Posted by Robert Love > 2014-12-05 20:21 | Report Abuse

From the example of this so-called good counter, one can see that all the earlier theories being painted about HOW GOOD the stock is were all useless...

Posted by bsngpg > 2014-12-06 08:08 | Report Abuse

Read from somewhere this is "systemic" risk that all counters either good or poor would drops when the broad market drops. Therefore someone also said not only buying good counter but most importantly buying it cheap.
However TienWah does not meet my criteria as a good counter in the first place. Nice to read your post again.

Posted by Robert Love > 2015-02-04 21:09 | Report Abuse

this is one piece of GONE counter....it never had an economic moat to begin with. If BAT does not renew the contract, Tien Wah can close shop...

Posted by Robert Love > 2015-02-04 21:18 | Report Abuse

The above article made a serious flaw. It assumed that Tien Wah can grow at a certain average rate of growth annually. It will never happen in reality!!!

e.g. 3%, 4%, -2%, -5%, 4%, 5%, 5% --- Growth Path (1)

e.g. 2%, 2%, 2%, 2%, 2%, 2%, 2% --- Growth Path (2)

The average of the above 2 series = 2% per annum.

If one were to apply the above 2 different paths of growth rates to derive valuation for Tien Wah, one would certainly end up with 2 totally different valuation!!!

Welcome to the world of "Flaw of Averages"...

http://flawofaverages.com/

Hope the writer can go and read up on the book "The Flaw of Averages" :)

Posted by kcchongnz > 2015-02-05 00:39 | Report Abuse

Robert oh Robert,

Still harping on Tien Wah? OMG, others have moved far ahead already!

Anyway, I find your posting below which appears in a couple of my threads, classic, absolute classic!經典

I didn't know people can forecast future growth like you did:

[3%, 4%, -2%, -5%, 4%, 5%, 5%]

Classic, absolutely classic! Can't help saving your post below.



Posted by Robert Love > Feb 4, 2015 09:18 PM | Report Abuse

The above article made a serious flaw. It assumed that Tien Wah can grow at a certain average rate of growth annually. It will never happen in reality!!!

e.g. 3%, 4%, -2%, -5%, 4%, 5%, 5% --- Growth Path (1)

e.g. 2%, 2%, 2%, 2%, 2%, 2%, 2% --- Growth Path (2)

The average of the above 2 series = 2% per annum.

If one were to apply the above 2 different paths of growth rates to derive valuation for Tien Wah, one would certainly end up with 2 totally different valuation!!!

Welcome to the world of "Flaw of Averages"...

http://flawofaverages.com/

Hope the writer can go and read up on the book "The Flaw of Averages" :)

Posted by bsngpg > 2015-02-05 07:33 | Report Abuse

I LIKE the ironic and humorous comment, amuses me in the early morning. Ha! Ha!. Thks.

Posted by Robert Love > 2015-02-05 11:18 | Report Abuse

it is not about forecasting growth. It is about using probabilistic management to manage uncertainty in valuation analysis...

Posted by kcchongnz > 2015-02-05 11:30 | Report Abuse

Posted by Robert Love > Feb 5, 2015 11:18 AM | Report Abuse

it is not about forecasting growth. It is about using probabilistic management to manage uncertainty in valuation analysis...


Robert, perhaps you could share with us your "using probabilistic management to manage uncertainty in valuation analysis." in any of the stock you are familiar with.

I am dying to see your prowess in the above.

Btw, please explain what you mean first. I am with a head full of dew water now.

Posted by Robert Love > 2015-02-05 14:05 | Report Abuse

Bad news continued to stack up against Tien Wah and New Toyo...

http://www.ft.com/cms/s/0/00d59d84-59ff-...z3QuVw39BJ

Posted by Robert Love > 2015-02-05 14:08 | Report Abuse

Instead of assuming a certain deterministic value of growth rate for Tien Wah, one should actually use a distribution of growth rate, and examine the impact of this distribution of growth rate on the final valuation, i.e. via Monte Carlo simulation...

It is all written in the book by Sam Savage..

http://web.stanford.edu/~savage/flaw/

Posted by Robert Love > 2015-02-05 14:10 | Report Abuse

In essence, F (E(x)) is not the same as E(f(x))....

:)

Posted by Robert Love > 2015-02-05 14:11 | Report Abuse

Praise for The Flaw of Averages

1. "Statistical uncertainties are pervasive in decisions we make every day in business, government, and our personal lives. Sam Savage's lively and engaging book gives any interested reader the insight and the tools to deal effectively with those uncertainties. I highly recommend The Flaw of Averages ." - William J. Perry , Former U.S. Secretary of Defense

2. "Enterprise analysis under uncertainty has long been an academic ideal...In this profound and entertaining book, Professor Savage shows how to make all this practical, practicable, and comprehensible." - Harry Markowitz , Nobel Laureate in Economics

Posted by kcchongnz > 2015-02-06 00:24 | Report Abuse

Posted by Robert Love > Feb 5, 2015 02:10 PM | Report Abuse
In essence, F (E(x)) is not the same as E(f(x))....

Wow, F (E(x)) is not = E(f(x))!

What the f is that?

And Robert oh Robert, when are you going to carry out your Monte Carlo simulation on the distribution of the growth rate to estimate the intrinsic value of Tien Wah?

What the f, I though using Monte Carlo simulation on share price of a stock is already mind boggling to all of us here, not to say apa itu Morte Carlo simulation on the distribution of future growth rate!!!!

OMG!!!


Posted by Robert Love > Feb 5, 2015 02:08 PM | Report Abuse

Instead of assuming a certain deterministic value of growth rate for Tien Wah, one should actually use a distribution of growth rate, and examine the impact of this distribution of growth rate on the final valuation, i.e. via Monte Carlo simulation...

It is all written in the book by Sam Savage..

http://web.stanford.edu/~savage/flaw/

Posted by MrTigerShark > 2015-02-06 00:50 | Report Abuse

WAKAKA!ROBERT MY FRIEND!APA ITI KCCHONGNZ IS TAI CHI MASTER!YOU POINT OUT HIS MISTAKE HE TAI CHI ONLY!!!

HE IS CALVINTANENG BEST FRIEND AND PRAISED HIM AS HONEST TRUSTWORTHY MAN!OMG!APA ITU!!! WAKAKAKA!!

ROBERT MY FRIEND,APA ITU SPENT MORE THAN 10 HOURS READ EVERY SINGLE COMMENT!!!LOL!!!HOW CAN YOU WIN!!!

HOW APA ITU TAI CHI MASTER GOING TO TAI CHI!!

1.FORGET ALL HIS BAD SELECTION.
2.COMPARE WITH INDEX.INDEX MADE UP FROM 30 LARGEST MARKET CAP CO.
3.HARPING ON VALUE INVESTING WHEN PERFORM BADLY VS OTHERS.
4.CRITICISE YOU ON CONTRIBUTE NOTHING AND DARE YOU TO FIND MISTAKE ON HIS PART.LOL!!!THEN APA ITU PRETEND TO FORGET AGAIN!!!
5.FAVOURITE PART IS FLAG YOU NON STOP!!!10 HOURS OK!!!

WAKAKAKA!!!!THAT IS APA ITU TAI CHI MASTER!!!!

Posted by calvintaneng > 2015-02-06 01:09 |

Post removed.Why?

Posted by NOBY > 2015-02-06 08:49 | Report Abuse

Hahha... Monte Carlo simulations on the distribution of growth rate... OMG you are going to get a super wide range of intrinsic values ... basically garbage in garbage out anyway, whats the point of complicating things... valuation is an art not precise science... But yea... please show us this new method of calculating the intrinsic value using MC simulation... I am also very eager to learn....

Posted by ks55 > 2015-02-06 09:09 | Report Abuse

Tien Wah is in sunset industry, just like Star (Star slightly better 'cos it is trying to evolve through internet involvement). But again every share has its market value. To buy Star or Tien Wah with even money, I will choose Star. At present price, I will not consider both. To me, Tien Wah will be a good buy at 1.50, Star will be 1.80.

Posted by alphagst > 2015-02-17 22:28 | Report Abuse

Intrinsic value RM6.27, why now only RM1.98? I have to work past 60 years old if I have this stock in my portfolio.

Posted by Robert Love > 2015-06-19 08:01 | Report Abuse

1.75 RM