Posted by stockmanmy > 2017-04-15 14:07 | Report Abuse

"What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower."

read this sentence properly.
it contrasts high and risky vs low and cheap.

the cheap here can be replaced by the word least risky.



rephrase the sentence, it becomes..........what seems low and least risky generally goes lower.".........my kind of guy.

Posted by chamlo > 2017-04-15 14:10 | Report Abuse

Jaks was condemned when RM 1 earlier this yr so bad? Now RM 1.65 good to chase?

Posted by stockmanmy > 2017-04-15 14:15 | Report Abuse

whoever condemned Jaks at $ 1 has no clue.

Posted by stockmanmy > 2017-04-15 14:19 | Report Abuse

the word chase is relative isn't it?
relative to other shares, it is hardly unusual for last 3 months.

so, what is Jaks unique selling proposition and what are you getting?




chamlo > Apr 15, 2017 02:10 PM | Report Abuse

Jaks was condemned when RM 1 earlier this yr so bad? Now RM 1.65 good to chase?

Posted by Ricky Yeo > 2017-04-15 14:49 | Report Abuse

Personally as a value investor I don't think my toolbox is limited. These are what im looking forward to master. Value or growth, they are just a name. It is what you do that defines you not the name you call yourself by.

Basic Algebra
Extrapolation
Power laws
Normal distribution
Fat-tailed distributions
Correlation vs causation
Reversion to the mean
Outliers
Bayes rule
Precautionary Principle
Paradigm shift
Skin in the game
Optionality
The expert problem
Logical positivism
Ease of Recall
Retrievability
Confirmation bias
Bias from anchoring
Conjunctive and disjunctive-events bias
Bias from over-confidence
Hindsight Bias
Utility
Diminishing Utility
Supply and Demand
Scarcity
Elasticity
Economies of Scale
Opportunity Cost
Marginal Cost
Comparative Advantage
Trade-offs
Price Discrimination
Positive and Negative Externalities
Sunk Costs
Moral Hazard
Game Theory
Prisoners' Dilemma
Tragedy of the Commons
Groupthink
Economies of scale
Diseconomies of scale
Misinterpretation of p-values
Misunderstanding of randomness
Curse of knowledge
Ludic fallacy
Lucifer effect
Porter’s five forces analysis

Posted by stockmanmy > 2017-04-15 20:26 | Report Abuse

this blog is not for you then

this blog is for those who teaches you how to get returns without risks.
Got margin of safety of 30% and magic formulas to sell you.

or hang pig head sell dog meat

Posted by stockmanmy > 2017-04-15 20:37 | Report Abuse

The named is not the Tao

The nameless is the origin of Heaven and Earth

Stock market success do not need titles, credentials, accountants, MBA or CFA

But it does require some Forest Gump luck, dedication, hard work, love and freedom from stress.

Success in one part of life spreads to other parts of life.

When done, it appears so easy, so natural.

Posted by stockraider > 2017-04-15 23:12 | Report Abuse

1. Why did Berkshire under Buffett do so well?

Only four large factors occur to me:

(1) The constructive peculiarities of Buffett,
(2) The constructive peculiarities of the Berkshire system,
(3) Good luck, and
(4) The weirdly intense, contagious devotion of some shareholders and other admirers, including some in the press.

I believe all four factors were present and helpful. But the heavy freight was carried by

the constructive peculiarities,
the weird devotion, and
their interactions.

In particular, Buffett’s decision to limit his activities to a few kinds and to maximize his attention to them, and to keep doing so for 50 years, was a lollapalooza. Buffett succeeded for the same reason Roger Federer became good at tennis.

Buffett was, in effect, using the winning method of the famous basketball coach, John Wooden, who won most regularly after he had learned to assign virtually all playing time to his seven best players. That way, opponents always faced his best players, instead of his second best. And, with the extra playing time, the best players improved more than was normal.

And Buffett much out-Woodened Wooden, because in his case the exercise of skill was concentrated in one person, not seven, and his skill improved and improved as he got older and older during 50 years, instead of deteriorating like the skill of a basketball player does.

Moreover, by concentrating so much power and authority in the often-long-serving CEOs of important subsidiaries, Buffett was also creating strong Wooden-type effects there. And such effects enhanced the skills of the CEOs and the achievements of the subsidiaries.

Then, as the Berkshire system bestowed much-desired autonomy on many subsidiaries and their CEOs, and Berkshire became successful and well known, these outcomes attracted both more and better subsidiaries into Berkshire, and better CEOs as well.

And the better subsidiaries and CEOs then required less attention from headquarters, creating what is often called a “virtuous circle.”

2. What were the big mistakes made by Berkshire under Buffett?

Well, while mistakes of commission were common, almost all huge errors were in not making a purchase, including not purchasing Walmart stock when that was sure to work out enormously well. The errors of omission were of much importance. Berkshire’s net worth would now be at least $50 billion higher if it had seized several opportunities it was not quite smart enough to recognize as virtually sure things.

Posted by stockraider > 2017-04-15 23:13 | Report Abuse

3. The next to last task on my list was: Predict whether abnormally good results would continue at Berkshire if Buffett were soon to depart.

The answer is yes.

Berkshire has in place in its subsidiaries much business momentum grounded in much durable competitive advantage.

Moreover, its railroad and utility subsidiaries now provide much desirable opportunity to invest large sums in new fixed assets. And many subsidiaries are now engaged in making wise “bolt-on” acquisitions.

Provided that most of the Berkshire system remains in place, the combined momentum and opportunity now present is so great that Berkshire would almost surely remain a better-than-normal company for a very long time even if:

(1) Buffett left tomorrow,
(2) his successors were persons of only moderate ability, and
(3) Berkshire never again purchased a large business.

But, under this Buffett-soon-leaves assumption, his successors would not be “of only moderate ability.” For instance, Ajit Jain and Greg Abel are proven performers who would probably be under-described as “world-class.”

“World-leading” would be the description I would choose. In some important ways, each is a better business executive than Buffett.

And I believe neither Jain nor Abel would
(1) leave Berkshire, no matter what someone else offered or
(2) desire much change in the Berkshire system.

Nor do I think that desirable purchases of new businesses would end with Buffett’s departure. With Berkshire now so large and the age of activism upon us, I think some desirable acquisition opportunities will come and that Berkshire’s $60 billion in cash will constructively decrease.

4. My final task was to consider whether Berkshire’s great results over the last 50 years have implications that may prove useful elsewhere.

The answer is plainly yes.

In its early Buffett years, Berkshire had a big task ahead: turning a tiny stash into a large and useful company. And it solved that problem by avoiding bureaucracy and relying much on one thoughtful leader for a long, long time as he kept improving and brought in more people like himself.

Compare this to a typical big-corporation system with much bureaucracy at headquarters and a long succession of CEOs who come in at about age 59, pause little thereafter for quiet thought, and are soon forced out by a fixed retirement age.

I believe that versions of the Berkshire system should be tried more often elsewhere and that the worst attributes of bureaucracy should much more often be treated like the cancers they so much resemble. A good example of bureaucracy fixing was created by George Marshall when he helped win World War II by getting from Congress the right to ignore seniority in choosing generals.

Posted by stockmanmy > 2017-04-16 01:04 | Report Abuse

When Munger talks about valuations, his is controlling stakes.

He already has plans for his investee companies.

Posted by stockraider > 2017-04-16 11:01 | Report Abuse

KEY PRINCIPLES TO INVESTING IN A STOCK
In this article we look at the four keys that we believe every stock investment should have. These are not new things but rather the core principles that successful investors have been following for decades.

1. Invest in sectors and industries that you understand –

Becoming an expert in certain areas of the market will give you an upper hand when it comes to selecting stocks to buy. This is like a foundation for all other steps that follows. Pick a given sector or industry and try to get information on it as much as possible. This will enable you to make informed decision when it comes to buying stock.

2. Find companies with a Long-Term Competitive Advantages –

Companies with long-term competitive advantage have an ”economic moat” i.e. Economic protection. These companies have the following advantages:

A recognized brand.
The ability to produce products cheaper than anyone else.
The ability to sell their products cheaper than anyone else.
Barriers to entry that make it difficult for competitors or new companies to compete.
The opportunity to grow at a cheaper cost than anyone else.
A duopoly situation where two companies dominate the industry like Airbus or Boeing.
Networking effect where the users of the product or service makes the business more valuable like Google.


3. Look for companies with Excellent Management –

This can be done by reading annual and quarterly reports and studying the history of the company’s current management in an attempt to understand what the management is currently doing and what they may do in the future. You can look at the following:


The management’s history of decision-making. Do they have a track record of someone who we would actually hire if given a choice?
Understanding how management is compensated. Is their compensation based upon the success of the firm?
Ensuring that management is shareholder friendly. Do they do things that have the best interest of shareholders in mind?
These questions will help you to answer the question as to whether or not we trust the management enough to purchase the stock.



4. Buy When the stock is at a Good Price. Discounted to Intrinsic Value —

Find stocks that are currently trading below the market price. If you can be able to find stocks that are trading below their intrinsic value and have the other three core principles then we would have the formula for a sound stock investment. If you find a stock with the first 3 principles but is not trading below the market price, then it is better you wait. Any investor should know that the price at which he/she pays at, is a critical piece of investing. If you get it wrong then the investment will have a hard time making money.



Bottom Line

When all the four principles align then the possibilities of making money increase, though this does not guarantee that you will make money but rather increases the probability of making money.

Posted by stockraider > 2017-04-16 11:04 | Report Abuse

Here’s how we will always stand on the three essentials.

1. First, our earnings stream is huge and comes from a vast array of businesses.

Our shareholders now own many large companies that have durable competitive advantages, and we will acquire more of those in the future.
Our diversification assures Berkshire’s continued profitability, even if a catastrophe causes insurance losses that far exceed any previously experienced.


2. Next up is cash.

At a healthy business, cash is sometimes thought of as something to be minimized – as an unproductive asset that acts as a drag on such markers as return on equity.
Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.
American business provided a case study of that in 2008. In September of that year, many long-prosperous companies suddenly wondered whether their checks would bounce in the days ahead. Overnight, their financial oxygen disappeared.
At Berkshire, our “breathing” went uninterrupted. Indeed, in a three-week period spanning late September and early October, we supplied $15.6 billion of fresh money to American businesses.
We could do that because we always maintain at least $20 billion – and usually far more – in cash equivalents. And by that we mean U.S. Treasury bills, not other substitutes for cash that are claimed to deliver liquidity and actually do so, except when it is truly needed.
When bills come due, only cash is legal tender. Don’t leave home without it.



3. Finally – getting to our third point – we will never engage in operating or investment practices that can result in sudden demands for large sums.

That means we will not expose Berkshire to short-term debt maturities of size nor enter into derivative contracts or other business arrangements that could require large collateral calls.
Some years ago, we became a party to certain derivative contracts that we believed were significantly mispriced and that had only minor collateral requirements. These have proved to be quite profitable.
Recently, however, newly-written derivative contracts have required full collateralization. And that ended our interest in derivatives, regardless of what profit potential they might offer.
We have not, for some years, written these contracts, except for a few needed for operational purposes at our utility businesses.
Moreover, we will not write insurance contracts that give policyholders the right to cash out at their option. Many life insurance products contain redemption features that make them susceptible to a “run” in times of extreme panic.
Contracts of that sort, however, do not exist in the property-casualty world that we inhabit. If our premium volume should shrink, our float would decline – but only at a very slow pace.
The reason for our conservatism, which may impress some people as extreme, is that it is entirely predictable that people will occasionally panic, but not at all predictable when this will happen.
Though practically all days are relatively uneventful, tomorrow is always uncertain. (I felt no special apprehension on December 6, 1941 or September 10, 2001.)
And if you can’t predict what tomorrow will bring, you must be prepared for whatever it does.

Posted by stockraider > 2017-04-16 11:07 | Report Abuse

Accounting Ratios - these are among the most important
There are many useful ratios that can be taken from accounts.

The following are among the most important but there are many others.

Profit turnover
Return on Capital Employed
Stock turn
Number of Days' Credit Granted
Number of Days' Credit Taken
Dividend per Share
Price/earnings ratio

When going through a set of accounts, it is a good idea to pick out relevant figures, work out the ratios and try to draw conclusions.

For all the ratios, if you have access to frequently produced management accounts, the ratios will be more useful.

Questions to ask yourself regarding Accounting Ratios:


What was the ratio of Profit to Turnover?
What was the Return on Capital Employed?
What was the Stock Turn?
What was the number of days' credit granted? (Ignore possible GST or VAT implications)
What is the working capital? Does this give cause for concern?

Posted by stockmanmy > 2017-04-17 09:43 | Report Abuse

I guess if you want to look for a good business to acquire, you would want to look at some accounting ratios to see how it is managed , problems and solutions.

But, by no means the only factor...in many cases, not even the deal breaker because most companies are actually moderately and averagely managed.

Great deals were made from the big picture...and the details left to the accountants and advisers.

Posted by stockmanmy > 2017-04-20 23:54 | Report Abuse

Flower seller talks about the fragrance of flowers. Stock picker talks bad about Index funds,
Index funds are confident they are doing the right thing basing on the theories they learn in universities.
Final outcome, the customers decide.

and if you worry like a Tan Teng Boo, you are not going to get any return.

Like I say many times, this year......stay invested at all times, sell only if you find some thing better. No other good reason to sell.

Last three months, people are seeking risk. Selling bonds to get into riskier assets. Non Index shares out perform Index shares by a mile.

Will things change?

Don't know. But , it is smart to assume things don't change until it changes. Objects in motion continue in motion until it meets another force.




Stay invested, stay in riskier assets....




"What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower."


Jaks, anyone?

Vitrox?

Posted by stockmanmy > 2017-04-20 23:57 | Report Abuse

What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower."

What seems too high and risky to the majority generally goes higher...please note,...this refers to good companies that seems too high...not lousy companies in any way.

Posted by stockmanmy > 2017-04-21 00:48 | Report Abuse

Buffett taking megamillion-dollar beating on IBM

value investors lost their touch in the new age.

Posted by stockmanmy > 2017-04-21 18:53 | Report Abuse

a rising tide lifts all boats....

of course one can wait to be lifted like a nice lady or one can do the lifting, be first in line in the rising tide.


"What seems too high and risky to the majority generally goes higher...and that applies to Gdex, Dnex, Vitrox, and the like.

This applies to good shares, , that is objective

what is high and what is intrinsic valuation? That is subjective

in this environment,

buy good shares that seems too high and risky to the majority...first in line.

People are looking for risk assets.

Posted by stockraider > 2017-04-22 12:10 | Report Abuse

Koon Yew Yin 21st April 2017
Dear Editor,

I refer to your email regarding pengembaraalam's comment on my stock pick for 2016 organised by Tan KW. As I said before that if participants for the competition cannot buy and sell to change their shareholdings, the competition is not real. It is only a guessing game and I must admit that I am not good at guessing. In actual practice, investors buy and sell frequently. In fact, day traders buy and sell several times in a day. IT IS NOT GUESSING IF U R A LONG TERM INVESTOR MAH....JUST HOLD 1 YR CANNOT MEH ?? HOW IT AFFECT UR STOCK SELECTION LEH ??

I am a serious long term investor and I buy shares basing on the profit growth prospects of the companies. I do not blindly base on charts to buy shares. I also do not worry too much on the company accounts because it only shows its past performance and it does tell you how the company will perform in the coming year. That is why those so called expert financial analysts cannot be successful. If you don’t believe what I just said, you can ask them to show their track records.
I buy shares basing on the company’s business. What kind of business? Is it a good business? For example, I will not buy company’s shares in Plantation, Oil & Gas, GLC and Properties. If you look at the oversupply of properties in every town and city in Malaysia, only stupid investors will buy these shares although some of them are still showing good profit due property sale of previous years. But they will not show increasing profit in the coming years.

As a co founder of Mudajaya, Gamuda and IJM Corporation Bhd. I have more than 50 years of doing business experience. Like all clever and successful business men, I carefully examine the future profit growth of the companies before I buy the shares even though they are showing losses last year.

For examples, in the last few months I have been slowly accumulation JAKS and Eversendai. I am now the controlling shareholder of JAKS and I hold about 50 million Eversendai. I dare to buy them even though they show losses last year. The 2 price charts show how well they are performing. YOUR SELECTION OF JAKS AND SENDAI IS RUBBISH...IT IS JUST PUMP & DUMP LOH...!!

You may like to know my track record. I have been substantial shareholders of Latitude Tree and VS Industry. Latitude went up more than 800% and VS went up about 600%. I sold some of my holdings to buy JAKS and Eversendai. A VERY BAD STRATEGY...U SELL A GOOD STOCK TO CHANGE WITH A LOUSY STOCK BCOS U TALK CAN PAKAT WITH THE OWNER TO GORENG MAH...!! GOOD STOCK OWNER DON LISTEN TO U LOH...!!

I am the 2nd largest shareholder of Lii Hen which went up more than 800% in the last 3 years. I am still a substantial shareholder.
The definition of the word substantial shareholder is that the shareholder must own more than 5% of the total issued shares of the company. THATS WHY RAIDER SAY UR STRATEGY RUBBISH LOH...WHY SELL A GEM FOR TRASH LEH ??

I strongly believe JAKS and Eversendai will perform like Latitude, VS or Lii Hen in the near future. I am obliged to tell you not to buy these shares which I am already a substantial shareholder. But if you do, you are doing it at your own risk. DON FOLLOW THIS STOCKS SELECTION ARE RUBBISH LOH....!!

Posted by stockmanmy > 2017-04-22 21:15 | Report Abuse

raider

you want to talk bad about a very successful investor, this is not the place to do it.

next and equally important....you don't qualify.

Posted by stockmanmy > 2017-04-23 00:45 | Report Abuse

look at this raider

talk is easy
criticise even easier

but he cannot make a proper decision, a proper judgement even if his life depended on it...and no record to speak of.

KYY can make a $ 200 million decision just like that.