Thursday, December 22, 2016

How the financial blogosphere does good for ourselves and our readers.

Ok, I'm going to stop my usual Tools for Titans programming to just quickly talk about some of the good stuff coming out from the financial blogosphere in Singapore.

While I do not have a direct business relationship with Big Fat Purse, I am grateful for the the work that they have in put in to unite financial bloggers under one informal grouping. The gatherings and networking sessions conducted by BFP ( with food duly paid by them ) was very beneficial because, at least for me, I was allowed to befriend other financial bloggers and tap their brains when I face some investing dilemmas of my own. It's also not easy to get a group of introverts to get out to share investing ideas with each other.

A couple of months ago Alvin Chow shared a paper with me by Dr.Fong Wai Mun on the Novy-Marx Gross Profitability approach modified with a dividends investing methodology and was kind enough to reveal that he wants to develop a new approach to investing in local stocks.

The paper was very interesting so I brought it one step further to use SMU's Bloomberg terminals to backtest the strategy to see what would have happened if I applied this form of investing for the past 10 years.

The result is that I would have made 19+% per annum with a fairly impressive Sharpe ratio.

Not revealed in BFP's article is that the minimum dividend yield of this approach is 4.57% which makes it fairly attractive to a dividends investor as well.

I will not steal the thunder from BFP but I think whatever they intend to do has been independently verified by me using a Bloomberg terminal.

This means that there is a compelling reason for an intermediate investor to listen to what BFP has to say about investing in the local stock market in 2017.

I hope to reinforce the idea that we financial bloggers are the good guys in this industry and we are rapidly evolving into a serious counter-weight to the financial advise industry in Singapore.

You may find the link to the BFP annual letter here.

( No, I am not paid to write this article or do research for BFP. )

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