SWI Manual 🌘

How to get the most out of Sleep Well Investments.

Hi, 5700+ sleep-well investors,

We are here to protect and grow your wealth while taking low risk. But risk is only low when you know what you own more than the market. I’ll front-load 100+ hours of research to ensure you only focus on businesses I consider low-risk.

To get the most out of Sleep Well Investments, this article provides a clear roadmap to the what, how, and why your wealth can be safeguarded by following my investment framework.

**As a reminder, Sleep Well Investments studies anti-fragile and time-tested businesses to make sure they generate predictable and above-market returns on our investments.**

First, they earn a ‘sleep well’ label if they pass my rigorous Sleep Well Checklist (step 1), which gives out a score (step 2) to each business.

Then, their resilience is ‘stress tested’ against external adversities. I examine this in my deep dives (step 3).

Next, I track their KPIs using the Sleep Well Thesis Tracker (step 4) and buy/sell if they add value to the Sleep Well Portfolio (step 5).

I take a very methodical and patient approach to my portfolio construction, and I don’t let my emotions control my decisions.

I intend to own around 15 businesses. I don’t chase ‘hot’ or ‘dirt cheap’ stocks nor flip ideas. I prefer to have a deep understanding and own great companies, and add slowly over time. I sell primarily because I find better opportunities. Some examples of annual returns for my picks are: Wisetech, 44% CAGR since IPO in 2016, and the 22nd pick, 220% CAGR since 2021. There is little need to flip around ideas.

Let’s go into the details of each step.

Framework in focus

If you are new to Sleep Well Investments, I present the flow chart again and explain the steps (with links to even more details).

1. Sleep Well Investment Checklist - used to examine whether a business fits my investment philosophy. I examine each business against 9 criteria, which belong to one of these 3 categories: ‘Survivability’, ‘Endurance’, and ‘Valuation’.

   ‘Survivability’ is the most important, followed by ‘Endurance’, then ‘Valuation’.

   🔗 click here - to learn how I built the checklist

   

2. Sleep Well Investment Scorecard - I then give a score to each of these criteria. There is a maximum number of points a business can get for

   ⏳ Survivability: 13 points
   🏃🏻‍♂️ Endurance: 4
   💰 Valuation: 3

   Each of the criteria under these 3 categories also has a range of points; for example, a business can score 0, 1, or 2 for ‘Management’, or be deducted 1, 2, or 3 points for the level of competition under ‘Competition and Market Share’. There are 20 points in total. I consider a business investable if it has more than 13 points. Please see the example for Wisetech (WTC) below.

   🔗 link here - to learn more about the SWI Scorecard

   

3. Deep dives. A deep dive is a comprehensive analysis of a company, which should help you understand the reasoning behind each score.
   🔗 link here - to learn more about what a deep dive is and how I write my deep dives
   🔗 link here - for all deep dives
   
   

4. Thesis tracking - I track the progress of each business in SWP and decide whether they still deserve a place in the Sleep Well Portfolio regularly. You will receive a write-up when any substantial changes affect the company. I also update the Sleep Well Scorecard if necessary.

   🔗 link here - to learn more about SWI Thesis Tracker

   🔗 link here - for thesis tracking write-ups
   
   

5. Sleep Well Portfolio (SWP) - Annual subscribers get full access to the SWP, which is my daughter’s JISA with a redemption date of 2037. You can use this to build your own sleep-well portfolio from scratch.
   🔗 link here - to learn more about the portfolio

   🔗 link here - to track the portfolio in real-time (available to annual subs only)
   
   

6. Buy/Sell Alert - For transparency and disclosure, I share my detailed thought process behind every BUY and SELL. I also review the portfolio monthly.
   🔗 link here - to view all buys and sells (available to annual subs only)
   

I believe in ‘knowledge is key’, so as a paid member, you will also get access to

1. Key lessons I’ve learnt throughout my investing journey

2. My write-ups on quality traps, i.e., companies that seem like a good investment at first but under the surface lie more permanent issues.

Disclaimer

As a reader of Sleep Well Investments, you agree to our disclaimer. You can read the full disclaimer here.