Friday, 31 August 2012

Excellent businesses that can consistently earn high ROE are often bargain buys even at seemingly very high P/E ratios.

The secret that Warren has figured out is that excellent businesses that benefit from a consumer monopoly, that can consistently earn high rates of return on shareholders’ equity, are often bargain buys even at what seem to be very high price-to-earnings ratios.

Top 5 Stocks George Soros and Warren Buffett Both Own

George Soros and Warren Buffett are two of the world’s most successful investors. While Buffett holds stocks for the long term, Soros is more likely to trade in and out of positions with greater frequency.

Both of their viewpoints overlap on eight stocks. The largest positions they hold in common are: Walmart (WMT), Kraft (KFT), DirecTV (DTV), DaVita (DVA) and Johnson & Johnson (JNJ).

Read more here:

Warren Buffett gives 'reverse birthday gift' to children's foundations

Warren Buffett is celebrating his 82nd birthday today by doubling what remains of his original pledge of stock shares to the three foundations run by his children, Susan, Howard and Peter.
That means he will donate about $100 million a year to each foundation, up from an average of $64 million annually. By the time his pledge is fulfilled, the three foundations will receive what, at today's share price, amounts to $2.08 billion.
Over the past six years, the foundations already have received $1.16 billion.

Warren Buffett
Howard Buffett
Susie Buffett

82 Reasons We Love Warren Buffett

Today is Warren Buffett's 82nd birthday. Each year, I celebrate the Babe Ruth of Investing's birthday by adding another reason we love our hero.
1. Intricate, occasionally contradictory complexity hides beneath the aw-shucks folksy charm. As a Forbes writer once put it, "Buffett is not a simple person, but he has simple tastes."
2. Many people talk about avoiding the madding crowd, but Buffett actually does it by living 1,250 miles away from Wall Street.
3. He has a fortress-like internal scorecard on all things investing, but a vulnerable, endearing external scorecard on many aspects of his personal life. See his penchant for seeking mother figures.
4. Perspective: "In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."
5. He is that guy in school who tells you he may have failed the test ... only to bust the top of the curve.
6. His time frame for the long run consistently exceeds his life span.
7. Him saying it better: "Someone's sitting in the shade today because someone planted a tree a long time ago."
8. He's human. He fears nuclear war and his own mortality. He's frequently more adept at business relationships than personal ones. He can hold a grudge. His hero is his daddy.
9. Classic line: "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1."
10. Once branded a stingy miser (rightly or wrongly), Buffett has evolved (assuming it wasn't his intention from the start) into one of the most effective philanthropists I know. After growing his potential givings at a 20% compounded rate per year, he set a plan to give most of it away.
11. Perhaps as importantly, he put ego aside and outsourced the charitable decision making to the Bill & Melinda Gates Foundation. Circle of competence at its finest.
12. "I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years." Contrast that with computer algorithm-based trading, day trading, and some of the moves you've made in your own account.
13. Buffett's smarter than you and I, but he's kind enough to let us feel otherwise.
14. David Sokol was once an heir apparent and arguably Buffett's most trusted operations guy. But when Sokolgate erupted, Buffett stayed true to his word: "We can afford to lose money -- even a lot of money. But we can't afford to lose reputation -- even a shred of reputation."
15. "Derivatives are financial weapons of mass destruction." He said it early, and we are reminded of it often.
16. In a glimpse of the nuance that some commentators call hypocrisy, Buffett uses derivatives himself. But he does so in a way that doesn't threaten the entire financial system and explains exactly why in his annual shareholder letters.
17. He doomed himself from ever holding public office: "A public-opinion poll is no substitute for thought."
18. I like juxtaposing these two quotes: (1) "It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction." (2) "Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the subway."
19. "You only have to do a very few things right in your life so long as you don't do too many things wrong."
20. He has the ability to resist the allure of the quick fix or quick buck when longer-term dynamics are at play.
21. Not sure if this quote was before or after the Internet: "Let blockheads read what blockheads wrote."
22. For those hoping to become famous and respected, he's a testament that the challenges and doubts keep coming regardless of the length of the track record. He's publicly prevailed so far.
23. An investing truism: "Price is what you pay. Value is what you get."
24. The business side of that investing truism: "Your premium brand had better be delivering something special, or it's not going to get the business."
25. He uses colorful language and analogies when drab jargon could do the trick.
26. Boring example: moat vs. competitive advantage.
27. Not-so-boring example: sex.
28. "Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it."
29. Classic line: "Only when the tide goes out do you discover who's been swimming naked."
30. He backs up his saying, "Our favorite holding period is forever," by keeping past-their-prime subsidiaries others would "spin off to unlock value."
31. His Robin (Charlie Munger) can kick your Batman's butt.
32. He makes loophole-free handshake deals.
33. "Risk comes from not knowing what you're doing."
34. Keep it simple, stupid, quote No. 1: "The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective."
35. Keep it simple, stupid, quote No. 2: "There seems to be some perverse human characteristic that likes to make easy things difficult."
36. The Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  annual meeting is an unrivaled spectacle in investing, truly living up to its billing as the Woodstock for Capitalists.
37. One of the most succinct summations of why America is great: "There are 309 million people out there that are trying to improve their lot in life. And we've got a system that allows them to do it."
38. Trash-bin-diving caution No. 1: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
39. Trash-bin-diving caution No. 2: "Time is the friend of the wonderful company, the enemy of the mediocre."
40. He's an eternal optimist in a sound-bite culture that often rewards pessimists.
41. His shareholder letters reveal an artisan-like craftsmanship only seen when the proprietor cares deeply about his creation.
42. The contrarian credo: "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
43. Genius fails: "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."
44. Like so many great thinkers, Buffett is able to ignore noise and whittle a decision down to its core variables. After he explains those variables, the decision sounds elementary.
45. Why banking can be dangerous: "When you combine ignorance and leverage, you get some pretty interesting results."
46. He allows me to see the word "Buffett" without thinking of Jimmy.
47. Buffett maintains a high thought-to-speech ratio.
48. Buffett's librarian fantasy: "If past history was all there was to the game, the richest people would be librarians."
49. He converts a deadly sin into a virtue: "You do things when the opportunities come along. I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing."
50. Averaging 20% returns for almost half a century results in beating the S&P 500 78:1!
51. Even as he has fewer and fewer meaningful investing options because of the size of Berkshire Hathaway, he continues to wow us.
52. On a chili-dog-and-onion-ring-flavored note, Berkshire Hathaway owns Dairy Queen, my favorite fast-food chain.
53. Many of Buffett's managers were wildly successful entrepreneurs before selling out to Berkshire. Convincing successful, often headstrong, boss-less superstars to voluntarily subjugate themselves and to keep those people motivated and happy is a feat.
54. On a related note, Buffett doesn't micromanage. Good thing, with an empire this large.
55. He gets doubted again and again and again and proves the doubters wrong most of the time. Yet, you never hear him say "I told you so."
56. Well, maybe sometimes he gloats. Harvard Business School rejected him, which led him to study under his mentors Benjamin Graham and David Dodd at Columbia. His "how do you like me now?" statement: "Harvard did me a big favor by turning me down," he said. "But I haven't made any contributions to them in thanks for that."
57. He has become America's de facto investing teacher. And he's done so willingly.
58. Perhaps my favorite Buffett line: "We like things that you don't have to carry out to three decimal places. If you have to carry them out to three decimal places, they're not good ideas."
59. Not that he can't be ruthless, but Buffett tends to look for win-win situations where possible. Contrast that with the Wall Street art of "ripping the face off" of clients.
60. He's often described as a "learning machine," extending his natural abilities and allowing him to make behemoth investing decisions over the span of just hours.
61. He added to Ben Graham's teachings with the help of that learning-machine ability and Munger's counsel.
62. Here's a good place to point out that available-to-all company annual reports are the primary fuel in his learning machine. He reads them voraciously to compare and contrast companies and build his business knowledge base. See the next point.
63. When asked what the most important key to his success was, Buffett answered, "focus." His biographer Alice Schroeder elaborates: He has "focus like you have never seen on anybody else." For good or ill, Buffett's entire life has been dedicated to investing. It's much harder than he lets on.
64. Plenty of business fish in the sea: "There are all kinds of businesses that I don't understand, but that doesn't cause me to stay up at night. It just means I go on to the next one, and that's what the individual investor should do."
65. How many people can pull off being a contrarian by buying shares of Coca-Cola?
66. Even with an investing world full of Buffett students and imitators, he manages to surprise.
67. He takes every legal, ethical advantage available in the current system, but lobbies for a better system. For example, he supports higher taxes for the rich, more severe estate taxes, and a level playing field. As he puts it, "I don't like anything where the bottom 20% keep getting a poorer and poorer deal."
68. He is grateful for the advantages he has had in life -- as many of us have, he won the "ovarian lottery."
69. When he talks, E.F. Hutton listens.
70. Like many geniuses, he is frequently the confounding exception to the rule. For example, Berkshire Hathaway has never paid a dividend and only started share repurchases recently. It also doesn't split the chairman and CEO roles. And we shareholders thank him for it.
71. Buffett buys what he knows (and frequently loves), but he doesn't overpay out of affection. He has the discipline to wait decades for the right opportunity.
72. He gives credit to his direct reports.
73. Not only is Buffett a great investor and manager, he's one hell of a writer. My jealousy grows.
74. He once picked up a date in a hearse he co-owned.
75. Before having his money work for him, he worked for his money early on with a series of jobs, schemes, and ventures. These included a paper route, selling chewing gum door-to-door, a pinball business, a sales job at J.C. Penney's, caddying, marking up refurbished golf balls, and founding a horse-racing tip sheet.
76. It's very possible the house you live in is worth more than the house Buffett lives in -- the house in Omaha he bought in 1958.
77. Over the years, he has relied on a similar set of answers to oft-asked questions. That his philosophy has stayed stable throughout that time is remarkable.
78. His wealth has bought him the ultimate trophy: He does whatever he wants to do just about every single day.
79. He's the outsized calming influence a lot of us need. From his biography Snowball: "If a tornado were barreling straight toward Kiewit Plaza [where his office is], Buffett would say that things were 'never better' before mentioning the twister."
80. Anyone who can make the hyper-opinionated Charlie Munger regularly utter "I have nothing to add" must be saying something impressive.
81. When his time to step down finally comes, it will take a village (a CEO, a chairman, and multiple portfolio investors) to perform his current responsibilities.
82. That said, he fully expects this list to one day reach well into the triple digits. And I look forward to adding those lines. Happy birthday, Mr. Buffett!

Thursday, 30 August 2012

KAF - Return on Retained Earnings

Year DPS EPS Retained EPS
2002 4.5 5.4 a 0.9
2003 5.4 7.9 2.5
2004 6.3 12.6 6.3
2005 5.4 13.7 8.3
2006 5.4 9.9 4.5
2007 30.1 15.8 -14.3
2008 5.6 12.5 6.9
2009 5.6 -2.5 -8.1
2010 5.6 17.3 11.7
2011 11.3 16.2 b 4.9
Total 85.2 c 108.8 d 23.6 e
From 2002 to 2011
EPS increase (sen) b-a 10.8
DPO c/d 78%
Return on retained earnings  (b-a)/e 46%
(Figures are in sens)

CIMB - Return on Retained Earnings

Year DPS EPS Retained EPS
2002 1.1 10.8 a 9.7
2003 1.9 14.9 13
2004 3.6 14 10.4
2005 7.2 15 7.8
2006 5.4 23.6 18.2
2007 14.6 30.9 16.3
2008 9.3 27.7 18.4
2009 9.9 38.3 28.4
2010 27.3 47 19.7
2011 20 50.9 b(P) 30.9
Total 100.3 c 273.1 d 172.8 e
From 2002 to 2011
EPS increase (sen) b-a 40.1
DPO c/d 37%
Return on retained earnings  (b-a)/e 23%
(Figures are in sens)

PIE - Return on Retained Earnings

Year DPS EPS Retained EPS
2002 10 12.4 a 2.4
2003 10 12.2 2.2
2004 12 18.1 6.1
2005 12 27.2 15.2
2006 14.6 41.4 26.8
2007 22 55.6 33.6
2008 28.7 53 24.3
2009 26.3 39.5 13.2
2010 26.3 40.1 13.8
2011 26.3 59.5 b(P) 33.2
Total 188.2 c 359 d 170.8 e
From 2002 to 2011
EPS increase (sen) b-a 47.1
DPO c/d 52%
Return on retained earnings  (b-a)/e 28%
(Figures are in sens)

Sime Darby - Return on Retained Earnings

Sime Darby
Year DPS EPS Retained EPS
2007 0 31.4 a 31.4
2008 38.2 56.6 18.4
2009 19.1 39.1 20
2010 10 14.4 4.4
2011 30 61.9 b 31.9
Total 97.3 c 203.4 d 106.1 e
From 2007 to 2011
EPS increase (sen) b-a 30.5
DPO c/d 48%
Return on retained earnings  (b-a)/e 29%
(Figures are in sens)

Ajinomoto - Return on Retained Earnings

Year DPS EPS Retained EPS
2002 5.3 17 a 11.7
2003 6.5 19.9 13.4
2004 7.9 21.6 13.7
2005 7.9 14.6 6.7
2006 7.9 9.9 2
2007 8.9 24.7 15.8
2008 12.9 34.4 21.5
2009 15 31.2 16.2
2010 15.8 36.6 20.8
2011 17.3 42.6 b 25.3
Total 105.4 c 252.5 d 147.1 e
From 2002 to 2011
EPS increase (sen) b-a 25.6
DPO c/d 42%
Return on retained earnings  (b-a)/e 17%
(Figures are in sens)

BAT - Return on Retained Earnings

Year DPS EPS Retained EPS
2002 201 232 a 31
2003 298 266 -32
2004 247 283 36
2005 216 208 -8
2006 275 252 -23
2007 329 256 -73
2008 263 284 21
2009 250 262 12
2010 239 256 17
2011 276 252 b (P) -24
Total 2594 c 2551 d -43e
From 2002 to 2011
EPS increase (sen) b-a 20.0
DPO c/d 102%
Return on retained earnings  (b-a)/e -47%
(Figures are in sens)

Fraser & Neave - Return on Retained Earnings

Fraser & Neave
Year DPS EPS Retained EPS
2002 12 24.6 a 12.6
2003 10 29.1 19.1
2004 18 32.7 14.7
2005 27.4 37 9.6
2006 31.7 40.1 8.4
2007 33.2 42.9 9.7
2008 39.8 46.8 7
2009 35.3 68.2 32.9
2010 45.5 86.3 40.8
2011 183 88.7 b -94.3
Total 435.9 c 496.4 d 60.5 e
From 2002 to 2011
EPS increase (sen) b-a 64.1
DPO c/d 88%
Return on retained earnings  (b-a)/e 106%
(Figures are in sens)

Coastal - Return on Retained Earnings

Year DPS EPS Retained EPS
2003 0 3 a 3
2004 0.9 3.1 2.2
2005 0.6 3.5 2.9
2006 0.7 7.5 6.8
2007 1.4 14.6 13.2
2008 2.6 20.3 17.7
2009 2.2 33.2 31
2010 3.7 41 37.3
2011 8.3 39.5 b(P) 31.2
Total 20.4 c 165.7 d 145.3e
From 2003 to 2011
EPS increase (sen) b-a 36.5
DPO c/d 12%
Return on retained earnings  (b-a)/e 25%
(Figures are in sens)

Nestle Quarterly Report History

Profit Before
Tax (RM,000)
Net Profit
Per Share (Cent)



Financial Year End 31/12/2012
Quarter 2
Quarterly report for the financial period ended 30/06/2012
The figures have not been audited


2Profit/(loss) before tax
3Profit/(loss) for the period
4Profit/(loss) attributable to ordinary equity holders of the parent
5Basic earnings/(loss) per share (Subunit)
6Proposed/Declared dividend per share (Subunit)

7Net assets per share attributable to ordinary equity holders of the parent ($$)