Which Investment Strategy and Approach is the BEST?

[Dennis Ng]

Which is better Fundamental Analysis, Technical Analysis, Psychological Analysis, Market Cycle Analysis etc?

In my opinion, Black Cat or White Cat, the one that catches the rat is a Good Cat.

My "style" of investing is eclectic. I do use Fundamental Analysis to analyse a company's Operations and financial performance. PE ratio, Price to Book Ratios, PEG, Debt-equity ratio, interest coverage, operating profit margin, Operating Cashflows etc...

At the same time, I would take in "intangible" factors such as the "Drive, Ambition and Success-chance" of the CEO.

I also learned from Philip Fisher to "knock the tyres"....we should check out the company by talking to a company's customers, suppliers, employees and even competitors...

I would also take a look (from a broad view) the "Technical Picture" (Charts or Technical Analysis) of a stock as well.

For example, if I want to bargain hunt, I would also consider the TA of a stock, as I realized from past experience that if the trading volume of a share is still high, typically it might signify that the selling is not yet done, and buying the stock NOW one might risk "catching a falling knife".

I also "informally" track Market Sentiment.

Trading volume on SGX is one measure; I also measure the "market sentiment" through postings by majority of the forumers on stock investing forums. Last year, one warning signal that the Bull market is near to its end is that I discovered a "marked increase" of postings by new investors, asking very basic questions....I observed that most Bull markets near its end might "suck in" people who have NEVER invested in the market to start investing.....

So trying to “grasp” market sentiment might be considered a “psychological approach to investing or using behavioural science to investing” (for people who like BIG words).

I also use Big Picture Investing, or what you might call "Cycle Timing or Cycle Investing"......I find that the easiest way to make money with High Returns and Low Risks is when one "ride the trend"......when the trend is UP, it is very difficult to lose money buying stocks unless one is VERY unlucky.

Nature has its 4 seasons, has its High Tide and Low Tide....and similarly markets and economies have its different seasons and high tide and low tide as well...

I observe that most Bear markets lasts 1 year to 3 years, which is one reason I'm only selectively buying stocks in the last few months and still hold majority of my investible funds in Cash...the market peaked in Oct 2007, thus Sep 2007 would be 1 year anniversary, while 3 years might mean the bottom is in year 2010 instead.

Of course, I will not know when is the bottom, my personal experience is that I missed the previous market bottom in March 2003. (I was early and invested all my funds by early 2002). However, even when I missed the bottom, I managed to achieve over 200% returns riding the 5 year Bull Market that followed.

If you are confused by now how exactly I invest, well, don't blame yourself, as I've actually tried to explain that I have an "eclectic" investment style, or to say in Singlish terms, I have a “rojak” investment style.