially. The investment was initiated along with a basket of several other similarly stocks at below liquidation value. While the rest (not documented in writeups) were profitable,  on an overall basis for Fu Yu, it was breakeven. The lesson to be reinforced from this episode is to not panic when the thesis and situation remains intact, and to have a need for a strong stomach. Easier said than done, but utterly essential for investment success.

For American Eagle, even though I went in with my eyes wide open on the dangers of fickle retail trends, I still underestimated the extent of how the market views retail stocks with a broad brush. That resulted in an investment loss.

Existing positions

Dolby and the 3 latest writeups are still within my portfolio

Lessons from writeups

I have found that by writing the investment thesis down, the benefits go beyond having an anchor and reference point to recheck my assumptions when the going on the stock price gets tough. That is invaluable. However, I realised that by writing in a certain organised and concise format, it forces me to be honest about my assumptions and in mitigating the risks of not blindsided by excess optimism. Eg. Listing the risks, coming up with probabilities and bear case valuations. Basically taking care in assessing the downside and in instilling a disciplined approach.

Very often, as in the case of past investments where I did not lay my thoughts out as clearly as I had done in the writeups, they have typically led to dismal performance. I suspect I was swept up by waves of euphoria and threw caution to the wind in the process. Either that or I rode on coattails of famous value investors and got pretty burned by the blind faith of outsourcing due dilligence to ‘gurus’.

Evolution of structure

As you can see, the structure of the writeups evolved along the way. From the first ones being somewhat lengthier to the later ones squeezing all the key points into a single page. I have found the one pager format to be alot more palatable for my own rereads and agreeable to the attention span of friends whom I disseminate to (though most would likely have to squint just to read).

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