Monday, July 7, 2014

Interview With Alvin Chow Of Big Fat Purse

Alvin Chow of Big Fat Purse
I am honoured to present to you my next interviewee, Alvin Chow (owner of the Big Fat Purse). He is an author, a trainer as well as an entrepreneur who are here to stay. If you have not heard of him or his blog, it is time for you to get familiar with his sharing here.
I've read numerous reviews from the peer investors/bloggers attended his one-day Value Investing Mastery Course and were humbled by his honesty as well as openness in his sharing. In fact, I am going to attend his course this coming Saturday too with another friend. So very looking forward to it.

From his detailed and lengthy sharing of his investing journey and experiences, I truly admire his professionalism and seriousness in dealing with the peer investors.
Now! Let's get up close and personal with Alvin....and learn something out of it.   

Q1 : Can you give us a brief introduction about yourself?
I was a spendthrift when I was young. I would spend every single cent of my allowance and I was allergic to saving. I came from a middle-class family. Although we are not rich, we have more than enough to eat.

It was not until age 20 that I became interested about money. I started to read personal finance books and believed the concept of letting money work for me. Sadly, I didn't take much action to grow my money. Over the next few years, I was approached by a few insurance agents and I purchased quite a number of products. I over-stretched my ability to pay the monthly premiums and decided to terminate some of the contracts. It was a lesson which I will remember - easy to commit to a new insurance plan, but difficult to get out of it.

When I was in my third year of undergraduate study, I began to learn about stocks and warrants. It was also a time which I started With little capital, I could only buy warrants of mid to big cap stocks. It was 2007 and making money in the stock market was a breeze. I bought Cosco Corp warrant and made 100% in one week. I thought I was a stock market wizard. I would monitor the stock market all day and not listen to lectures. I thought I could treat the stock market like an ATM machine. My luck ran out soon and I stop punting after a string of dismal results.

Humbled by the market, I was keen to learn and I attended a 3-day trading course. I opened a CFD account and shorted the market as it was 2008. I was lucky again - I doubled my capital by shorting. Inexperienced as I was, I did not manage to go long early enough to when the market rebounded in 2009. The opportunity wasn't clear to me at that point in time.

I continued to learn in those years, reading lots of books, attending more courses, trading and investing in the market, and writing my experiences on I also wrote a book, Secrets of Singapore Trading Gurus, after I was inspired by Jack Schwager's books. I wanted to do one with local context and published it in 2011.

Q2 : Are you a full-time or part-time investor at the moment?
I do not know how you would classify my situation. I quit my job 2 months ago and I am not looking for employment except working on BigFatPurse as a business and a passion. I cannot rely my living expenses on investment alone, but I can say trading income could supplement part of it. I invest in stocks to grow wealth and trade options for income.

Q3: When (at what age) did you start investing in shares and who has influenced you the most?
I believe I have answered the above.

Dennis Ng, Michael Leong, Eric Kong and Dave Foo have the most influence to how I am investing and trading now. And of course, we all stood on shoulders of giants and some of my influencers got their inspirations from familiar gurus such as Benjamin Graham and Walter Schloss.

Q4 : Do you view yourself as long-term (holding shares in years), short-term investor (holding shares in days/months) or mixture?
I invest in stocks for the long term, and I go for capital gain instead of dividends. The holding period can be expected to be the duration of a bull cycle, about 5-10 years.

At the same time, I trade options, which last for a few weeks.

Q5 : What is your basis of selecting the shares to invest (e.g. basing on fundamental analysis, technical analysis or other methods/sources [share a little bit more details if it is the latter])?
I use fundamental analysis to select stocks. My approach is quantitative first. This is because we tend to be bias after we read the stock name. To be more objective, I look at numbers first. If the numbers are good, then I dig further into the company.

The numbers I look at are mainly asset values, which I termed it Conservative Net Asset Value (CNAV), where I apply a 50% discount to certain asset value as a margin of safety. You would be surprised we have quite a number of stocks that are trading way below the CNAV value, despite a discount of 50% being applied. These are cold and unloved stocks and I like to pick them up before people notice them. To do so, I leverage on a CNAV database which the BigFatPurse partners have built together. I can easily screen through the entire SGX stocks to find all these gems. Of course, I apply additional criteria to reduce the chances of getting into value traps.

I tend to buy into small caps as they tend to be unloved and potential returns are higher due to their smaller supply of shares. During a bull run, unloved stocks can be in high demand and that becomes an opportunity to off load them. In addition, these unloved stocks are fundamental strong or have negative news about them but nothing significant that could make the business go bankrupt. Even if they do, the liquidation of the assets should be enough to cover most, if not all of the cost of my investment.

Q6 : What is your targeted and achieved annual rate of returns (%) so far?
My targeted rate of returns : 15% ;
My current strategy took many years to evolve and has matured in Aug 2013. As at 7 Jul 14, the portfolio has returned 28%. But I would say to take this result as a pinch of salt because the period of assessment is not long enough. I would expect the long term returns to be between 10-15%. I am building a fund with some partners and thereafter we should be able to have audited results to show.

Q7 : What is your most recommended online investing resource (site or blog) to share with our readers? 
I would recommend my own site,! Haha. I usually avoid financial news site like CNBC as they created too much noise that may arouse your emotions unnecessarily. 

I use Shareinvestor to monitor the corporate actions and announcements of my stocks. I rarely read online as I do not have the habit. I prefer to read books. Some of the good online resources are

What has worked in investing
Charlie Munger on the Psychology of Misjudgment

It also depends on what your readers are interested to learn. If they like passive investing, they can read Andrew Hallam and Cheerfulegg.

If they are into value investing, especially the dividend approach, they can read
investmentmoats, ASSI, 15HWW, Chris Ng, BullytheBear, CreateWealth8888 and many more authors whom they can find on It is great to see our local investing community are stepping up to increase awareness and financial literacy of Singaporeans. We need a vibrant environment and diversity of thoughts to sustain a competent pool of retail investors.

Additional blog recommended by Alvin @7th Jul 2014 : Help Your Money

Q8 : Besides shares, what other investment are you involved in (e.g. Real Estates, Bonds or REITs etc)?
Options. I would classify REITs as shares though.

Q9 : What is your Portfolio Distribution like? 
I am 100% in equities and I do not have bonds to cushion the drawdown when the stock market crashes. 

Q10 : If the readers what to get in touch with you, how to get hold of you? (Sharing of your website/blog/social media  profile etc..) 
I write at and you can join our Facebook Group.

By the way, if you are a retail investor and would like to be featured in my "Interview With The Fellow Investors" blog series, please feel free to email me at

Also, for the complete list of my interviewees and their posts, check it out here.



  1. Thanks Alvin for recommending my blog :)

    1. Happy to know many of the familiar bloggers/investors are recommended by him too ;-) You are really morphing into butterfly liao ;-)


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