Good morming,

LORD's Day is here again

YES EVERYDAY IS THE LORD'S DAY. TODAY WE ARE IN APRIL 14, THE YEAR OF OUR LORD 2019/

BEFORE AD WAS BC (BC STANDS FOR BEFORE CHRIST) OUR WORLD'S DATING IS BASED ON JESUS' APPEARANCE BEFORE (BC) AND AFTER (AD)

See

And GOD tells us to set One Day out of every seven to go to Church & listen to His Word. This day is called the LORD's DAY.

Now let's listen to the Words of Jesus Christ

 28 For which one of you, when he wants to build a tower, does not first sit down and calculate the cost to see if he has enough to complete it?29 Otherwise, when he has laid a foundation and is not able to finish, all who observe it begin to ridicule him, 30 saying, ‘This man began to build and was not able to finish.’ 

31 Or what king, when he sets out to meet another king in battle, will not first sit down and consider whether he is strong enough with ten thousand men to encounter the one coming against him with twenty thousand? 32 Or else, while the other is still far away, he sends o]a delegation and asks for terms of peace.

Jesus used the above 2 illustrations to tell Christians about counting the cost of discipleship. He concluded the a true Christian must forsake himself & give 100% loyalty to God Almighty. Only then can a Christian be true to his calling

Let's see what Jesus gave as example 

1) Calculate the Cost 

 For which one of you, when he wants to build a tower, does not first sit down and calculate the cost to see if he has enough to complete it?

A "tower" is built in a vineyard to watch over the grapes or crops  planted?. 

A person who wishes to build a watch tower must first sit down and calculate

(before taking action and start building or investing) he must sit down then do his maths

What kind of maths?

calculate the cost to see if he has enough to complete it?

Ha! Simple as that!!

Enough money to finish the project? Enough reserves even if there is unknown factors?

Always have a margin of safety in mind

to see if he has enough to complete it?

In Singapore there is a very highly successful company called "HYFLUX" dealing with water desalination plant. It was so successful that Middle Eastern Countries gave jobs to Hyflux in year 2013. So Hyflux expanded there. But in year 2014 due to shale oil competition Crude oil prices crashed by 60% & Hyflux suffered.

Again Hyflux took up the Tuaspring Project of water desalination plus selling excess electrity to Singapore power grid. Buy again due to the collapse of oil and gas electricy sales became very cheap & Hyflux suffered losses again

To finance Tuaspring Hyflux borrowed from both banks & also gave out bonds to 34,000 investors with perpetual guaranteed interest payment of 6% for forever.

What people thought was safest now turned into a nightmare as Tuaspring caused Hyflux to be insolvent.

If only Hyflux stayed content & took up jobs that are manageable.

SO THIS TEACHES US ABOUT "COUNTING THE COST OF INVESTMENT" OR MARGIN OF SAFETY

CAN A COMPANY SURVIVE IF CRUDE OIL PRICES COLLAPSED?

THOSE THAT OVER BORROWED LIKE PERISAI, EZRA, SWIBOR, DAYA, ALAM, SUMATECH, BARAKAH, PERDANA & OTHERS WILL GO INTO TROUBLE WHEN OIL IS DOWN & PETRONAS SCALED BACK JOB AWARDS FROM YEAR 2015, 2016, 2017 & EARLY 2018

THOSE PRUDENT ONES WITH LESS DEBT & CLEAN BALANCE SHEET WILL SURVIVE

A COMPANY CAN SURVIVE AS LONG AS ITS CASH OR ASSETS DO NOT RUN OUT!

ONCE CASH CANNOT MEET EXPENSE THE COMPANY GOES INTO INSOLVENCY

BUT THOSE COMPANIES WITH HIGH NET ASSETS OF VALUE LIKE LANDS & PROPERTIES CAN SELL OR DISPOSE THESE FOR LIQUIDITY TO MEET DEBT OBLIGATIONS

THAT IS WHY BEN GRAHAM ALWAYS ADVOCATE BUYING STOCKS WITH AT LEAST 2/3 PRICE OF ASSET BACKING OR NTA

SAY NTA IS RM1.00.... A MARGIN OF SAFETY WOULD MEAN PAYING NO MORE THAN 70 SEN FOR IT

THE EXTRA 30% DISCOUNT IS A CALCULATED PROTECTION FROM UNKNOWN RISK

PEOPLE WHO BOUGHT INTO PAN-EL,  ENRON, TRANSMILE, PERWAJA STEEL, EKRAN, PATIMAS, SAAG, MEGAN MEDIA AND OTHER FAILED ECTERPRISES HAVE LOST EVERYTHING BECAUSE THEY GONE BANKRUPT.

BANKRUPT?

OVER 1,000 BANKS FAILED IN THE US DURING THE GREAT DEPRESSION BECAUSE THEY GAVE LOANS TO STOCK MARGIN PLAYERS & FARMLANDS THAT WENT BUST

THOSE INNOCENT PEOPLE WHO PLACED ALL THEIR MONIES IN BANKS ALSO LOST EVERYTHING WITHOUT THEIR FAULT

ANY BANK WHO DOES NOT PRACTICE "THE MARGIN OF SAFETY" CAN ALSO GO BANKRUPT

BANKRUPT = BANK RUPTURED!!  OR BROKEN

IN 1997/8 BEFORE THE ASIAN FINANCIAL CRISIS THERE WERE 49 BANKS & CREDIT INSTITUTIONS IN MALAYSIA

AFTER THAT ONLY 9 BANKS SURVIVED & MERGED

2) THE SECOND ILLUSTRATION IS SIMILAR TO THE FIRST

Or what king, when he sets out to meet another king in battle, will not first sit down and consider whether he is strong enough with ten thousand men to encounter the one coming against him with twenty thousand? 32 Or else, while the other is still far away, he sends o]a delegation and asks for terms of peace.

A COUNTRY LIKE SADAM GOING TO INVADE KUWAIT IS TOTALLY FOOLISH & FOOLHARDY

THE AMERICANS IN "DESERT STORM" UNLEASHED THE MOST DEVASTATING WEAPOINS ON IRAQ WHICH IS NO MATCH AT ALL

IF ONLY SADAM SAT DOWN AND THINK HE & HIS SONS WOULD NOT HAVE PERISHED

A LIFE FOR A LIFE IN THE GAME OF WAR

SO DON'T GO FIGHTING IF IN THE END YOUR ENEMY GOING TO PUT YOU IN SHAME

NOW YOU KNOW WHY CALVIN TAN RESEARCH AT THE VERY CORE ALWAYS PRATICE MARGIN OF SAFETY IN INVESTING

"SIT DOWN & CALCULATE"  ---- FIND THE "MARGIN OF SAFETY"

"RETURN OF CAPITAL FIRST!!  THEN ONLY THINK OF RETURN ON CAPITAL"

IN OTHER WORDS

"NEVER TO LOSE MONEY"

BEST REGARDS

Calvin Tan Research

Singapore