I used to be skeptical towards those who pay high price for certain item that carries similar utility as the cheaper version. Are they paying for just the brand or am I missing something here?
So I decided to give it a try. The first expensive item I bought was an Apple MacBook. Only then I realised that not everything that’s cheap is a value buy! The experience, satisfaction and value that was derived from that single purchase outweigh all other purchases I made on laptop, combined!
On that day I learned a very important lesson in life, and eventually dictate how I approach investing:
“Price is what you pay, value is what you get”
And this measurement of value is what I refer to as QUALITY. We are more likely to derive high values from quality items despite the high price we pay, but overtime, this values compound and will far outweigh the initial price we pay. True enough, I used my MacBook for a long period of 10 years, compared to all my other laptop which usually last me 2-3 years before they started to annoy me with all the lagging and virus problems.
Translating this into investment methodology, these are the quality criteria that I am looking at when assessing a company to invest in:
– competitively advantaged businesses with quality MOAT
– significant reinvestment potential with long runway
– managed by excellent capital allocators with proven track records
– shareholder-friendly management teams, communicate clearly and constantly to shareholders
I have been in the look out for these type of companies in Bursa Malaysia since I started investing 8 years ago and I do believe there are hidden diamond in our local market that are just waiting to be discovered.
If you are keen, I welcome you to embark on this exciting journey with me as I slice and dice 1000+ companies in Bursa Malaysia and share my insights on them here, so we can together sharpen our saw and uncovered gems that maybe a find of a lifetime.
