Find Your Edge


Analysis, Circle of Competence, Contrarian, Independent thinking, Investment Process

In my previous post, I wrote that to achieve outperformance or above-average returns, your investment process has to be ‘unconventional’ compared to the majority. And that can only be achieved through originality, independent or contrarian thinking, and making connections from disparate information.  Bill Miller, the former Legg Mason portfolio manager, emphasizes the importance of making […]

September 15, 2019

Scale Economies


Analysis, Moat, Scale Economies, Strategy

Scale economies is one of the seven moats of quality companies.  Scale economies mean the fixed cost per unit falls as volume increases. Fixed cost is indivisible. And indivisibilities are more likely when an activity is capital intensive. The 3 main sources where scale arises are distribution, manufacturing and niche market.  A dense distribution network […]

September 2, 2019

An Analysis on Lafarge


Analysis, Competition, Contrarian, Market, Risk

Background Malaysia’s cement industry is getting hit hard over the past few years. Lafarge, the biggest cement player in Malaysia is down close to 50% from its peak $10 in 2015. The 4 key factors currently affecting the cement industry are: Industry headwinds Higher cost Overcapacity Soft property market Slow rollout of infrastructure projects Higher […]

July 18, 2017