Letter to Batch 40 of the Early Retirement Masterclass

Dear Students of Batch 40,

It's been a great honour and privilege to conduct a 5-Day Early Retirement Workshop for you.

We begin Batch 40 with substantial changes to the way we conduct this course – 40% of the course has been overhauled.

The most significant change is the introduction of the Starter Portfolio, a simple 3-stock portfolio designed for beginners and stable. It can provide a reasonable 5% dividend right off the bat while being more robust to interest rate changes. This makes investing a whole lot easier and less intimidating than portfolios built for previous batches.

We also stopped segregating our blue-chip equities exercises from the REIT exercises, combining the STI and SG Next 50 stocks into one category for three levels of factor back-testing. In this exercise, we saw the importance of free cash flow yields and dividend growth in assessing how good a stock counter is.

Also, we experimented with ditching analyst reports in favour of a series of LLM prompts to deep-dive into a particular stock counter. We first have the LLM assess the stock price purely from financial statements, then compare it with analyst reports available online. We concluded that analysts' reports are overly optimistic compared to analyses based solely on reported business results.

Our outcome is a 16-stock portfolio designed to yield about 6.2%, which I am proud to put my money where my mouth is.

As AI developments further disrupt investment training, expect changes to how we conduct our course.

Lastly, Batch 40 will participate actively in the FB group.

Hope to see you then!

 

Christopher Ng Wai Chung