Peter Lynch's 6 Types of Stock Plays - as applied to SPH, ComfortDelgro, and Singpost

During my time "anyhow hantam" stocks from 1999 onwards, Peter Lynch's books were the rage. Everyone was Peter Lynch this, Peter Lynch that.

Retail investors were enamoured with the fabled 10 baggers.

Which makes sense. It was a time of outsized growth and multi-baggers in technology stocks! Tech is it!

No one were mentioning Warren Buffett... Warren Buffett who? 

LOL!

Peter Lynch had a simple and quite useful classification of stock plays:

1.  Slow growers

2.  Fast growers

3.  Stalwarts

4.  Cyclicals

5.  Turnaround

6.  Asset plays

No, I'm not going to explain what those mean. You go read the book yourself!  

(Or read other blogs who love to provide summaries on summaries of a book. If you photocopy a photocopy of a photocopy of an original, what do you get?)

Its more fun to apply the above 6 stock classifications into real Singapore stocks which quite a lot of old timer Singaporean retail investors like to own.

Let's take SPH, ComfortDelgro, and SingPost.

10 or 15 years ago, these 3 stocks can be classified as either Slow growers or Stalwarts right?

Retail investors include them into their portfolios to add stability and enjoy the dividends as income. Even when there were big tsunami waves as in 1997 Asian Financial Crisis, 2000 Dot-com crash, and 2008 Lehman event, these 3 stocks will always bounce back.

I mean people still read the papers, take public transport, and send mails by post right?

But something interesting has happened.

Notice the overall market as in STI index is still in "bullish OK mode" but the above 3 stocks are down quite a lot. Some even close to bear market territory as in 20% down from their recent highs...

For those who own these 3 stocks, do you still classify them as Slow growers or Stalwarts?

Evidently you do from the way you are averaging down. If lower you would buy even more!

OK, for Stalwarts I still can accept the argument (grudingly); but for Slow growers?

I mean slow growth still means there must be some growth either in revenue, profit, cash flow, earnings per share, dividends per share right?

For the Stalwart fans, I have some "wu liao" (nonsensical) questions to ask you:

1.  Of course you stiil buy the papers in hard copy form. But do your children and grand children buy newspapers in hard copy?

2.  If you own a business or in charge of HR/marketing/advertising for a firm, what's you share of the advertising budget in print today compared to 10 years ago?

3.  Ask your younger family members, do they use Uber or Grab more than taking taxi recently? I not going to ask you. You cheepskate frugal giam kana - you walked.

4.  Just kidding! While we still are on the topic of saving money, when you shop online because you frugal you, how were your purchases from Qoo10 and Lazarda delivered to your house?

5.  Have you been receiving more e-statements from banks, brokerages, CPF, utilities, etc. Of course its to go green and save trees and all. But wait... If more corporations do that...

6.  How much to send a normal letter by mail these days? Hang on a minute! When was the last time you licked a stamp!?

If the reasons we buy into a stock is because of a Slow grower or Stalwart play were no longer valid... What do we do?

Lower we would buy more?

Really???

I mean if its an Asset play or Turnaround play, that's another story. 

But buying in as a Slower grower or Stalwart and hoping its an Asset or Turnaround story, that's making it up as you go along...

Using hope as a strategy is in the same arena as using voodoo, astrology, or feng shui for investing.

Can't say they don't work as they do work sometimes... But its like pissing in the snow on a dark winter's night out in the widerness. 

We know we are making a difference; its hard to tell though.

LOL!