Posted by 3iii > 2019-01-09 07:36 |

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Posted by 3iii > 2019-01-09 07:49 | Report Abuse

The Superinvestors of Graham-and-Doddsville
“Superinvestor” Warren E. Buffett, who got an A+ from Ben Graham at Columbia in 1951, never stopped making the grade. He made his fortune using the principles of Graham and Dodd's Security Analysis. Here, in celebration of the 50th anniversary of that classic text, he tracks the records of investors who stick to the “value approach” and have gotten rich going by the book.
COLUMBIA BUSINESS Warren Buffett May 17, 1984

https://www8.gsb.columbia.edu/articles/columbia-business/superinvestors

Posted by 3iii > 2019-01-09 08:16 | Report Abuse

http://myinvestingnotes.blogspot.com/2008/11/ben-graham-checklist-for-finding.
Ben Graham Checklist for Finding Undervalued Stocks
In addition to identifying and quantifying important value components, Graham left us with an assortment of general stock selection rules. He created a number of checklists at different times in his career to serve different investment objectives and portfolio strategies. The checklists review different aspects of a company's financial strength, intrinsic value, and the realtionship with price.



John Neff’s strategy and method mirrors that of Benjamin Graham.

It can be easily summarised by this checklist shared by Benjamin Graham.



https://docs.google.com/spreadsheets/u/1/d/1YuIjScYwulf8oOGyAXBdOXh3EymkaSnfr9nESsEmzWY/htmlview?hl=en
Ben Graham’s Check-list for finding good undervalued stocks.

Posted by 3iii > 2019-01-09 08:20 |

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Posted by qqq3 > 2019-01-09 12:19 | Report Abuse

B Graham?

when did he live? what era?


his era...the one eye jack is king....

cannot pakai already

Posted by 3iii > 2019-01-09 15:40 |

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Posted by qqq3 > 2019-01-09 18:58 | Report Abuse

Posted by 3iii > Jan 9, 2019 07:36 AM | Report Abuse

John Neff

Low P/E investing
========

really meh? Low PE do have one advantage....if the company subsequently shows explosive growth accompanied by PE ratings upwards, than the gain will be multiple baggers.

But the downside is.....more often the market is right...future disappointments coming

does not offer protection against bear markets....I think a lot of people think just because it is low PE, it offers protection against bear markets. These people will have to learn the hard way.

does it give superior return in bull market? not necessary unless accompanied by growth and / or manipulations which tend to be temporary.


I think it is probably more useful to educate people about the perils of low PE investing than to promote it. Just too darn cliche, just too obvious.

Posted by Icon8888 > 2019-01-09 20:41 | Report Abuse

You need to read the book, many things inside

Not your ordinary value trap Low PE

Posted by qqq3 > 2019-01-09 21:00 | Report Abuse

and the name of the book?

Posted by Icon8888 > 2019-01-09 21:01 | Report Abuse

https://www.amazon.com/John-Neff-Investing/dp/0471417920/ref=sr_1_2?ie=UTF8&qid=1547038870&sr=8-2&keywords=john+neff+on+investing

Posted by Icon8888 > 2019-01-09 21:07 | Report Abuse

Yes ! That is the kind of things he did ! Read the book

_________

really meh? Low PE do have one advantage....if the company subsequently shows explosive growth accompanied by PE ratings upwards, than the gain will be multiple baggers.

Posted by Icon8888 > 2019-01-09 21:07 | Report Abuse

Not really “explosive growth”, but a turnaround with decent growth is usually sufficient

Posted by Icon8888 > 2019-01-09 21:09 | Report Abuse

I have identified two stocks recently that fits the above description : DKSH and canone

You don’t need to agree with me, but I got inspiration from John Neff book

Posted by VenFx > 2019-01-09 21:11 | Report Abuse

This is clear direction pointing?

Big like !

Posted by Icon8888 > 2019-01-09 21:12 | Report Abuse

Contrarian , pick lower PER, has a plausible turnaround story ahead, plus a bit of patience like what 3iii preaches, maybe can work well as a way to minimise reinvestment risk , allowing us to churn portfolio on two to three years cycle

Posted by qqq3 > 2019-01-09 21:19 | Report Abuse

ok ....all sounds logical.

Posted by Icon8888 > 2019-01-09 21:19 | Report Abuse

I am not saying that I have found the magic formula

I am just trying to propose my own investment strategy

3iii has proposed his buy and hold forever strategy

Long Number proposed his concentrated , in-depth understanding, Long term hold strategy

Both also I don’t really like

So I am trying to figure out whether this John Neff strategy can work

So that I can do it systematically in the futur

Posted by Icon8888 > 2019-01-09 21:24 | Report Abuse

I hate Ben graham

I don’t like my life being guided by formulas and numbers

Posted by 3iii > 2019-01-10 10:20 |

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Posted by qqq3 > 2019-01-10 12:48 | Report Abuse

lurker

do u need all those Graham formulas to function? If u do, u have lost your humanity. And if do not,, nothing wrong with hate....Without love and hate, nothing changes in this world. Love and hate are essential parts of living and progress.


all these name throwing like Graham like Bufalo....good for politics, not good for critical thinking.

Posted by 3iii > 2019-01-10 14:37 |

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Posted by 3iii > 2019-01-10 14:56 |

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Posted by qqq3 > 2019-01-10 15:45 | Report Abuse

Posted by 3iii > Jan 10, 2019 02:37 PM | Report Abuse

We must recognize, however, that intrinsic value is an elusive concept.
===========

AI trading even more formulas than old Ben...did it work?

Posted by qqq3 > 2019-01-10 15:56 | Report Abuse

3iii

u can live for 10 years and not a single good company fits those formulas...and then all of a sudden , half the listed companies fit the formulas....then how?

Posted by 3iii > 2019-01-10 16:32 |

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Posted by 3iii > 2019-01-10 17:26 |

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Posted by qqq3 > 2019-01-10 17:29 | Report Abuse

u look at old Ben....that is not what he says.....

Posted by 3iii > 2019-01-10 17:41 | Report Abuse

For many years, Company Z grew its revenues, earnings and dividends. It distributed almost all its earnings as dividends. It was selling at a price that was giving a DY of 3.4%. Risk free interest rate was 3 to 3.5%.

Would you prefer to park your money in a fixed deposit giving you 3.5% interest or would you prefer to put it into Company Z realising an immediate DY return of 3.5% and with a potential to give increasing dividends in the future years?

Can you recognise the undervalued asset? Do you need higher level mathematics to do so?

Posted by Icon8888 > 2019-01-10 17:46 | Report Abuse

John neff not numbers driven

he looks at flesh and blood of a company


Posted by 3iii > Jan 10, 2019 10:20 AM | Report Abuse

>>>
Icon8888 I hate Ben graham

I don’t like my life being guided by formulas and numbers
09/01/2019 21:24<<<<



Incongruent.

You like John Neff whose investing strategy is very much like that of Ben Graham.

Posted by Icon8888 > 2019-01-10 17:47 | Report Abuse

in less flowery term, meaning he looks at the business

Posted by Icon8888 > 2019-01-10 17:54 | Report Abuse

3iii is like a buddhist monk, he chants Gurus Teachings everyday so as to keep himself from deviating from the correct path and the noble truth

Posted by Fabien Extraordinaire > 2019-01-10 18:02 | Report Abuse

recently, my investment thought process is greatly influenced by Mohnish Prabai

Posted by Icon8888 > 2019-01-10 18:07 | Report Abuse

Really ? Let me check

Posted by Icon8888 > 2019-01-10 18:08 | Report Abuse

Mohnish Pabrai
The Dhandho Investor: The Low-Risk Value Method to High Returns

Posted by Icon8888 > 2019-01-10 18:09 | Report Abuse

Bought already

Kindle

Posted by qqq3 > 2019-01-10 18:09 | Report Abuse

Icon8888 > Jan 10, 2019 05:46 PM | Report Abuse

John neff not numbers driven

he looks at flesh and blood of a company
===========

for lack of a better word I call it business sense....like QL shareholders.

Posted by qqq3 > 2019-01-10 18:11 | Report Abuse

for lack of a better word I call it business sense....like QL shareholders.....my cup of tea then.....

Posted by qqq3 > 2019-01-10 18:21 | Report Abuse

to tell a good story ....

whether as traders or as investors, to tell a good story is of primary importance.

look at oil market, can drop from $ 80 to $ 50 in Dec...that is some thing that is very rare, and now from Christmas day to now can rally to $ 60.....bringing along Hibiscus Carimin and other OG counters.....all because of a good story.

how logical are markets? should we be as illogical as markets? I also don't know....but we know markets are driven by stories.

Iran sanction, Venezuela zero production due to mismanagement, oil can still from from 80 to 50.......which side of the brain should one use in confronting the market?

Posted by qqq3 > 2019-01-10 18:29 | Report Abuse

People can interpret what ever they want, Trump has fully played his hands in China. He cannot push and bully anymore without repercussions. China has won. Americans will decide T has won. Either way , there is nothing T can do anymore and no new tariff ...that is the consensus opinion now....and so market rallies.....

u see...markets got no morality, don't even have fundamentals....after all, what has changed?............but markets have their own perverted logic......

Posted by 3iii > 2019-01-10 18:36 | Report Abuse

Company P has delivered great returns to its shareholders for years. It’s revenue, earnings and divendends grew over these years. For many years, its market price traded at a level which gave its FCF yields of above 6%. Given risk free interest rate was 3.5% for that period, was Company P not an undervalued asset?

No need for high power mathematics to recognise this undervalued stock.

Posted by Icon8888 > 2019-01-10 18:39 | Report Abuse

Tell us the names lah. Then we have better feel

Posted by 3iii > 2019-01-10 18:41 | Report Abuse

O & G stocks are divided into upstream and downstream segments. I spent some time working for one of the ugly sisters in the oil and gas industry. By nature, this O& G market is cyclical, much affected by the volatility of the oil price; its supply and demands. All its supporting industries are affected by this cyclicality.

You need to be very knowledgeable in this instructions to make money. As a general rule, avoid cyclical stocks, unless you have the uncanny ability of the industry.

Posted by qqq3 > 2019-01-10 18:41 | Report Abuse

Posted by 3iii > Jan 10, 2019 06:36 PM | Report Abuse

Company P has delivered great returns to its shareholders for years. It’s revenue, earnings and divendends grew over these years. For many years, its market price traded at a level which gave its FCF yields of above 6%. Given risk free interest rate was 3.5% for that period, was Company P not an undervalued asset?

No need for high power mathematics to recognise this undervalued stock.
================================

U don't believe the efficient market hypothesis? Mostly I do.....As for blue chips, it is mostly efficient and there are reasons for its movements and at level they find equilibrium. Of course, penny stocks is subject to kinds of manipulations....and unpredictability.

Posted by VenFx > 2019-01-10 18:41 | Report Abuse

Panamy lo !

Posted by 3iii > 2019-01-10 19:20 | Report Abuse

Company S

FY..Revenue..Earnings..EPS..Div

2006 379.78m 17.56m 7.3sen 4.0sen
2007 464.11m 14.21m 5.9sen 3.3sen
2008 694.34m 7.48m 2.82sen 1sen
2009 642.650m 14.187m 5.91sen 2.75 sen
9M 2010 836.296m 23.80m 23.80sen 4.63sen


Fair comment.

Company S did make almost 10 million from the rise in commodity price. However, its revenues have increased tremendously over the last 1 year. Its production capacity is totally used up and it is expanding its production capacity. Its profit margin was a miserable 5% or so in the past, but has increase recently, though the latest quarter showed a slight fall. Its debts are high but last year was an exceptional year, it generated huge cash flows and FCF, enabling it to reduce some of this high debts.

The company is investing to expand its business. Its capital expenditure has been and will be high for this year. My understanding from my reading is that they are producing for more of its product based companies that are outsourcing their production for one reason or another.

For the short and medium term, given its lowish PE and its good dividend yield (check out the dividends given), I have in fact identified this stock some time back in November 2010 to be included into my portfolio. This stock is truly neglected and out of the radar screen of big players, and thus was trading at a low PE.

The Unusual Market Activity reply by the company was quite unlike the usual reply by other companies when their share prices suddenly shot up. I thought the replies were fairly reasonable and also truthful, or close to the truth. :P

Please do your own study and make your own decision. Do not ever trust anyone's writing, (I INCLUDED :P) without doing your own personal assessment of the stock and financial datas. :)





Was this stock undervalued in November 2010? Neglected, not followed by big players, increasing earnings, increasing dividends, good dividend yield and low PE. Do you need to do a lot of mathematical analysis?

Soon after the herd pushed its share price skywards, its good business settled down from its recent high. When was a good time to get out of this stock? Do you need a lot of mathematics? Can one predict its business activities given the volatility of its business for many years?

Posted by 3iii > 2019-01-10 19:28 | Report Abuse

>>>>
qqq3 Posted by 3iii > Jan 10, 2019 06:36 PM | Report Abuse

Company P has delivered great returns to its shareholders for years. It’s revenue, earnings and divendends grew over these years. For many years, its market price traded at a level which gave its FCF yields of above 6%. Given risk free interest rate was 3.5% for that period, was Company P not an undervalued asset?

No need for high power mathematics to recognise this undervalued stock.
================================

U don't believe the efficient market hypothesis? Mostly I do.....As for blue chips, it is mostly efficient and there are reasons for its movements and at level they find equilibrium. Of course, penny stocks is subject to kinds of manipulations....and unpredictability.>>>>



The truth is the market is very efficient most of the time. There are times in the market (and also in individual stocks), when it is inefficient. Be watch ful for these prices.

Posted by 3iii > 2019-01-10 20:19 | Report Abuse

My selection criteria:

Growth in revenues and earnings > 15% per year.
ROE > 15%
High PBT Margin
Little Debt
PE at low side of PE range
Dividends must be at least 30% of Earnings. (DPO>30%) and increasing over the years.
Reward/risk > 3:1
Potential Returns > 15% per year.
CFO - CAPEX = FCF must be positive, growing and FCF/Market cap > 5%

Posted by 3iii > 2019-01-10 20:21 | Report Abuse

How 1 Man Made 100 Times His Money After Age 50
By: Rex Moore


I never thought getting old was fun (I'm over 50).

"Over the hill!"

"Past your prime!"

Those were phrases I used to think about all the time. But that all changed on May 2nd of this year.

Suddenly, the fog had been lifted. Within a few hours, my outlook had completely changed.

You see, I had just been in the same room as another "senior citizen" who had made 100 times his money after he blew out the candles on his 50th birthday cake. :thumbsup:

You may have heard of him. His name is Warren Buffett -- the billionaire investor. That's right, Buffett had less than 1% of his current fortune at the time he turned 50!

Posted by qqq3 > 2019-01-10 20:28 | Report Abuse

3iii > Jan 10, 2019 08:19 PM | Report Abuse

My selection criteria:

Growth in revenues and earnings > 15% per year.
ROE > 15%
High PBT Margin
Little Debt
PE at low side of PE range
Dividends must be at least 30% of Earnings. (DPO>30%) and increasing over the years.
Reward/risk > 3:1
Potential Returns > 15% per year.
CFO - CAPEX = FCF must be positive, growing and FCF/Market cap > 5%
==============


and after the share doubles....all the price related ratios will go out of whack already.......

Posted by 3iii > 2019-01-10 21:06 | Report Abuse

<<<qqq3 3iii > Jan 10, 2019 08:19 PM | Report Abuse

My selection criteria:

Growth in revenues and earnings > 15% per year.
ROE > 15%
High PBT Margin
Little Debt
PE at low side of PE range
Dividends must be at least 30% of Earnings. (DPO>30%) and increasing over the years.
Reward/risk > 3:1
Potential Returns > 15% per year.
CFO - CAPEX = FCF must be positive, growing and FCF/Market cap > 5%
==============


and after the share doubles....all the price related ratios will go out of whack already.......>>>




Only PE, Reward/risk and Potential Returns are affected by Price Changes.

The other parameters are based on the business fundamentals.




You hope to be rewarded in 2 ways: EPS growth and PE remaining the same, most of the time.

Some of the time, you get a double whammy. EpS growth and PE expansion.

(The reverse of the above statements lead to losses.)