7 Things You Might Have Missed in @TheInvestingIguana’s AMA

Every investor collects quotes. Buffett on fear and greed. Munger on inverting. Lines that last because someone compressed a hard idea into something you can actually carry around.

Last week our comments section produced a few of its own.

Over three days, @TheInvestingIguana took every question the community threw at him — how to build a screening test from scratch, what to do when you’re sitting on a big loss, whether owning all three local banks is really diversification — and kept turning the answers into something you could remember afterwards. A fat yield became a hawker stall with a sudden half-price sign. Three local banks became three stalls in one kopitiam, sharing one kitchen. And on the time he let a tempting yield override his own gearing check:

“That wasn’t an exception. That was hype wearing a nice shirt.”

These are the ones worth keeping. The bold line on each is the quote; the reasoning underneath is why it holds. Short on time — the bold lines alone will do.

7 Answers Worth Saving

Every threshold below is Iggy’s own house rule, not a MAS or SGX limit.

1 If you’re only explaining why you like it, it’s hype.

🏆 Best Question — asked by @swq-HengOngHuat: What was the one stock where you broke your own rules, and how do you tell an honest exception from hype?

“There was an income name where I let a tempting yield override a gearing check and told myself ‘just this once’. That wasn’t an exception, that was hype wearing a nice shirt. To tell a real exception from hype, I ask if I can write down the reason beforehand, in a form that could prove me wrong. If I’m only explaining why I like the stock, it’s hype.”

2 A fatter yield can just be a cheaper price tag.

Asked by @Ron: Everyone says buy when the price drops. But at which level?

“Any number I write today is out of date by the next set of results. What I do is ask what the drop actually changed. A lower price pushes the yield up, and a fat yield can make a weakening business look good on a screen. So I look at the balance sheet before the yield. It’s like a hawker stall suddenly putting up a half-price sign. Worth asking why before you join the queue.”

3 Three local banks can be one big bet.

Asked by @WH the rooster: If I keep buying the three local banks, can I reach my return target?

“Nobody can forecast a return. The three local banks share the same economy and the same interest rate cycle, so three banks is often closer to one big bet than three separate ones, like three stalls in one kopitiam sharing the same kitchen. I’d work backwards: what is this money for, and how big a drop could you sit through without panicking?”

4 Why 4.7%? Start from CPF’s 4%.

🏆 Best Question — asked by @LazyCat: Where do your 3.2% floor and 4.7% hurdle actually come from?

“The 4.7% hurdle is the floor plus 150 basis points. It’s anchored to the 4% that CPF pays on Special and Retirement Account savings, because a share or REIT should pay clearly more than that before I treat it as retirement income. A company’s board can cut a dividend, but CPF’s floor isn’t set by a board. Why 150 and not 130 or 170? Honest answer: it’s a judgement call, not a formula.”

5 What you paid tells you nothing about the business.

Asked by @OneC: Any advice for someone sitting on a big loss?

“I’d separate two questions that tend to get mixed up. One is what you paid. The other is whether the business still passes your checks today. The price you paid tells you nothing about the business, so I’d run the checks as if you had never owned it, and write down which number would change your mind.”

6 Set your lines before you look at any price.

🏆 Best Question — asked by @PSChua: I want to build my own screening test. Where do I begin?

“Decide what the money is for. Pick three to five numbers you can find in any results announcement. Set your lines before you look at any price, and write down why each one is there. Test the screen on companies whose story you already know, including some that went wrong. Then review it after each results season, on paper, not in the middle of a hot market.”

7 When income and revenue drift apart, check the adjustments.

Asked by @x8365D: If a revaluation pushes a REIT’s gearing to 36% without new debt, does the rule still apply? And what’s the first line you check?

“Once gearing crosses 35%, the gate fails, and it fails the same way whether new debt or a valuation cut pushed it there. What the cause changes is the next question I ask: unchanged borrowings with marked-down property values is a different story from a manager adding debt. The first line I look at is distributable income against revenue. When the two start moving apart, I check the non-cash adjustments before I trust the headline distribution.”

🎧 THE CONVERSATION KEPT GOING

Iggy publishes as @TheInvestingIguana on YouTube and Substack: forensic REIT and income research written for one group in particular — retirees, and anyone who needs their dividends to pay for something real.

He has taken some of the questions you asked here into his regular Iggy Answers podcast. The new episode picks up right where #1 left off: When Is It Fair to Break Your Own Investing Rule? Three Tests to Run Before You Do ▶️

📖 Want the full picture? Click here to read the full interview and every reply.

🏆 The Winners

Captain Leo’s 3 best questions are marked 🏆 above — congratulations to @swq-HengOngHuat, @LazyCat and @PSChua. Each wins a SGD 2 stock cash voucher.

✅ Task Coins have been fully issued. Vouchers will be sent to your account within 2 working days — claim them at “Me” > “My Rewards”.

THANK YOU, @TheInvestingIguana

For three days of replies, every one signed off “Cheers, Iggy 🦖”, and for explaining gearing with hawker stalls and yield with HDB rent. At least one of them was written straight after a 90-minute gym session.

Next up · Episode 03

You Guessed Him First

Plenty of you called it in our last recap. @optionspuppy spent 23 years as a maths and science tutor, and he explains options the way he used to explain a syllabus.

Bridgers’ Stories · Episode 03 — @optionspuppy

📅 Episode 03 goes live on Fri 16 Oct · AMA runs 16–18 Oct, 23:59 SGT

Follow @optionspuppy so you don’t miss it, and start thinking about your first question.

DISCLAIMER

The views from this post are the Longbridge community members’ own and do not represent the position of Longbridge or its affiliates. Nothing here is investment advice or an offer to buy or sell. Any securities mentioned are examples of the guest’s own decision-making, not recommendations. Markets carry risk — do your own research.

No fee was paid for this interview. Participating readers are eligible for the community incentives described above. As our guest, Iggy receives a Verified Creator badge, a stock cash card and Longbridge merchandise.