Some graduates may recall seeing him on stage conducting our MIP tutorials, others may have received some guidance from him when he was coaching some of the mastermind groups.
An unassuming young engineer, Jun Qiao was fuelled to change his investment results when he lost more than $6000 dabbling in the stock market, raking in stocks he did not understand.
Presently however, he is in possession of a stock portfolio with more than 300% returns and he attributes his current results to diligence, teaching others and making a lot of mistakes.
Tell us about your investing journey
When I was in the army, I was already doing Forex, hoping I could earn some extra money. However, it was quite troublesome for me as I had to monitor them on a daily basis. After 2 years, I’ve just managed to breakeven and even gained a lot of emotional stress in between.
I went to university afterwards and during one of my business courses, we were tasked to interview the CEO of a company in Singapore; a company that was supposedly the first to make thumb drives in the world.
My friend and I were so impressed after we’ve spoken to the CEO, we bought into the company’s shares. However, the following year, the share price halved and I’ve just managed to sell it off at my cost price 3 years later.
My friend on the other hand, held on to his shares until the company was privatized last year, paying their shareholders a much lower price as compared to our cost price.
In 2013, after I’ve started working, I became bolder with my investments as I have more capital to allocate.
That was also when my friend told me about MIP.
At that point of time however, I was not ready to give in and insisted to continue with my own ways of investing by reading books, financial reports, forums and analyst reports. I also followed the analysts’ advices on which companies to invest in.
Out of the 3 companies I invested in at that point, 1 gave me a 30% return and the other 2 made me lost 90% and 66% respectively. All in all, I lost more than $6000.
I finally admitted that I needed guidance and joined MIP in Feb 2015.
To this day, I kept one of the loss-making stocks to serve as a reminder for myself.
Tell us one value investing mistake you made that everyone else can learn from
I bought into a company whose industry I did not properly understand, and I did not bother to clarify my observations with the company’s IR or anyone else.
At one point, one of their major segments was underperforming, which I thought was an alarm bell and I quickly sold my shares. I didn’t realize that there was a structural change within the industry and that was perfectly normal.
My buying price was $0.30 per share and I sold at around $0.50 in panic. Right now, the company is trading at $0.80 per share and if I’d done my due diligence back then, I could have gotten myself a 2-bagger by now.
How do you learn the fastest?
I learn best when I teach others.
Even when I first started joining my mastermind group as a member, I attempted to do the entire assignment by myself instead of just focusing on my own portion.
That was when I learned that it is the most practical way to analyze a company as I am able to see the company’s big picture much more clearly.
Only after I’ve understood the company’s business model and the industry would I be able to think of the company’s moat and risk.
They are all related.
How long do you spend in a week to analyze companies?
I have time pockets throughout the day and I usually use them to read up on announcements, books and maybe do a quick industry research.
Putting all of these together, I should be spending about 15 hours a week analyzing companies.
Where do you find your company information?
I focus mainly on Singaporean companies, so I would go to websites like SGX for announcements, NextInsight and ValueBuddies.
Google Search and Google Images can also be surprisingly helpful.
What would you like tell other investors out there?
Always track your results!
Write down your buy and sell reasons for the companies that you’ve bought and review them every half a year. Is the buy reason still valid or is it time to sell?
Same goes for those that you DO NOT want to invest in. Have the circumstances changed?
If you have a group to discuss your company analysis with, remember to exercise your own independent thinking and not to just follow the herd.
Most importantly, make investing fun and be daring to make mistakes, because that’s how we learn.
Jun Qiao (centre) with our mastermind group