The year 2017 is drawing to a close. It is time to reflect and recap the investing lessons learnt. The largest loss on a single stock this year is Triyards, which has been suspended. In addition, Ezion is also suspended and First Ship Lease Trust (FSL) looks like it is on the edge after failing to refinance its debts on schedule. There are 3 valuable lessons learnt from these episodes, namely, (1) know your customers well, (2) watch out for restricted cash, and (3) understand value-in-use.

The expenditure of an upstream customer is the revenue of a downstream customer. Hence, it is extremely important to know your customers well. If the customers are doing well, likely the suppliers will also do well. Conversely, if the customers are not doing well, likely the suppliers will also fare poorly. This relationship is most evident in the Oil & ...