Category: goodread

Many has tried and still trying to gain wealth from the stock market around the world. Some succeeded, some not so, some might have failed, and probably even more have fallen in between. On the other side, some stay away from the market, thinking of the stock market as gambling, or just simply don’t understand and don’t know what to do.

People often perceive investing in the stock market as trading stocks. Buy low and sell high. Read the charts, listen to news, ride the hypes and some are even IPO hunters. Not that they are wrong, but there are more strategies and ways than what most people perceive, and one of the proven strategies is what we call the Value Investing.

People around the world may know the name Warren Buffet, fewer may know the name Benjamin Graham, and probably even fewer are familiar with the name Charlie Munger or Peter Lynch. Those who seriously invest or even work in the stock market would have probably learnt their ways of investing and even have their strategies into work. However, to average investors, I would say only a fraction of them could really apply their ways and strategies to work.

However, thanks to Lukas Setia Atmaja, the founder of HungryStock Community, people have access to the proof of how people could actually build wealth from stock market, by applying strategies and ways used by the investment guru mentioned above. Two weeks ago on April 21, 2022 he just launched his book on Lo Kheng Hong, the investor who started from nothing to become a trillionaire from Indonesian Stock Exchange.

The book tells the journey of Lo Kheng Hong from his early career and how he started investing in the stock market, until recent years when he has successfully built wealth from investing in the stock market. His journey and thought process themselves are very interesting to follow, not to mention some of the “behind-the-scene” thought process in decisions to purchase stocks that have made incredible profits.

If you’ve been investing in the stock market, you’d find the strategies are very straightforward and easy to follow. However, very few are successful in implementing the strategy, and even stick to the strategy itself. Despite its straightforwardness, it requires diligence, discipline and patience. And those are a combination of qualities rarely found indeed.

It is indeed a good book and a must-read for those interested in value investing, not to mention how it’s motivating and inspiring to stick to the value-investing strategy knowing it really does work. The strategy, simply said is about finding stocks that are valued much lower than it should (mispriced), then wait until they are priced accordingly. As mentioned in the book repeatedly, it’s like buying a Mercedes at the price of a bajaj or Avanza.

How do we find a Mercedes at a wrong price? We simply have to know stocks that are way below its PBV (Price to Book Value) and have relatively low PER (Price Earning Ratio). In order to check whether it’s a good Mercedes, we need to understand the car inside out, and that’s when we need to analyze the underlying company’s financial reports and make sure they have good corporate governance to navigate the company in seizing their market prospects (while making sure there’s indeed a prospect) while building the company’s quality and valuation.

When a question arose in my office, “Do we have the right ‘DNA’ as a digital bank?”, I remembered reading this book a couple of years ago. The book was first published back in 2013, the same year I was hired by a conventional bank in their journey of a digital transformation to become a digital bank. If I remember correctly it wasn’t long after that I picked up this book to learn everything I need to know about digital bank and what it takes to launch one.

Almost a decade later, most of the concepts brought forth in the book have become reality and common practice in a digital bank. I have the privilege to experience both worlds, one in a conventional bank trying to keep up with the digital-banking landscape, and one in a true digital bank launched as a digital bank from ground up.

Several points I picked up from the book are that digital banks are still banks, that should not be all focused in money (products and processes), but to focus on the human, being customer-centric from all aspects. Data is the new ‘money’ and ‘currency’ and data is the secret sauce to build a competitive weapon for the bank.

If I to summarize the book in one phrase it would be that a digital bank is about thriving to become a predictive and proactive bank in the amidst of new types of social and augmented economy.

So, back to the question earlier, I dare say we do have the ‘DNA’ of a digital bank, yet there’s still works to do to nurture the DNA to reach its potential, and we need to do it fast … if not yesterday.

Big Data … or ‘Small Data’ as the author said in the book … which I would personally refer to “Fine Data” is much better than it was when I first read the book, yet it is not as what my expectation would be even now. There’s much homework in gathering and processing data to produce predictive insights (beyond the necessary metrics) to engage in impactful customer development.

One of the earlier books I have read about how to manage and build a startup that actually accurately influenced businesses to adopt agile methodology and build products in a whole new way. Now it’s been a decade since the book first published and we can find in almost every startup (if not all), and even in conventional corporations that the ‘lean-startup’ framework has been incorporated.

The book is divided into three stages: Vision, Steer and Accelerate. The book is constructed as the way a startup would have been constructed as well. Started up from a Vision from its founders, then to Steer its way up a sustainable business model, and to Accelerate once the right business model and engine growth have been identified.

Here we are also reminded that the sole mission of a startup is to find and build a sustainable business model. Eventually, the company needs a managerial discipline like any other corporations that are built to last. At the end of the day, a startup is an infant corporation in a make, not just a fancy team up of creative minds of its founders.

Lean Startup is largely adopted by startups and established companies alike nowadays. The concept is built around the “Build – Measure – Learn” feedback loop. This is where we must build our Minimum Viable Product (MVP) as fast as possible to start taking measurements with good metrics (instead of just vanity metrics), and test the value creation hypothesis or the growth hypothesis in the first place.

Then and by only then you can learn something and decide whether you need to ‘Pivot’ or ‘Persevere’. We hear a lot the word ‘pivot’ nowadays but what is exactly ‘pivot’ in a startup? Pivot is a structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth. There is no such thing as ‘failure‘ as failure is a prerequisite to learning. The important thing is to get to each pivot faster, as it lays out the runway for the startup to take off and fly with a sustainable business model.

Combine the Lean Startup with Design Thinking and Scrum Framework along with several agile methodologies, and modify them to suit your how your startup or company would like to operate to build and launch the new product, and there you have a framework to improve the chance of success.

If you want to find out more or even join the Lean Startup movement, you can visit the website www.theleanstartup.com.