yape, while we are on holy grail for good business with good earning prospect. Price will determine our rate of return.

Very Good Sunztzhe, i also think the question is not good. Probably KC needs to adjust the figure a bit. Come on KC, ask one more time.

Sunztzhe, i think KC pengsan already. So long No reply.

Sunztzhe, please ask more question ya as i also think the question is very unclear.

Sunztzhe, you make KC speechless. I cant stop laughing. You make my day.

Sunztzhe, I really cannot tahan you lah.

Company A is marginally cheaper by 10% and better Buy.

You Quote: We must rise above trivialities and look forward towards the greater benefits arising from a healthy exchange of investment ideas that will eventually lead to better return on invested capital for everyone.

Very Good one ya. Ha Ha Ha.

My Dear Sunztzhe, Young and Vibrant:

I dont think Forumers here have any bad intention. It is just the way they present their views.

Look at Raider, i see that he is trying so hard in English to explain things to you mah! Pity him lah. He can misunderstand me sometimes But i understand his meaning. If he has bad intention, he wont bother you loh!

Young and Vibrant Suntzthe

Let me put it this way.

In your pursuit for Business value and earning growth with strong balance sheet, we Better have the following understandings as our prerequisite:

1)Do you have any in depth research in any sector in Bursa?
2)Any ideas of strength of weakness of the companies in that sectors?
3) Knowing any industrial report, trend, development in that sector?
4) Leaders and laggards in the Sectors? Why it is leader? So it is a Economic Moat?
5)Product Cycle or market cycle in that Sector?


When we have all these in our fingertips, then we can say we just come across a great company with great value in 5 minutes.

When we have all these in our mind, then we can understand all figures and ratio in the Balance Sheet, Profit and loss and Cash Flow statement instantly. They all click and piece together.

Then we can judge the Mispricing in the market immediately.

The Ratio basically:

1) filter operating earning against invested capital,
2) then filter profit against Revenue,
3) then filter down to net income to attributed to shareholders.
4) And finally if retained income adds any market value to shareholders.

Cycle continues year after year.

Above Ratios pointing to Core Business operating efficiency.

Noted More heavy investment during down Business cycle for next phase of Growth.

Despite the technicality, purpose is more important i presumed.

if it includes working capital, it looks more like cash flow statements, right?

Thanks Cheong

Really?..then i am mistaken. The safest of all Net asset company ya? Will market give them Business Value + Cash + Investment Value?

Well, investment value is discounted Now.

My Dear Calvin, for example for Kluang, Sg Bagan and Kuchai, everybody also tempted But where can we go and verify all their lands and assets? I suspect they are Not plantable, if Not who does not want to replant with palm tree given that they are cash rich?? We cant say what is right or wrong as where is the facts right? You might know and ask around if my suspicions is correct since you are in Johor.

Suntzthe,

Raider has good presentation:

If your expectation is low and long term, Public is could be considered.

So if you have high expectation of return and in fact, cost of capital is much higher, then Public is expensive.

Suntzthe, Public is at fair value according to lots of standards and model of Valuation. I am just making a point of Buy and Holding on to your investment even at fair Value.

Dear Raider, you will be doing very well ya.

Dear Calvin,

Your son's Singapore conference is the proof that in the short term, market is a voting machine. That is all ya.

Learn to Respect the Market. Price going down for Good Reason. Price going up for Good Reasons as well. Never jump to Conclusion that You are Right and Market is Wrong all the time, ya.

I am not saying you are wrong. Judge the MISPRICING more Intelligently ya.

Dear Raider,

You have good definition.

What if i pay a fair value NOW instead of Margin of Safety according to your definition, and years later the company grows in size and revenue and profit. So can i say i am paying a very good discounted cheap price TODAY?

What does it matter if you pay Rm11, 12, 13, 14 or Rm15 for Public right? Now is RM20. One day it does not matter also if you pay RM20 for Public as it is already RM25, fair?

You can opt to Buy anything at fair price, But if there is Discount then you Buy more loh! IF there is No discount, you buy a bit loh, fair?

Surely you know the house value is different after your masterly renovation right?

My Dear Calvin, the Light is within your our self Image and Hide within our Ego. The Knowledge is Know Thy self. ya.

Lets do a Reverse analysis in value investing:

1) High dividend yield is a criteria But not the only criteria. IF we are in the market just for High DY we might as well put money in FD, fair?

2) Net asset of a company is a criteria BUT not the only criteria. An old Bungalow house does not necessarily fetch the same market value as New gated Bungalow developed by SP Setia just in front, fair?

A plantation land in Kelantan with low yield does not necessarily equates to Utd Plant land for sure, right?

As not a single Business is the same, same applies to same category of asset. They are NOT of THE SAME VALUE, fair?

3) Growth is part of value and criteria BUT not the only criteria. Any companies in Bursa also can post certain growth in certain years, fair? Is there any difficulty in achieving growth anyway? Not at all, just use some debt to Buy some mediocre performance asset, fair?

Well, A really good Business will continually generate good cash flow, its asset is Highly valued and sought after, and being able to grow strength from strength in years to come.

A) Look for past ten years. Has the company been able to achieve above criteria and the achievement is within your expected rate of return?

B)IF YES then we have to question its future prospect for the next 5-10 years at least and its Earning Power.

C)IF YES AND YES, then what price do we pay? More importantly, how much do we invest? Most importantly, how much more allocation we will put into it for the next 5-10 years? We are in market to build wealth not for one-off profit, REMEMBER?

FAIR?

KK123, do you remember Oriental prices jump when Tan Sri Loh Boon Siew passed away?

Well something likes that. Minor adjustment of portfolio once a year to balance your cash holding/investment holding, risk appetite, growth projection and things like that.

Dear Sunztzhe, look at my writing above. Same as yours. Learning from you fast.

Dear Digiuser:

Don't be too meticulous or academic about arriving the intrinsic value which you might think it is the grandest idea to do so as the assumption and conditions might deviate sometimes. It can be conservative or aggressive depends on the models and assumption and projection which ties to investment climate and risk on/off again. Certain conditions might not be ripe Now and investors is opting for longer horizon.

There might also be financial risk, market risk and earning visibility or other alternate opportunity or balancing of portfolio and risk appetite that the investors are weighing into it.

Surely when timing and condition is right again, investors will come back again and again and reinvest.

Ha Ha Dear Sunztzhe, look at your writing. I had read it three times to understand. no wonder...anyway You can help KC to compile a Book.

I like. Working Attitude and Mentality. Same as Investment. Not only for those Academic know how and analyst.

My Dear Sunztzhe: It just happens that you are my type that is all. I know it from beginning and you are not going to change Overnight.

But somebody does not know after so Long, writes such a Long comment some more until i tell him. Pity him writing so much. You should apologize for bad writing instead of him apologizing.

It is knowing your Business circle of competence.

Yape in times to come, tons of so-called Good Business will fail. Tons of company with deep asset value will also fail. If rule 20/80 is true in Business World, ONLY a small portion of it will prevail and create Great Wealth for Long term investors. BE conscious to know and Study and Read and Learn the language continuously.

Let me put it this way. Prices would consolidate 80% of the time. Collect ten years dividend. Be conservative in earning prospect. Price in ten years is your destiny.

Dear Raider, yes diversification a bit is the Way.

My concern is more towards BE conscious and to know if you are Right or Wrong. Knowing And acceptance of the facts and Moving on. Being confidence and courageous when you are Right.

Dear Raider, it is Not a criteria or qualification. IT IS mentality.

Dear Calvin, we will never shun Net Net asset investing as when we are investing in good business we are also looking at its asset for downside protection.

It is MORE IMPORTANT to know that when you are Wrong than when you are Right in your pursuit. LET me do a simple Reverse analysis here as You must know when you are Wrong:

1) If you are investing on Deep Net asset value, you must recognize time postponement, negative cash flow, sluggish Business, Power of Execution before realizing Future value of your deep value of Asset;

To mitigate the Risk, you might need Accurate insider Information and ONLY Invest based on HARD FACTS;

BE conscious enough to recognize and accept WHEN YOU ARE WRONG than when you are Right. Don't be speculative BUT only only invest based on FACTS and FIGURES. It is alright if we miss the first initial Insider Move;

2) If you are investing on Good Business Prospect, you must also KNOW WHEN YOU ARE WRONG even though you may dwelt on its earning power to be around for sometimes.

IS company being able to re-invest its retained earning? Is there better opportunity? IS company profit margin declining or improving? IS company doing outside non core and non operating investment to enrich themselves? Has company being able to grow its Business?

YOU MUST BE MORE CONSCIOUS AND COURAGEOUS TO KNOW WHEN YOU ARE WRONG THAN INSISTENCE YOU ARE ALWAYS RIGHT.

And Being confidence enough also to stick around knowing that you are Right.

Aiyo, KC, Sunztzhe is making comment to Calvin ideas of Net net asset investing lah. You know how to read business but not reading people mind ke?

Managing Risks???? Well...Margin of safety is not Only price...

1. Managing own funds like managing other people money; That is MOS.
2. Monitor the turnover of portfolio. Don't be a trader; This is MOS as well.
3. Make use of Dollar Cost averaging, you can only invest once in a year.
4. Make use of Piotroski score, ensure the reasonable price we pay is not due to fundamental changes; MOS also.
5. Will Only consider Buy if price consolidates at least few years while earning expands; That is Margin of Safety;
6. Easy to understand Business; A very common Business is alright; A more familiar Name is much Better; Good Business itself is a margin of safety;
7. Profit has never drop 3 years in a row; recession proof; Margin of safety right?
8. Dollar cost Averaging itself is a Margin of Safety;
9. Mentality of investment of at least 10 years as risks will be smoothed out and good business prevails. That is Margin of Safety.
10. Keep some cash. Keeping cash itself is investment. You may park in low risk mutual funds. That is margin of safety.
11. Dividend yields 3-5% will lower your cost of Holding each year; Make sure you receive dividend for 10 years; MOS also right?
12. Don't fancy High growth spectacular company; Surely this is MOS right?
13. Leader in the Sector Not by revenue or profit size But by profit margin or ROE, that is economy moat. Very lean and focused operation.
14. Mentally prepared for the worse and ALWAYS KNOW WHAT TO DO. CONSCIOUS.
15. If you are Not at peace and Happy at investing, there is something Wrong. Find out!
16. Healthy check on debt level, cash flow, receivables that is all working capital requirements;
17. Good Business Practice and Honest management;
18. Holding on with capital gains as your margin of safety;
19. Understanding your Business with confidence is MAKE OR BREAK. The most risky investment is Not knowing your Business;
20. Even though the list above is Long, well actually it is doing NOTHING as Margin of Safety will Only getting stronger as time pass....

Best article so far.

You cant invest without confidence and understanding.

1) Challenges remain for professional eye to appreciate One.
2) after researching high and low, eventually we create a portfolio. Again the challenge is portfolio and money management and risk management.

A highly conscious mind knows what happens.

Pintaras is quite a Classic example.

Buying Securities and managing the fund is a Highly regard profession.

Dear Investors: Sales might soar. Nonetheless, focus must be on mental preparation and how to invest in the company in the next ten years to build wealth.

End of day KC it is net asset investing versus Business Value and good Business Practice.

Market is Big enough for everybody here as long as we are Consciously investing.

I know my mistakes of imposing certain values here while ignoring others.

OR the market is assessing that the management has no intention to give out cash dividend and company has no capability to earn Great profits then the share price and SO the cash on hand is also discounted?

Well, no offend to those who holds the company for trading or investment.

So it means all property companies should sell all their assets on hand in order to become Net Net candidate so that their share price will be fully valued?

Dear Ksng I always feel very funny about this method as if you invest in property or any profit generating hard asset then you are Not qualified as Net Net candidate? Why?

Anyway, i really have to remind myself to respect others investment style.

Well, Johnny, it should be a trading Buy close up to IV.

Dear Powerwk: Thanks for being with me at this hour. We are here in the market to build wealth and purpose in life not for profit.

I comment earlier today that i have been buying One counter for last ten years that is called Dollar Cost Averaging which is the Only free lunch in stock investment. To be able to do that, surely Not every counter will qualify.

Just sharing. Surely i learn NOW to respect everybody investment style.

We understand people lost money by certain advice and I totally understand their feelings. Well whether it is right or wrong call, please understand those makes a Buy or Sell call has no intention to cheat your money.