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Sunday, 19 October 2014

Investing Lessons From A Chef

What can you learn about investing from a chef?

October 19, 2014

Over the weekend, I came upon a heartwarming story of two chefs with very different backgrounds. Apparently, Japanese Chef Asai Masashi (from the yakitori bar, Bincho) enjoyed an octopus dish at the Moosehead restaurant so much that he wandered into the kitchen to ask the chef for a personal cooking lesson. Instead of shoo-ing away the Japanese chef, Spanish chef Manel Valero gladly shared his recipe, and even walked through the recipe with Mr. Masashi.

What began as a cooking lesson among would-be competitors, soon turned to an ongoing a cultural exchange of ideas, and cooking techniques. After all, both chefs had the same appreciation for the same seasonal ingredients.

How does this relate to investing?

Similar to seasonal ingredients, individual investors may be working with the same ingredients (“shares”) but approaching it very differently (“cooking technique”). Some investors may find refuge in the value camp, while others may just prefer the comfort of dividend income dripping into their accounts quarterly.

While it may be fruitful to find a core approach which resonates the best with your own character, Foolish investors may want to occasionally “wander into the kitchens” of other individual investors to learn new perspectives.

Why different perspectives help

Firstly, Motley opinions on the same business is very much welcome here at the Fool. Different individual investors may view a company from a different lens, and the diversity of opinions can help shape a broader thesis by collecting the best thoughts. The goal here should not be to judge who is right or wrong, but to avoid being blindsided by our own limited perspective alone. One way to go about it through our Tug-of-Fools series. The latest version of this series is about Vibrant Group Ltd (SGX:F01).

Investing maestro Peter Lynch once said that companies do not stay in one investing category forever. Therein contains the next reason for learning outside your core investing approach. It follows that when you invest over long periods of time, your chosen company may evolve over the long term. If you are able to adapt your investing approach according to how the business changes, you may come up with sharper insight, and more relevant conclusions.

For instance, my colleague Stanley, shared an example here on how a company like Sarine Technologies Ltd (SGX:U77) transformed from a turnaround situation (2007-2009) to a growth story (2012 onwards). In this case, knowing more relevant ways to recognize, and value a turnaround situation might have helped the growth investor come up tops from such a scenario.

Foolish bottom line

On a personal note, I have my own go-to approach to Foolish long term investing. That said, having a core approach does not preclude me from continuing to seek new perspectives, and new ways at looking at the same topics.

As a Foolish investor, we can benefit in many ways from our own long term holdings. Perhaps most of all, long term investing also comes with learning for the long term, and continuing to refine our approach. It is from this fulfilling approach that we can continue to reap benefits for the years to come.

Motley Fool Singapore
Chin Hui Leong

3 comments:

  1. Good articles by both Motley Fool and Richard.


    In Richard's posting titled Investing Lesson I've Learnt From Cute Little Penguins and on point no. 3 :-

    http://www.investopenly.com/2014/10/investing-lesson-ive-learnt-from-cute.html

    "We need allies in our investing journey. I believed one of the reason why the penguins parading in group is to give them a sense security. Same thing for investing, at times we might not see the blind spots and hence it would be good to bounce it off with some of your liked minded friends."



    From Motley Fool :-

    "Different individual investors may view a company from a different lens, and the diversity of opinions can help shape a broader thesis by collecting the best thoughts. The goal here should not be to judge who is right or wrong, but to avoid being blindsided by our own limited perspective alone."

    ReplyDelete
  2. Hi MH,

    I never stop enjoying Motley Fool's articles. So intriguing and well written especially those from David Kuo. I read it almost everyday. Struck by curiosity, I wondered if they are a profit organization here in SG?

    Rolf

    ReplyDelete
  3. There are many well written articles from Motley Fool Singapore and yes, it is a private and profit organization here in Singapore and worldwide too.

    http://www.fool.sg/about-us/

    http://en.wikipedia.org/wiki/The_Motley_Fool

    ReplyDelete

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