July 23, 2021

19 thoughts on “Rolf’s investment philosophy (Part 2) – Understand the business!

  1. Hi Rolf,

    I agree with the part about work, but just about performance but that it should have you passion and joy.

    We might lose it for a while, the longest I lost it was about 9 months I think. It might not seem very long but when u feel like quitting, 9 months is a long time.

    I advise giving ourselves a second chance especially if one uses to love the job, it could be just those down time and we get back on again, this time with more vigor !!

    As for understanding business, I have a slightly different take. We do not need to be in the industry to know the industry ( ya I know what peterlynch says about insider knowledge)

    Simple, in our life time, how many industry can we be in? Perhaps 2? Can 2 industry provide diversification?

    But I am totally with you when you say understand te why before the numbers. I am also quite sick of people talking about numbers at face value. Like the loan ratio so high, I will give it a miss. Why is it high?

    It is short term loan, long term loans, bullet loan? Is the loans for property or inventories?

    If lee metals do not take a big impairment on their inventories this year, I think their business model of using very short term loans to let inventories "fast in fast out" is a thumb up. I am not bothered about their loan ratio.

    As a armchair investor and not an insider, we howver must be humble that however we read industry report or peers reports, we might be wrong and hence I will never do focus investing ( more than 20% ) for any one counter, trying to get everyone to be below 10% from the current 15%.

    That's why when u said O&G need order book for their loans, I understand what u meant but still think as an outsider it makes little economic sense …

    You just inspired me to another post

    1. Hi SI,

      Long comments. Tks for the effort. I will return with a long one too. Hehe!

      Nod nod nod, passion and joy is important.

      I wrote in above article "From a start, choose a career that you will be passionate forever (preferably) and one that allows you to learn the most of the business instead…."

      I also wrote an article two years ago with few paragraphs relation to "passion" . Refer below.


      In fact, passion of career, need not to be business related, it can art, sports, design etc… But since we r talking about investment, hence I mentioned business here.

      For all u know, I was a part time tutor for 10 yrs and hence my utmost respect for teachers!

      Life is as such that we will feel up/down and sometimes loss and make terrible mistakes and even hate the person we loved, unconsciously!

      It is ok, as repentance n forgiveness is above all!

      Yes, I m not saying we need to be in the industry to know the business. I am saying we need to understand business in general to know better what is the true stories of a stock!

      Business acumen once established can be applied to many different places. I had a client who use to own Miclyn offshore – by the name of Michael Kum. After selling his offshore business in 2007, he is now in Hospitality business accelerating his net worth to $800mio. So offshore and hotel? Not related! I

      It is the business sense, not how many industries u r in before?

      It is difficult to acquire business sense without practice application, hence most of bloggers will spend all their effort in the financials which they can access via reading.

      But very soon, they will realize even with hours and hours of researching day in day out, their stock portfolio is still not doing so well.

      Then many years later, they will start to wonder… what the hell goes wrong?

      Maybe by then, they will say they should just spend the minimum criteria of reading up on a stock/reports! Jot some simple notes and decide yes or not! If yes, hit the buy button! Then after that, just ignore the stocks and better spend quality time on family, hobbies (blogging included) or career.

      Look forward to your post! 🙂

    2. But I do agree that only practical experince can one make sense of business execution.

      Look at logistic. CWT and singpost, both captured investors' attention. The tactic is similar, create a vertically integrated business that feed on each other. Singpost used e-commerce to fill the warehouse, CwT used trading of commodity.

      But it does not mean anyone that pursue this tactic is wonderful business … The execution … What is good what is reasonable, only those with on hands experince will be able to tell

  2. It is still better to become wealthy through our human asset but can be supplemented or accelerated by our financial assets.

    Now we read who is talking facts and truth.

    Commercial bloggers who have vested interest are telling us that we must spend more time and effort on our investing or hobbyist blogger taking his time, energy and effort to tell us the fact and truth behind human asset (capital) vs. financial assets . Good job! 🙂 🙂 🙂

    1. Hi CW,

      Thanks for the compliments! Learn a lot from u also.

      We are the minority in the financial blogosphere who r aligned on this theory since awhile back.

      I remember when I just started blogging/commenting, I was mocked by many bloggers when I mentioned about building human capital. They said including some extremely popular ones:

      "they will become owners of many companies shaking leg and collecting dividends while I slogged working hard for maybe the company they owned. One even more Ridiculous comment is even the CEO is working for them since they owned shares of the company."

      After I hear that, I began worry for the future of Singapore! Imagine China is so hungry and HongKong is so competitive…

      This spur me to write more reality articles here so that my kids and also Singapore future generation can have more wisdom!

      I want to live to see Singapore to do well before I closed my eyes!

    2. Hi Dennis,

      Tks for dropping by. May I know what type of FIRE you are referring? Financial Independence Retire Early?


  3. Rolf,

    Remember the first time I came to poke you?

    My first impression of you was that you sound very refreshing and quite different from the rest of us.

    Poked you like a fish to verify you fresh or not (有影吗).

    Wah piang oil!

    Turned out you not only alive and kicking! You are deep ocean fish! Got fight with Blue Fin Tuna or Norwegian Salmon kind!

    Definitely not fresh water fish 😉

    Psst. Be careful of CW. He's the fisherman. More worrisome of all, his travel pictures got show him eating fish dishes…

    He likes fish!

    1. Hi Jared,

      You poked all newbies leh. Just like Army SGT tekan all new recruits. Now a lot of us already POP or even ORD! We call you Encik! Hahaha….

      In my real life, my best friends now, are always those 不打不相识! Small fight is not a bad thing afterall because it allows us to understand each other better. Petty is not my name since day one… Pretty is! 😛

      I am not fresh anymore lar. Seasoned salted smelly fish liao! I don’t want to be salmon, nor tuna to be catch by CW. If really need to be fish, I want to be like Stephen Chow’s “Mermaid”, NOT the big old one in the bathtub hor?

      CW and temperament are lao Encik fishermen! They can fish without hook like Jiang Ziya, and yet can catch!

      Time flies, it has been two years since I started blogging and I am happy to know all you people here! Who peel Onion???

  4. Hi Rolf,

    Nice to know more about your background. I agree that having a technical background before transitioning to a sales person is good, at least this way one know not to over promise and bullshit too much. However, I went straight into sales job too and took up technical stuff along the way. Sales pay more ma… haha!

    I think you really like your sales job and I am glad I have a like-minded peer in this blogosphere! 🙂

    1. Hi Jes,

      Just to let u know I never transit to sales on my own accord. And since graduate, I never expected that I will ever get into sales. Because of how I behave in front of client, my ex-big-boss (not my direct superior) just one day, tell me tmr u become sales! And that's it! Because I was truly quite obedient to my big boss (owner) bcos I respected and trusted him.

      It was never about the money for me!

      Counter intuitively, after I did well in my sales job or managing the sales, I started to hate it (I thought then). Because I thought I wanted more than just a sales role! So I jump ship n became a "commander" of hundreds from tens! I like it a lot also.

      After all these years, I realise for me, its not a matter of I like my sales role or "commander" role. I can dun do sales and still be happy frankly!

      I had seen people who work very hard to become a good sales person. But the character, acumen is not there, it's not there!

      It's suitability also and how a person manage to explore their own strengths after they truly know themselve well.

      For me, ultimately I like to deal with people! Even not sales job, I can still like.

      For u, even not technical initially, no problem. But u know urself well if ur character fit is more impt! And in doing so, do u feel happy and motivated.

      FYI, I had never get a single cents of commission before as a sales personnel! Was all fix salary! Satisfaction is IMPT to me! the joy of closing an order and making deals with people! And the trust, problems, solutions that people n people go through together is also amazing!

    2. Hi Rolf,

      Woah I am very surprised, no commission for sales person? That's weird but good that you don't need money to motivate you. The correct motivation should of course be the long term network that will be established.

      Truly agree that satisfaction is more important. Meeting people energizes me and I am sure you feel the same way. You are definitely suitable to be a commander, so hope I can one day be the same as you 🙂

    3. Hi Jes,

      In my segment, normally it's unusual to have on the contrary. Maybe the value of the contract is bigger and also time take to close a contract can usually be at least 6 months to even 3-5 years.

      If meeting people energize you, then I am sure you will do very well in your career and continue to love what you do.

      I am nobody now, but if I really be somebody one day (in my opinion) is when I am already starting my second career focusing on helping people around me more than earning money.

  5. Hi Rolf,

    You raised a good point about building up the human capital first. It really can improve your personal finance and investment skills later.

    1. Hi FS,

      Tks for dropping by. The seemingly irrelevance in one experience now sometimes may be the most relevant and valuable experience. Just look at Steve Jobs calligraphy experience applying to his computer.

  6. Oh, that's just great, but I'm sure many people need to think about a good business idea before investing. For example, not so long ago, one of my friends registered a company in Hong Kong in just a few days with the provision of a company secretary. This solution has become very convenient and promising for his business, which allows him to significantly save on taxes.

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