Plan of Action From Now Until NCAV stocks

I’ve had a life changing revelation on October 2nd 2014 in terms of what investing strategy I should be adopting for a small portfolio like mine. Read specifically under  the “Why I think I’m taking too much risk” section of “I Fucked Up On My Investment Thesis“.

To transition into a NCAV stock does pose a problem, which is I don’t have enough capital to actually construct a well diversified portfolio of NCAV stocks. NCAV stocks rely on diversification since a batch of NCAV stocks generating positive returns is needed to offset failures of certain NCAV stocks when the failure rate is ~20%.

Before I have the funds to construct an 8 stock portfolio (you can find out why at least 8 stocks here), I will invest in Vanguard HK’s regional index funds that are below the maximum Graham Number (P/E * P/B = 22.5) and hedge overvaluation by 2% cash for every 1% overvaluation.If all regional index funds are overvalued, I’ll just accumulate cash.

This process will continue on until I have enough money to construct a 8 stock portfolio and there are 8 stocks that meet the most stringent of conditions. I will then proceed to liquidate all my index fund shares and start my global NCAV stock strategy.


Not advice. No offer. Do not rely. May lose value. Risky. Conflicts hidden/obscured. (Borrowed from Terrence Yang‘s Disclaimer on Quora)


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