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Sslee blog

Author: Sslee   |   Latest post: Sun, 3 Feb 2019, 1:41 PM

 

I3 Investment Bloggers day: Love triangle (FA-BS-TA): intrinsic value of INSAS

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Dear all,

I3 stands for:

Independent, Intelligent, Informed.

I3investor as an independent portal, has enable people from many different background, culture, experience, age group to contribute their unique opinion, philosophy, strategy and information that have benefited many i3 readers so that they can make an intelligent and  informed decision on how to manage their own risk and investment portfolio.

I am a litter bit unlucky to know of this portal only on 31th August 2016. If only I had knew of this portal much early, I would have avoided many of my stupid mistakes when I started off my investment journey in early 2016. Any-how it is better late than never.

“To err is human, to forgive divine” - Alexander Pope

“Everybody deserves a second chance, because life is too complicated to get it right the first time” - SkyLug.

You can choice to be very mean, un-forgiven and cruel or to be very kind, forgiven and considered. I choice to be the later and had forgiven my past mistakes and move on with my new found second chance in investing given by I3investor.

Hence I would like to thank all the i3 bloggers and commentators in building I3 to such a wonderful place for greenhorn like me to pick up the “knowhow and know what” on the intricate and complexity of investment in how to avoid many pitfall and be a survival and a successful investor.

This afternoon I am honor and at the same time humble to take the stage and deliver my maiden talk on investment (Love triangle (FA-BS-TA); intrinsic value of INSAS) at Investment bloggers day.

Technical Analysis (TA)

Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activities, such as price movement trade volume and focus on patterns of price movements, trading signals and various other analytical charting tools to evaluate a security's strength or weakness. Thus TA pattern is influence by Greed & Fear (Behavior pattern) and will be most effective if use together with FA Qualitative study of Economic condition and Industry condition that create greed and fear where people will panic buy or panic sell as no one will look at FA quantitative financial data

Fundamental analysis (FA)

Fundamental analysts study anything that can affect the stock's value, including macroeconomic factors (e.g. economy and industry conditions) and microeconomic factors (e.g. financial conditions and company management). The end goal of fundamental analysis is to produce a quantitative value (Intrinsic Value) that an investor can compare with a stock's current market price, thus indicating whether the stock is undervalued or overvalued. Fundamental analysis is a method of evaluating a stock in an attempt to assess its intrinsic value.

In summary Fundamental Analysis cover:

QUANTITATIVE

Financial data/ratio contain in current and past financial report.

QUALITIVE

  • Economy condition (Current and future)
  • Industry condition (Current and future)
  • Company management (Current and future)
  • Profit growth prospect (Current and future)

In short what many people term as Business Sense (BS) is actually the qualitative part of Fundamental Analysis. BS is subset of FA.

Beside explaining the relationship between TA, FA and BS, I emphasis important of reading financial report: P&L statement, Balance sheet, Cash Flow and working out the intrinsic value.

Definition: Intrinsic value is the Present value of the investment of all the expected cash flow over the lifetime discounted at the appropriate discount rate.

Intrinsic value = (CF1/ (1+d)^1) + (CF2/(1+d)^2) + ----- +(CFn/(1+d)^n)

  • Where:
  • CF = Cash Flow in the Period
  • d = Discount rate
  • n = The period number
  • This Intrinsic value is actually a Discounted Cash Flow (DCF)
  • Example of intrinsic value of INSAS is then the Sum of DCF expected cash flow from varies business streams.
  • For INSAS assets rich case, it is my opinion that the liquid assets minus total liabilities should be added to this intrinsic value.

My main take away is not on promoting INSAS but promoting shareholders activism: Shareholder activism is not a privilege - it is a right and a responsibility. When we invest in a company, we own part of that company and we are partly responsible for how that company progresses. If we believe there is something going wrong with the company, then we, as shareholders, must become active and vocal- Mark Mobius.

I admire Jack Ma priority “Customer first, Employees second and Shareholder third”.

Without customer there will be no sales. Without employees there will be no product for sales. Without shareholders fund there will be no capital to employ employees to make product. Or in other words as long as customers is happy (Buy more), employees is happy (produce more efficiently) then for sure business will grow and shareholder will enjoy the dividend/share price appreciation and proud to be part owner of such a wonderful company. (Ask Jonny English to explain what a wonderful company is?)

But in Malaysia I am very sad that some of the CEO of public companies are self serving in dipping their hand into the cookies jar, treating the company as their own private piggy bank and their priority is Me first, Me second and Me third.

Nothing destroy the share value of the company faster than a self serving or a conman CEO and many people lose his/her life saving and some even commit suicide because of insider con job/scam. The conman/scammer get away with murder because good man do nothing until when the victim is his own family member or close friends then only they regret not doing something to stop or expose the scam.

We as minority shareholders are perfectly capable and able to stop it before it happen if we just care to attend AGM ask the hard questions and hold the BOD and external auditor accountable. Follow up and report any irregularities/red flags to SC/Bursa.

Do not live a life of regret, remorse and guilt like spider man (Peter Parker) due to his selfish misjudgment and let go a robber that he can easily caught, who later turn up as murderer of his Uncle Ben. Knowledge is power and with great power come great responsibility.

I would like to thank the organizer for giving me the opportunity to share my presentation with you. I’m grateful to i3 bloggers and commentators for sharing their knowledge in i3 because Knowledge, if kept to your-self, has no value. Only by sharing, we create the value. Let’s build a community of Giant Redwoods in i3 where we support and hold up each other.

Thank you
 

In giving we receive

https://www.youtube.com/watch?v=GuTZUAIHKbo

 

Share this

  3 people like this.
 
probability no video?
02/03/2019 10:46 PM
Sslee Dear my sister probability,
Your brother are too nervous that he forget about video.

Sorry
02/03/2019 10:54 PM
Bruce88 A very good turnout...
02/03/2019 10:55 PM
VenFx Sir sslee, video plsss ...

Photos kind of blur ler !
02/03/2019 11:01 PM
calvintaneng GREAT!!

Photo very blur leh

Where are you standing SSLee?

Also where is bro Jon Choivo standing?
02/03/2019 11:28 PM
kcchongnz Well done SSLee.
03/03/2019 6:19 AM
winnerz Good job, dude!
03/03/2019 10:07 AM
Sslee Dear Calvintaneng,
Thank you for reminding me that my old hand-phone need an urgent update. I will take profit on some of your “chun-chun” call and buy myself a brand new Huawei’s Nova Lite 3 or Mate X.
By the way the handsome not so old man with formal dress (Jacket) is me and on my right is young and handsome Jonlohsoh.

Thank you
03/03/2019 10:37 AM
probability omg.... cute Jon like a papa bear now!
03/03/2019 11:03 AM
calvintaneng Sslee Dear Calvintaneng,
Thank you for reminding me that my old hand-phone need an urgent update. I will take profit on some of your “chun-chun” call and buy myself a brand new Huawei’s Nova Lite 3 or Mate X.
By the way the handsome not so old man with formal dress (Jacket) is me and on my right is young and handsome Jonlohsoh.

Thank you
03/03/2019 10:37

Whoa SSLee,

You look like Uncle Koon in his younger days?

And Jonathan Choivo almost unrecognizable, must have added 10kg from last year.
No longer a boy. A grown up man now! And very smart, too.
03/03/2019 11:25 AM
Choivo Capital Calvin,

I lose weight from when I came back to johor actually.
12/03/2019 12:10 AM


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