Bullbear Buffett Stock Investing Notes

Keep INVESTING Simple and Safe (KISS) ****Investment Philosophy, Strategy and various Valuation Methods**** The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.

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Thursday, May 6, 2010

A quick look at Yee Lee (5.5.2010)

A quick look at Yee Lee (5.5.2010)
http://spreadsheets.google.com/pub?key=t110lp_dYviKliqIsIUOsLw&output=html
Posted by Investbullbear Investbullbear at 1:11 PM
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Robert Kiyosaki: Rich Dad Poor Dad (Financial Education)

Robert Kiyosaki - Rich Dad Poor Dad

"7 Habits of Highly Effective People"


Undervalued Good Quality Stocks

  • Corporate Information
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  • How can the average investor improves his investment returns in stocks?
  • Keeping Records of Your Shares (Download XLS Template)
  • Discovered any GEMS? Share here.

What is Risk?

The major RISK facing you is the possibility of not reaching your long-term investment goal through the growth of your funds in real terms. And the greatest enemy of reaching those goals is INFLATION. Nothing is safe from inflation. Short-term price volatility is NOT risk for investors who have time horizons 5, 10, 15 or 30 years away. Volatility is the friend of the long term investor. The most important friends of your investment goal are COMPOUNDING and TIME.

Life Cycle of A Successful Company

Life Cycle of A Successful Company

Tips from Warren Buffett

Tips from Warren Buffett

Visual Glossary of Corporate Finance

Visual Glossary of Corporate Finance

Value Investing

Value Investing
Intrinsic Value versus Market Price

Nine Steps to Value Investing

Nine Steps to Value Investing

Desired Characteristics for Potential Investment

Desired Characteristics for Potential Investment

The Famous Mr. Market Parable

The Famous Mr. Market Parable

Pros and Cons of Value Investing

Pros and Cons of Value Investing

Cash Flow Statement

Cash Flow Statement

Financial Ratios for Management, Owners and Lenders

Financial Ratios for Management, Owners and Lenders

My Philosophy and Strategy

My Investment Philosophy, Strategy and various Valuation Methods

My strategies for buying and selling (KISS version)

Investment Policies (Based on Benjamin Graham)


Knowing Yourself

  • Your Time Horizon, Risk Tolerance and Investment Objectives
  • What money means to you?
  • Everyone should become rich
  • Stock Market for the Young Investors

KLCI

KLCI

Keep INVESTING Simple and Safe (KISS)

  • Investment Policies (Based on Benjamin Graham)
  • My Investment Philosophy, Strategy and various Valuation Methods
  • Investment Philosophy of Magellan Infrastructure Fund
  • My strategies for buying and selling (KISS version)
  • The most important determinants of your success in investing - QVM
  • Eight lessons of investing
  • The Thought Process Is What Counts
  • Growing at 15% a year - what does this entail?
  • Taking Profit and Reducing Serious Loss
  • The Anxiety of Selling
  • The Ultimate Hold-versus-Sell Test
  • What to Do in a Up (Bull) Market?
  • What to Do in a Down (Bear) Market?
  • The 2008 bear market - Congratulations, you succeeded!
  • Lessons from the severe 2008 bear market
  • A challenge to active investors - Is it time for a re-think?
  • The Investor Psychology Cycle - The Sentiment Curve
  • The consequences must dominate the probabilities.
  • What you need to make to recover your losses
  • The Power of Compounding
  • Long term Buy and Hold works for Selected Stocks
  • Buy and hold until fundamentals change is safe for selected stocks.
  • Why Buy and Hold Will Always Be a Sound Investing Strategy
  • The Thoughts driving the Behaviour
  • Strategies for Overcoming Psychological Biases
  • Ride The Ten Baggers.
  • Financial Ratios for Managements, Owners and Lenders
  • News you could use - "SALE! 50% OFF!"

Other Strategies

  • Investment, speculation and gambling
  • Knowing the Stock Market and its Major Players
  • Keep your money for investing separate from those for speculating.
  • Be careful when playing momentum

since 21-12-2009

Counter 15.10.2010

About Me

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Financial News

  • Berita Harian (Economy News)
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  • Bloomberg Businessweek
  • Bursa Malaysia
  • Channel News Asia
  • China Daily
  • Economy Watch: Economy, Investment & Finance Reports
  • Finance Twitter (Stocktube)
  • Fortune
  • Globe Investor (Investment Ideas)
  • HwangDBS Investment Site
  • icapital.biz
  • Malaysia Insider Business Section
  • Malaysian Business Times
  • New York Times (Business)
  • Nextview
  • NST Business Time (Market Watch)
  • Performance tables for UK shares
  • RTT News - Global Financial Newswire
  • Shareinvestor.com
  • sharesinv.com
  • Sin Chew Business Section
  • Singapore Straits Times (Money)
  • Sydney Morning Herald (Business)
  • The Daily Telegraph UK (Finance)
  • The Edge Malaysia (Business & Market)
  • The Star Business Page
  • The Times of India (Business)
  • The Times UK (Business)
  • Utusan Malaysia (Business)
  • Wall Street Journal
  • World Market Index

Investment Tools

  • PE, PEG and EPS Growth rates
  • PEG Ratio: Why It’s More Relevant than P/E for Stocks
  • Earnings Multiples
  • Market Multiple
  • 'Cheapness' of stock is relative to its Intrinsic Value
  • FBMKLCI Chart 1990 - 2010
  • Reviewing the rise in KLCI from March 09
  • Corporate Information
  • ****Buffett: Growth and Value are joined at the hip
  • Peter Lynch's 6 categories of stocks
  • Two important things in the capital structure of the business
  • The 3 Gs of Warren Buffett
  • Which type of Company would you rather own?
  • Finding great companies: What you want to see on their financial statements?
  • 'A bird in the hand is worth two in the bush.'
  • The lower the capital used to achieve a certain level of growth, the higher the intrinsic value.
  • The true value is determined by the intrinsic value of the company and not the dividends.
  • How to Make Money The Buffett Way
  • THRIVING IN EVERY MARKET
  • How can the average investor improves his investment returns in stocks?
  • Comparative Industry and Company Financial Ratios
  • Understanding Leverage
  • Debt and Leverage: Financial weapon of mass destruction
  • Investor's Checklist: Banks
  • Audio-Video: Benjamin Graham The Intelligent Investor 1 of 24
  • Bursa Malaysia Stock Information (Calculator)
  • CAGR Calculator

My Check Lists for:

  • Finding Undervalued Stocks
  • Making Profitable Investments
  • To Sell or to Hold
  • Considering a sale
  • 20 Questions to Focus the Hold versus Sell Decision
  • Evaluating Changing Fundamentals of a Company
  • At a glance (Template)
  • Your Time Horizon, Risk Tolerance and Investment Objectives

The best stock investment strategy

Keep it simple. Keep it safe (make money with less risk taking). You don't need to pick the best stock or even the best stock funds to do well, if you have an investment strategy that keeps you out of trouble.

Local Investing Blogs

  • BLA, BLA, BLA
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  • Chap Ayam 'The Stockaholic'
  • CWYEOH KLCI Stock Analysis
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  • Ginsing70 Blogspot
  • Good Stock Bad Stock
  • i3investor.com
  • INVEST IN STOCK MARKET
  • Investment in KLSE
  • Investment Link
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  • KLSE Bursa Malaysia Blog One-Stop
  • Leno the Investor
  • Malaysia Finance Blogspot (LL)
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  • Value Investing In KLSE
  • Where is Ze Moola

Benjamin Graham's 113 Wise Words

"The true investor scarcely ever is forced to sell his shares, and at all times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgement."

Philip Fisher's Wise Words

"The refusal to sell at a loss, while completely natural and normal, is probably one of the most dangerous in which we can indulge ourselves in the entire investment process.

More money has probably been lost by investors holding a stock they really did not want until they could 'at least come out even' than from any other single reason. If to these actual losses are added the profits that might have been made through the proper reinvestment of these funds if such reinvestment had been made when the mistake was first realized, the cost of self-indulgence becomes truly tremendous."

(Common Stocks and Uncommon Profits)

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Term Life Insurance is Value for Money

All equity security investments present a risk of loss of capital

Investment performance is not guaranteed and future returns may differ from past returns. As investment conditions change over time, past returns should not be used to predict future returns. The results of your investing will be affected by a number of factors, including the performance of the investment markets in which you invest.

The Ultimate Hold-versus-Sell Test

Here is the overriding primary test, followed by observations on why it is so critically important:

Knowing all that you now know and expect about the company and its stock (not what you originally believed or hoped at time of purchase), and assuming that you had available capital, and assuming that it would not cause a portfolio imbalance to do so, would you buy this stock today, at today's price?

No equivocation. Yes or no?

Answers such as maybe or probably are not acceptable since they are ways of dodging the issue. No investor probably buys a stock; they either place an order or do not.

Here is the implication of your answer to that critical test: if you did not answer with a clear affirmative, you should sell; only if you said a strong yes, are you justified to hold.

Sell the losers, let the winners run.

Losers refer NOT to those stocks with the depressed prices but to those whose revenues and earnings aren't capable of growing adequately. Weed out these losers and reinvest the cash into other stocks with better revenues and earnings potential for higher returns.

Some thoughts on Analysing Stocks (KISS)

Ideally a stock you plan to purchase should have all of the following charateristics:

• A rising trend of earnings dividends and book value per share.
• A balance sheet with less debt than other companies in its particular industry.
• A P/E ratio no higher than average.
• A dividend yield that suits your particular needs.
• A below-average dividend pay-out ratio.
• A history of earnings and dividends not pockmarked by erratic ups and downs.
• Companies whose ROE is 15 or better.
• A ratio of price to cash flow (P/CF) that is not too high when compared to other stocks in the same industry.

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Benjamin Graham

"To achieve satisfactory investment results is easier than most people realise; to achieve superior results is harder than it looks."

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Margin of Safety Concept: Stocks should be bought like groceries, not like perfume

The high CAGR in the early years of the investing period, due to buying at a discount, tended to decline and approach that of the intrinsic EPS GR of the companies over a longer investment time-frame.

Chapter 20 - “Margin of Safety” as the Central Concept of Investment

A single quote by Graham on page 516 struck me:

Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.

Basically, Graham is saying that most stock investors lose money because they invest in companies that seem good at a particular point in time, but are lacking the fundamentals of a long-lasting stable company.

This seems obvious on the surface, but it’s actually a great argument for thinking more carefully about your individual stock investments. If most of your losses come from buying companies that seem healthy but really aren’t, isn’t that a profound argument for carefully studying any company you might invest in?

Market Fluctuations of Investor's Portfolio

Note carefully what Graham is saying here.

It is not just possible, but probable, that most of the stocks you own will gain at least 50% from their lowest price and lose at least 33% ("equivalent one-third") from their highest price -regardless of which stocks you own or whether the market as a whole goes up or down.

If you can't live with that - or you think your portfolio is somehow magically exempt from it - then you are not yet entitled to call yourself an investor.

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Keep It Simple and Safe (KISS)

Successful investing is not magic, just keep things simple and maybe follow few investing and money rules of thumb and you’ll be fine in the long run.
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