Over the weekend, I was invited by Rusmin from The Fifth Person to attend Investment Quadrant 3.0, a investment course focused on value-growth investing. Having attended their Dividend Machines course in the past, I was curious to see the difference in content and maybe learn a thing or two in the process. Here is my in-depth course review.
Note: I was given the opportunity to attend the course for free with no conditions attached. I was even offered a chance to attach affiliate links to this review, which I declined as I feel that would be “double dipping” on course fees and commissions. The views presented in this review are my own.
For a fee of USD 347, you get:
- Lifetime access to the online e-learning platform where you can review videos on the Investment Quadrant method and case studies. You can also download checklists and ask questions on the private members’ forum. Instructors Rusmin and Victor are quite responsive to questions, typically answering them within 1 day.
- Unlimited runs of Full day workshops conducted by instructors Rusmin and Victor
- 30 day full money-back guarantee
About the Method
The course teaches you the overall process of investing according to the above flow. It also dives in depth into the idea selection part using their proprietary method.
The Investment Quadrant is a method that seeks to identify good value-growth companies to invest in. The method has 4 parts – the Business, Financials, Management and Valuation quadrant.
The Business Quadrant talks about how to evaluate the company’s following characteristics:
- Business model – How to see if the business model is sustainable and scalable
- Growth Drivers – Factors that will drive future growth in the company
- Economic Moats – Factors that make the company’s business more resilient
- Business Risk – Factors that may go wrong and affect the company’s business
The Management Quadrant talks about some common indicators that can tell you about management’s character and thinking. These indicators hope to sift out management who are aligned with investors and walk the talk (and are not full of hot air)
The Financials Quadrant talks about how to perform financial analysis on a company. Areas covered include:
- Income statement analysis
- Balance sheet analysis
- Cash flow statement analysis
- Ratios relating to profitability, activity, liquidity and debt
The Valuation Quadrant talks about how to value the company based on certain ratios and based on those ratios, determine intrinsic value and an entrance strategy.
Other Areas Covered
The method also talks about areas like investor psychology, determining an entrance and exit strategy, stock screening tools and strategies, and portfolio management.
The Live workshop is typically conducted at the YMCA in Singapore or at a hotel in Kuala Lumpur for Malaysian members.
The workshop mainly focuses on 3 of the 4 quadrants, with the Financials Quadrant assigned as pre-work. This is probably due to the complexity of Financial analysis and it would probably take a whole day on its own to explain everything from scratch.
The live workshop took the whole day from 9am to 7pm, with Victor covering the Business and Valuation Quadrants, and Rusmin taking the Management Quadrant. Both trainers had their usual presentation flair and had plenty of interesting examples and case studies to discuss and illustrate their points.
What I liked about the course
- Blunt Honesty – Rusmin and Victor gave honest truths that their method is very time consuming to do on your own. Also, they did not advertise a 100% win rate.
- Real Knowledge – The knowledge shared are generally credible knowledge that securities analysts use for their own reports.
- Examples and Case Studies – For me, the most interesting takeaways I had were from Rusmin and Victor’s experience and observations about specific companies that are still listed today.
- Limited upsell – A premium membership was promoted at the end of course called Alphalab and that was about all the upselling you will get. I would say sign up if you want and have the money to take advantage of it. There’s no obligations or locking you in the classroom until you sign up.
Potential issues participants may face
- Difficulty in application – Let’s face it, securities analysis is hard work. Going through 10 years of annual reports to collect data and understand management is not exactly everyone’s cup of tea. Financial analysis was not covered as part of the workshop and it is an area that is as much an art as it is a science. I can’t emphasize enough the amount of effort their method requires.
That said, anything worth doing takes effort and if you are willing to put in the work, I’m sure you will find it very rewarding when you find your next multi-bagger.
Who should attend
The Investment Quadrant method has a high level of difficulty (especially if you have little to no understanding of financial statements) and requires commitment to execute. As such, you should only sign up if you are:
- Not scared of hard work
- Willing to take a higher amount of risk
- Have the money to take advantage of the opportunities you identify
- Want to make money predominantly from capital gains rather than dividends
- Prepared to invest overseas
Otherwise, it might be better if you sign up for Dividend Machines next year as I think it is much more beginner friendly and watered down.
Investment Quadrant vs Dividend Machines
One question you may have is the difference between Dividend Machines and Investment Quadrant, especially if you have already attended Dividend Machines.
Having attended both courses, I would say there is some overlap between the 2 courses in terms of how you evaluate companies as both have a basis in using the Investment Quadrant methodology.
The difference is that in Investment Quadrant, they teach you the full method to evaluate all stocks, while in Dividend Machines, they modified and simplified the Investment Quadrant methodology into a 8 step checklist to help you identify exclusively good income stocks.
The other main difference is that a substantial amount of time is spent on evaluating REITs in Dividend Machines, while this is not covered at all in Investment Quadrant.
Based on these differences, I would say Investment Quadrant is more advanced and heavy on financial analysis, while Dividend Machines is easier to understand for beginners. If you really only want to attend 1 of them, it is ultimately a personal investment objective and style choice. You would need to ask yourself these questions:
- Do you prefer looking for high growth companies or stable companies that pay a steady stream of income?
- Do you have a higher risk appetite or lower risk appetite?
Investment Quadrant is budget priced, fundamental analysis-focused, investment course with the goal of equipping you with the tools necessary to find your own multi-baggers. If you are looking for a course that teaches real knowledge, limited upsell and fluff that also teaches you to identify solid growth companies, this is the course for you.
While I may have some differences in opinion over some minor details, I can’t argue that large parts of what is taught is fundamentally sound and useful to investors. With a 30 day money back guarantee, I would say no harm trying anyway.
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