What bartending has taught me about investing
Tuesday, October 27, 2015 Jes Finance , Guestpost 0 Comments

Guest post by Alien

Alien is a very good friend of mine who shares the same interest in investing and is pursuing his passion in bartending

1. Scuttlebutting, opportunities are everywhere

The famous term was coined by legendary investor Philip Fischer. If his mantra is read carefully, it highlights that the person providing the information has to feel as though he/she is not in danger of being quoted. What better to achieve this than over a couple of drinks to get into the mood?

Working behind the bar almost 4 years now, I can attest to information being given freely, really a lot of information! We get people talking about the search engine industry, the data security industry and the fast food industry just to name a few. (Names of these companies have been omitted in a bid to protect the alcohol guzzling employees, no point losing business over a blogpost I say :D)

So the next time you have had enough of numbers from the financial reports and just needed a stiff drink to break that headache, head down to the nearest watering hole! You never know who you might meet across the bar and what new information you might learn!

2. Diversification sometimes provides less value

If you are new to cocktails and want to try everything, be my guest. It is akin to investing and having so many different companies in the different industries to look at. But over time, your favourites will surface. Myself, I like negronis and manhattans. They make my night, every single time. So although I can diversify and try the different signature drinks at each bar, over time, I stick to those I know consistently make me happy. Just like my basket of stocks which I have well researched and analysed. Invest in only what you know, and drink only what makes you happy. Rule of thumb: If you know enough to invest at the right price, you can sleep soundly at night!

3. Look for uncomplicated, good companies

A cocktail can come across as being a complicated drink, some with upwards of 5 ingredients in a glass. Sometimes less is better. The best cocktails in my opinion do not need so many ingredients, just good ones to speak for themselves. Not to say investing in conglomerates are bad (read, Berkshire Hathaway), but ask any retail investor about the true businesses of Keppel, Sembcorp or Astra and you can be pretty sure none can explain the business in its entirety. Most likely they will get lost in the jargon and can only name a few which most likely are the business units keeping the company in the green. If you are like me, a simple guy, stick to simple companies that are easy to understand and do well in their circle of competence. Some ideas might be Colex, Chip Eng Seng and Riverstone. Cheers!