Posted by resilient911 > 2018-02-23 22:44 | Report Abuse

Good to share..

Posted by arv18 > 2018-02-23 22:52 | Report Abuse

Thanks for sharing. As a fundamental, long term investor, what is your take on Marco?

Are you invested in the company? cheers.

Posted by 3iii > 2018-02-24 01:18 | Report Abuse

Good advice. I am eagerly waiting for your subsequent articles. Thanks for sharing.

Posted by Albukhary > 2018-02-24 01:50 | Report Abuse

Very good article and very good example using.

Posted by Albukhary > 2018-02-24 01:57 | Report Abuse

Amit, what is your view on trend investment, do you categorise it as investing or speculating?

For example, Amy aware that currently market consumer trend like Milk Tea, so Amy closed its lemonade business and start its Milk Tea. After 1 years, Amy see its profit margin for Milk Tea business has dropped, and Amy foresee the next market trend is healthy fruit juice, so Amy closed it milk tea business and switch all her capital to start the Healthy fruit juice business.

In the above example, Amy is investing or speculating?

Posted by Jibaihosehliao > 2018-02-24 15:04 | Report Abuse

thumbs up!

Posted by Amit Khindriya > 2018-02-24 17:54 | Report Abuse

@arv18 I am no invested in Marco and do not know about Marco. However, since you asked, I did a quick check.
Here is my take on Marco
Financials
- Small cap, company that has been around for close to 50 years
- Good financial fundamentals; sitting on cash pile of RM100M; debt free.
- I like that they consistently have been rewarding shareholder with dividends year after year
Business Analysis
-Past years,earnings are flat despite higher revenue
- Marco is in a tough Business position - In an age of Smart Phones, Smart cameras in phones, wearable, fitbit, i-watch, ipad and all sorts of other gizmos, Marco is trying to stay in market selling Casio watches, calculators and cameras in the consumer space.

Outlook
The business margins to be squeezed further a competition is very intense and there are so many players and new technologies.

Having said that, it all depends on what Marco's mgmt. plan to do.

Anyways, the above is just my take based on a 20min quick check, do not take my inputs literally. There is much that is unknown by me. Do your research.

Posted by Amit Khindriya > 2018-02-24 23:06 | Report Abuse

@Albukhary - I think it really depends how and why Amy moves from one business to another. If she finds Milk tea giving her better returns (profit or yields) than lemonade, it means going for a business that is more profitable, and soon after move to the next (Healthy Juice) when the profits for Milk Tea drops.

You see, the purpose of any business (investment) is to maximize the returns. For as long as Amy understands the business that she is going into well, the risk and the returns it is not speculation.
If she does her homework that the new business it is more profitable and does not just follow the "fad" blindly, it is an investment.
However, if Amy just jump on the Milk tea "bandwagon" because other are doing with the "hope" to sell higher without knowing that business well, then she is speculating.

"Never fall in love with a stock, it is always important to be objective and sell when it price exceeds the intrinsic value and there is a better opportunity."
I will write about this in the future - how to appraise your investments and how to determine intrinsic value.

Posted by Albukhary > 2018-02-25 00:16 | Report Abuse

Thanks Amit, really feel goods to have you share your investment methodology in this forum.

Posted by arv18 > 2018-02-25 02:34 | Report Abuse

THank you for taking your time Amit. Much appreciated.

We live in an age of smart phones & devices. However I've noticed that folks still need & want to own affordable, durable wristwatches.

I mean, all the smart-watches need to be charged everyday, and are insanely expensive. Not a practical or reliable proposition for the majority of folk.

My take is that the casio watch, especially G-shock business has a natural moat.

Additionally, they sell casio keyboards and electric pianos - higher margin , more expensive products. A great solution for kids who's parents aren't able to afford the real deal, but want something to practice on.

There will be furious competition online and from parallel imports. I do hope management decides what to do with that very large cash pile.

Cheers!

Posted by Amit Khindriya > 2018-02-25 09:10 | Report Abuse

@arv18 - thank you for bringing Marco to my attention. It will be in my radar for now.

Posted by Amit Khindriya > 2018-02-25 09:31 | Report Abuse

@Albukhary - mutually we share and learn from each other.

Posted by ajim102 > 2018-02-27 18:09 | Report Abuse

excellent write up