Plenty of us reckon elaborate number crunching and analytics are the key to successful investing, but fund manager Roshan Padamadan believes some simple common sense is the key.
Applying a bit of common sense could go further in growing your wealth rather than solely relying on financial ratios and indicators.
"People often talk about the good things about their company, never the bad," says Mr Padamadan, 35.
"The tough part is determining whether a piece of news affects the company's share price, or its real value."
Mr Padamadan, who was born in Kerala in India, cites the example of his father's plastic cane business - deemed a sunset industry in the 1990s.
However, there was demand for the material - which was tied around a wooden or metal frame - and the business continued to be profitable. The earnings were more than enough to send Mr Padamadan and his older brother to university.
The father of two develops his horse sense through extensive reading, something he has enjoyed from a young age.
"If I'm looking at a cement company, I'll read about the industry and the many elements which may affect it," he says. "I read what agents are saying about the property market, economic growth projections, job growth potential, import duties on sand, as well as government regulation on taxes."
He then asks himself how the item of news affects the business.
"Bad news tends to be temporary - like if a firm's share price falls 10 per cent in a day - it doesn't mean its value and core business has gone bad by 10 per cent."
He advises investors to disassociate the price and value of a stock, as its price is often driven by market sentiment rather than the business' future value.
The Singapore permanent resident and his family moved here about four years ago during a rotation with his previous employer, HSBC Bank.
Q: Are you a spender or a saver?
Before my two children came along, I used to save more than half my monthly income. But since their arrival, I try and save about 20 to 30 per cent of my salary, as there are more bills to pay.
This money is then injected into liquid investments such as stocks to yield better returns.
Q: How much do you charge to your credit cards every month?
I don't charge more than $1,000 on my credit cards for personal use. But the amount can go up to $5,000 on the corporate card especially when I travel for research or to look at businesses.
I prefer to use cards which have a better points system. And that was how I found out last year that some cards which claim to be air miles-focused do not offer the best conversion rates.
Q: What financial planning have you done for yourself?
Using Excel, I keep a balance sheet, income statement and cash flow statement on my personal wealth and spending, akin to what companies have to produce.
This helps me to re-adjust my portfolio mix and debts through the different stages of life.
When I was single, my goal was to maximise my returns. But that changed after I got married, and I opted to reduce my debt and leverage and opt for safer alternatives.
I also believe in adequate insurance coverage, not just for the family but the business. After setting up Luminance Capital last year, with capital injection from some friends, I'll be taking out a US$3million (S$3.8million) insurance policy on it to cover the key risks of the business.
My wife also suggested that we draw up a will this year, which can give us an instant snapshot of the assets we have on hand. This can be updated over the years as it changes.
Q: Moneywise, what were your growing up years like?
I used to keep meticulous records of my pocket money and scribble it down on pieces of paper.
My dad taught me the value of money from a young age, and allowed me to sell the old newspapers in the house for extra money.
These extras would then go towards buying gifts for friends on their birthdays, or snacks and treats.
Q: How did you get interested in investing?
I started reading about companies and the stock markets from the newspaper when I was 10. It was mind-boggling then, that the economy or share prices could move so much in a day.
Three years later, I asked my father why the share price of the company he was working at had halved from a year ago. He said things were normal at the firm, and that was my only source of due diligence then.
So I wrote him an IOU note to "buy" his shares from him, at an interest of 20.76 per cent per year, equivalent to his opportunity cost. Two years later, the stock price doubled and I made a 55 per cent profit!
Q: What property do you own?
I do not own any property in Singapore. But I have bought two properties in India.
One is a three-bedroom condominium unit in Bangalore, which is still being built, and spans over 2,000 sq ft. I intend to rent it out or retire there if I leave Singapore.
The second one is a three-storey house at about 2,400 sq ft. I had it built for my parents. They live on one storey, and the other two floors are rented out.
Q: What's the most extravagant thing you have bought?
I bought a vintage limited-edition Audemars Piguet Disco Volante watch for about $10,000 when it was over 15 years old.
My research showed that such old watches hold their value and increase in real terms similar to the world gross domestic product growth rate of 3 to 4 per cent.
The watch is one of 50 pieces made and I believe it will continue to hold its value.
Q: What's your retirement plan?
I hope that the Luminance Global Fund I set up can be my main retirement vehicle. I intend to grow it in the next decade or so and eventually close it and retain it for friends and family.
Q: Home is now...
A rented three-bedroom, 1,200 sq ft apartment near Holland Village where I live with my wife, two daughters and our domestic helper.
Q: I do not drive...
As cars are too expensive in Singapore. I commute by taking the MRT or taxis.