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Ken Chee: Attain Financial Freedom Through Value Investing
Aspire, Thought Leaders | 19 June 2015
By: Vance Wong
Articles (74) Profile

Not many investors understand the concept of value investing. Even if they do, most average investors do not know where to start looking for good stocks. While everyone admires billionaire investor Warren Buffett’s investing principles, Ken Chee actually understands the essence of value investing and integrates it into his own investment strategy.

Having set up his own investment firm with no capital at all, Ken Chee managed to lead 8 Investment to a public listing in a short span of seven years. Part of his success is owed to Warren Buffett’s principles, but there is no doubt in his capability in applying them to the Asian markets. In a recent interview, Ken simplified and explained some important concepts about value investing, which he would be covering more in-depth in the upcoming Value Growth Workshop.

Best Stocks Can Be Found In Daily Life

Ken Chee: There are many ways to evaluate cheap and value stocks. The most basic way is of course through stock screening, a method where investors would look at key ratios (Price-Earnings; Price-Book Value; etc.) while analysing the general market.

The other alternative is just to be observant. Many of the best ideas can actually be derived from our daily lives. If you have realised, the next big thing in the world is going to be e-commerce. The first thing you should think about is Singapore Post, since most purchases are going to be made online; people do not need to physically visit a shop.

As most of the purchases we make online are generally delivered by Singapore Post, you should be able to see its huge potential even clearer. It does not matter if the purchases are made via Taobao, Alibaba Express, or even Qoo10, Singapore Post is almost always the delivery service provider.

Look At Fundamentals

Ken Chee: When it comes to looking at specific stocks, investors should always try to look at the fundamentals. Technical analysis is a good method to evaluating the stock’s potential value, but when in doubt, always go back to the fundamentals.

Mr Market can be crazy at times. As long as you stick closely to the fundamentals of a stock, you would be able to protect yourself against huge downsides. This can be applied across Singapore, and even in markets as volatile as China’s right now.

We are not looking at Warren Buffett’s top stock picks in the US at the moment because we mainly cover Asia Pacific stocks. This because it is easier to spot good opportunities back at home (Singapore) as compared to overseas. It allows us to do “on-the-ground scuttle butting”.

Opportunities Are Everywhere

Ken Chee: Although the Straits Times Index (STI) has been facing a minor correction since two months ago, it does not mean that every single stock is undervalued right now. It could mean that investors are realising that there are overpriced stocks and decide to either reduce their position or even bail out.

Regardless of how the market is performing, there are always undervalued stocks, you just need to be looking at the right places. Here is where the knowledge of spotting such opportunities is important and the key to value investing.

* Ken Chee’s initial responses to the interview have been edited to provide more depth and clarity for this article.

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