Intelligent Investor

Hi ckwan,

Then how you judge the company?

2014-08-16 15:49

Intelligent Investor

I think it is worth to look at the figure and understand the story it try to tell you.

Walter Schloss share with us that "We aren't too good, generally, in interpreting what managements say, assuming we get to top management rather than stockholder relations people. In thinking about how one should invest, it is important to look at you strengths and weaknesses. ...I'm not very good at judging people. So I found that it was much better to look at the figures rather than people."

2014-08-16 15:50

ccs999

Hi II, I can see you put a lot of afford on Apollo, you are using many way of FA to analysis Apollo, well done, do you hold any Apollo share? Thank you.
Regards,
Chua

2014-08-16 15:54

ccs999

afford=effort

2014-08-16 15:55

speakup

solid company!

2014-08-16 15:56

Intelligent Investor

I think the price now is not attractive yet.

2014-08-16 16:35

coolio

I'm intrested to hear from ckwan as well how he judge a company..may be he has a magic wand or crystall ball

2014-08-16 16:35

Intelligent Investor

Hi Ckwan,

Thanks for the reply. I understand your point.

I quote you few case:-
(i) I have a friend who involve in equity investment for 2 years. He make most of his investment decision by reading the post in i3investor. He did not perform much calculations or FA analysiis. And, as of now his return his much better than my portfolio.

(ii) I have another friend who like to invest in property market 5 - 6 years ago. He and his wife take a lot of bank loans and holding a few properties. Now, they have sold some properties to settle the bank loan, and holding some of it with no debt. I believe based on today market price, it worth at least few millions.

(iii) I follow Mr. KYY's blog few months ago and know his investment story. And suprise me that he is not really perform a deep FA on his stock pick. But with his own style of investment approach - check out the company growth, buy low sell high, leverage on margin, etc... He is able to build his wealth - and, I believe his net worth is more than billion now.

Based on (i), (ii), and (iii), I never doubt that there is people able to make his fortune using his own methods (but not detail Fundamental Analysis). And, I think there is nothing wrong if they able to make money by following their own method.

Anyone will compalin for making money?

2014-08-16 18:20

Intelligent Investor

I don't have such skills and I prefer to play safe.

I am holding Benjamin Graham principles - "An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."

I prefer to perform thorough analaysis, ensure the margin of safety and aiming for a CAGR of 15%.

2014-08-16 18:25

Intelligent Investor

And, please don't get me wrong. I am not advice anyone to sacrifice the time with family. In fact, my own priority is

(1) Family and Friends
(2) My Career
(3) My Hobbies - and now equity investment is my biggest hobby and I think I am enjoying it.

But due to the limited of time, I am using a lot of template to help me to do more thing with less time. If you interest on this, you can refer the financial statement analaysis excel template which I post in my blog - http://klse.i3investor.com/blogs/intelligent_investor_notes/57857.jsp

2014-08-16 18:27

JT Yeo

just my opinion, which is something i learn from Security Analysis. I think quantitative analysis isn't the hardest part, whether it is accurate or not is a different story and also depends on the model. The hardest part is the qualitative part of the business, and it is the qualitative part of the business that gives 'meaning' to the quantitative side and drive the calculations.

For example in the book Ben Graham shows US Steel's EPS (quantitative) fluctuating over the course of 10 years, you can't see any trend, those EPS YoY seems totally random, however he then showed the steel output (qualitative) of the company, each year's output is very consistent, that's where the strength of the qualitative side drive the business.

Another example is regarding bond coverage, comparing bond issued by a railroad company to a cosmetic company, the cosmetic company consistently have a higher multiple coverage (quantitative) on it's bond compare to the railroad company, which is better because that means more margin of safety, a sudden drop in earnings will not affect the bonds payment. However when they examine the nature of business, railroad's earning power is more solid than cosmetic, which is more reliant on trend or fad, and soon enough the cosmetic business falters and default their bonds payment.

2014-08-16 19:09

stockoperator

I read Ckwan reply and have to concur with that. Ckwan even gives us the example of GAB price ten years ago. The fair value at that time is Rm1.65 and price at that time is Rm1.80. He did not buy. Ten years later now is Rm13 plus.

My dear friends, I have to stress that it does not matter to me what is the price today or tomorrow. Whether it drops 20-30% next year or not.

It Only matters to us the price after ten years. Most importantly is how much shares that i hold at that point of time.

Remember this is wealth Creation process. Stock picks and Margin of Safety is Only part of the process ya. No doubt is the most important part But not more important than the process itself.

TQ

2014-08-23 21:04

happ12

market is random...don't too rigid on your investment..TQ

2014-08-23 21:19