MEV Value LLC - MEV Value LLC

What I Believe

Every client should have a long term plan and build a portfolio based on his/her goals, risk tolerance, investment horizon, tax rates and unique circumstances. Periodical reviews are necessary to ensure his/her plan evolves with shifts lifestyle. During turbulent years, client’s long-term plan will be an anchor to prevent mistakes due to panic.
The US and the World economy will continue to grow in the future. In the next decade, there will be 1% population growth, 2% productivity growth and 2-3% inflation. The sum of these three growth rates indicates that the overall economy is expected to grow approximately 6% in nominal term.
Such growth will reflect itself in the increased resources and profits of our important corporations.
Such increase will mainly take place through the normal process of investment of new capital and reinvestment of undistributed earnings.
Therefore, the overall equity market will appreciate about 6% and the overall equity market value will double in the next ten years.
Historical data shows that over long term, stock market has outperformed all other asset classes, including bonds, real estate, gold, and commodities. I believe stock market will continue to outperform in the future. However, other asset classes, particularly bond, will be necessary to reduce overall portfolio volatility.
Bond yields are historically low and I believe bonds overall will have a very low return in the next decade. Many investors wrongly believe that bonds and bond mutual funds are safe. That belief might be disastrous. As interest rate goes up, bond price will go down. The longer the maturities, the more sensitivity of bond price to interest rate change. In today’s environment, the riskiest investment is long term bond and clients’ bond portfolio should be consist of high quality and short term or medium term bonds or bond mutual funds.

My Investment Philosophy

I believe price is what you pay and value is what you get. Due to investors’ emotion and biases, there are large discrepancies between value and price, particularly during turbulent years like 2009.

In short term, stock market is a voting machine. Investors’ sentiments and emotion would drive the movements. In long term, the stock price is determined by the earning power of the underlying business

My job is to conduct careful analysis of both quantitative and qualitative factors to determine the future earning power of a business. My investment horizon is usually 5 to 10 years and short-term factors, such as election, natural disaster, wouldn’t have impact on my investment decision. My selection criteria are the following:

It must have an easy to understand business model
The business must provide essential products or services
The business must have endurable competitive advantage
It is managed by honest and competent managers
The future prospect must be promising and growing
It sells for a reasonable price.

My Credential

Chartered Financial Analyst (CFA)
CFA is a highly regarded financial designation recognized worldwide. According to CFA Institute, earning the CFA credential required diligence, tenacity, and significant commitment of time and energy. The CFA credential is the badge of distinction in the investment management profession. It represents a deep knowledge of all things investing, a commitment to ethics, and a passion for always putting investors first. Throughout the global investment management profession, CFA charterholders are recognized for their unwavering integrity and serious commitment to uphold the highest standard of professional conduct.

Certified Financial Planner (CFP®)
According to CFP Board, CFP® certification is generally recognized as the highest standard in personal financial planning, qualifying financial planning professionals to provide their clients with comprehensive financial advice. Most people think all financial planners are “certified,” but this isn’t true. Just about anyone can use the title “financial planner.” Only those who have fulfilled CFP Board’s rigorous requirements can call themselves a CFP® professional. CFP® professional are held to strict ethical standards to ensure financial planning recommendations are in your best interest. What’s more, a CFP® professional must acquired several years of experience related to delivering financial planning services to clients and pass the comprehensive CFP® Certification exam before they can call themselves a CFP® professional.

Education

Ph.D. in Finance from Syracuse University 2003;
MBA Clarkson University 1999
BA Economics Wuhan University 1997