Monday, September 09, 2019

Letter to Batch 7 of Early Retirement Masterclass students


Dear Students of Batch 7,

It’s been a great honour and privilege to be able to conduct a 2-Day Early Retirement Workshop for you.

This particular class is distinguished by its active class participation. The Q&A for this session is so intense that we finished both days at around 6pm. What I really like about this batch is that some questions shared are quite novel and learned a lot from everyone.

I think the question that left the biggest impression on me is the concern that investment class participants being permanently tied to the trainer via an “umbilical cord”. 

Having a community that is becomes too heavily reliant on back-testing results from the trainer to cherry pick strategies is not the design intent of this program. Instead, I hope that over the next few months, you will be able to detect some common themes in the subsequent strategies published to gain enough courage to develop an opinion on what works on the SGX, and then screen and invest stocks of your own. Sharper students have noted that picking counters with low P/E ratios seem to consistently work in local markets.

As we’ve crossed the month of August, optimism is slowly returning into the Singapore markets and a smaller number of class participants believe that we are undergoing a market trough. This may be a sign of improving conditions in the markets.

For this batch of students, we have, once again, evolved the method that we use to pick our stocks. Students are now given a choice to vote between two strategies based on five-year and ten-year back-tested results to grant them more autonomy over what stocks to select for the Batch 7 portfolio. As such, your selections can be found in the two spreadsheets attached and I have also included the screens that were not chosen by the class for your future reference.

The passive income portfolio built by this class this time round is particular attractive having forward yields of 7.2%. You should prioritize this portfolio if you do not have sufficient capital to buy both portfolios. Using $20,000 of course proceeds, I intend to also buy the equities portfolio that has been built by this class but it the allocation will be equally-weighted between 17 counters short-listed by this class.

Finally, there are requests to accompany me to witness actual back-test strategies on a Bloomberg terminal. I doubt I can do this for such a large class of students every month so I will be putting up a video of how I perform a back-test soon.

Christopher Ng Wai Chung

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