myinvestingnotes.blogspot.my (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.

Saturday, 20 December 2008

OPEC calls on UK to cut fuel duty or risk a long-term spike in oil

OPEC calls on UK to cut fuel duty or risk a long-term spike in oil
Oil cartel OPEC has called on Western governments, including Britain, to cut duty on petrol or risk fuelling a much higher oil price in the future.

By Rowena Mason Last Updated: 2:42PM GMT 19 Dec 2008

Saudi Arabia's Crown Prince Sultan at an OPEC summit in Riyadh, November 2007. Photo: REUTERS
Saudi Arabia's oil minister Ali al-Naimi and Abdalla S El-Badri, secretary-general of OPEC, said low demand was "wreaking havoc" for oil producers.
The producers claimed the collapse of prices to a four-year low of $36 a barrel is harming investment in the sector, creating supply problems for years to come. "A number of upstream projects have already been cancelled or delayed," Mr al-Naimi said at a meeting of energy ministers in London.
A cut in fuel duty, according to OPEC, would encourge cash-strapped consumers to buy more petrol, bolster demand for oil and encourage producers to develop new supplies.
Ministers from 27 countries and delegates from oil organisations convened at the London Energy Meeting, hosted by energy and climate change secretary Ed Miliband.
Prime Minister Gordon Brown gave an opening speech at the conference urging OPEC and other producers to continue to invest despite the crumbling in oil prices. Mr Brown also called for greater transparency in oil trading. Western governments have so far resisted the suggestion that speculation plays a large part in shaping oil prices, but the Prime Minister today proposed tougher regulation of the market.
He said "visionary internationalism" was needed to stamp out volatility, which he described as "one of the most pressing problems" for the world today. "Wild fluctuations in market prices harm nations all round the world," Mr Brown said. "They damage consumers and producers alike."
Oil producing members of OPEC blamed some of the severe volatility which has seen oil slump from a record $147 in July to below $40 on speculative futures trading.
The cartel operated by OPEC cut supply by a record 2.2m barrels a day this week, but failed to drive the price of oil back up to its target $75 a barrel. Mr al-Naimi for the first time pledged Saudi Arabia's support for investment in green alternative energy sources, if the "fair and reasonable" target price of $75 a barrel is reached.
The London summit follows a meeting in Jeddah, Saudi Arabia, earlier this year to tackle the huge increase in oil prices to $147 per barrel.
"If anyone had predicted then that oil prices would fall below $40 a barrel at the Jeddah meeting, they would have been transported to a mental institution," said Dr Noe van Hulst, secretary-general of the International Energy Federation.

http://www.telegraph.co.uk/finance/financetopics/oilprices/3850142/OPEC-calls-on-UK-to-cut-fuel-duty-or-risk-a-long-term-spike-in-oil.html

1 comment:

BeyondGreen said...: We really need to get serious about becoming energy independent. This past year and the record gas prices played a huge part in our economic meltdown. The one single fact of historically high gas prices seriously damaged our economy and society.The average family went broke filling up the family cars alone. Added to that were the sharp increase of groceries and every consumer product due to increased production and shipping costs passed on to us. Utility companies had record price hikes. And, while we do the happy dance at lower prices at the pumps OPEC is planning deep cuts in production to raise the price per barrel back up to between 75-100 per barrel. We spent 168 BILLION on the last economic stimulus pkg that did nothing to stimulate our economy. We are spending billions upon billions in bailouts. Why not spend some of these billions to get some alternative energy projects set up on a national basis? Create cheap clean energy, create badly needed new green collar jobs, and decrease our dependence on foreign oil! I can't think of a more win-win situation for our nation. It cost the equivalent of 60 cents a gallon to charge and drive an electric plug in car. The electric could be generated from wind or solar.If all gasoline cars, trucks, and suv’s instead had plug-in electric drivetrains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota.Get with it! Utilize free sources such as wind and solar. Stop throwing away money on things that don't work. Invest in America and it's energy independence. Create cheap clean energy, create millions of badly needed green collar jobs. Put America back to work. It is a win-win situation. We have to become more proactive citizens, educate ourselves and demand our elected officials move this country forward into the era of energy independence. Jeff Wilson has a profoundly interesting and informative new book The Manhattan Project of 2009 Energy Independence NOW outlines a plan for America to wean itself off. www.themanhattanprojectof2009.com.
He also has a fascinating article published on a blog called How Much Electricity Does It Take To Replace Gasoline. You can read it @ http://planet.betterplace.com/profiles/blogs/how-much-electricity-does-it; Sunday, December 21, 2008 7:19:00 am

My 18 points guide to Successfully compounding your money in Stocks

Be a good stock picker.
Think as a business owner.
Always look at value rather than the price. Do the homework.
Buy and hold is alright for selected stocks.
Compounding is your friend, get this to work its magic.
Mr. Market is there to be taken advantage of. Do not be the sucker instead. BFS;STS.
Always buy a lot when the price is low.
Never buy when the stock is overpriced.
It is alright to buy when the selected stock is at a fair price.
Phasing in or dollar cost averaging is safe for such stocks during a downtrend, unless the price is still obviously too high.
Do not time the market for such or any stocks.
By keeping to the above strategy, the returns will be delivered through the growth of the company's business.
So, when do you sell the stock? Almost never, as long as the fundamentals remain sound and the future prospects intact.
The downside risk is protected through only buying when the price is low or fairly priced.
Tactical dynamic asset allocation or rebalancing based on valuation can be employed but this sounds easier than is practical, except in extreme market situations.
Sell urgently when the company business fundamental has deteriorated irreversibly.
You may also wish to sell should the growth of the company has obviously slowed and you can reinvest into another company with greater growth potential of similar quality. However, unlike point 16, you can do so leisurely.
In conclusion, a critical key to successful investing is in your stock picking ability.

http://myinvestingnotes.blogspot.com/2012/07/my-18-points-guide-to-successfully.html

11 Lessons From Peter Lynch

Peter Lynch taught me:

1. Behind every stock is a company. Find out what it’s doing.
2. Never invest in any idea you can’t illustrate with a crayon.
3. Over the short term, there may be no correlation between the success of a company’s operations and the success of its stock. Over the long term, there’s a 100% correlation.
4. Buying stocks without studying the companies is the same as playing poker – and never looking at your cards.
5. Time is on your side when you own shares of superior companies.
6. Owning stock is like having children. Don’t get involved with more than you can handle.
7. When the insiders are buying, it’s a good sign.
8. Unless you’re a short seller, it never pays to be pessimistic.
9. A stock market decline is as predictable as a January blizzard in Colorado. If you’re prepared, it can’t hurt you.
10. Everyone has the brainpower to make money in stocks. Not everyone has the stomach.
11. Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you’ve invested.

Lynch’s advice had a profound effect on my stock market approach. He taught me that investment success isn’t the result of developing the right macro-economic view or deciding when to jump in or out of the market. Success is about researching companies to identify those that are likely to report positive surprises.

Capital Expenditure

A great company with a Durable Competitive Advantage will have a ratio of Capital Expenditures to Net Income of less than 25%. Less is better.

Capital Expenditures are expenses on:
- fixed assets such as equipment, property, or industrial buildings
- fixing problems with an asset
- preparing an asset to be used in business
- restoring property
- starting new businesses

A good company will have a ratio of Capital Expenditures to Net Income of less than 50%.

A great company with a Durable Competitive Advantage will have a ratio of less than 25%.

Less is better.

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)

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.

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.

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?

myinvestingnotes.blogspot.my (Bullbear Buffett Stock Investing Notes)

Saturday, 20 December 2008

OPEC calls on UK to cut fuel duty or risk a long-term spike in oil

1 comment:

All equity security investments present a risk of loss of capital

The Ultimate Hold-versus-Sell Test

Some thoughts on Analysing Stocks (KISS)

Benjamin Graham

Sell the losers, let the winners run.

Investment Style

Warren Buffett

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