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.

Wednesday 9 August 2017

Semicon support firms upbeat

Saturday, 23 April 2016

BY DAVID TAN

Eye for detail: Chuah checking out test equipment produced for the automotive and semiconductor industries.

Strong sales seen for second quarter after a slow first quarter

THE semiconductor test and vision inspection equipment makers in the country are projecting a strong second quarter of 2016, following a slow first quarter, in line with the projection of SEMI South-East Asia.

The companies expecting a strong second quarter are

MMS Ventures expects to deliver test equipment for the automotive and smart device industries with a market value of RM16mil in the second quarter compared with RM11mil from the same period last year.

“Both the automotive and smart device industries contribute 60% to group revenue.

“As for the third and fourth quarters, there is no visibility yet, because orders usually come in three months before the delivery.

“We should see orders for the third quarter arriving in May. The test equipment would need to be shipped out by August and September,” its managing director T.K. Sia says.

Pentamaster Corp Bhd executive chairman C.B. Chuah says the group would deliver approximately RM40mil of test equipment in the second quarter of 2016.

“About 30% of the test equipment are for the automotive segment, while the remaining for the smart devices.

“We are projecting a double digit percentage growth for our revenue and bottomline in 2016,” he adds.

In the first quarter 2016, the group delivered about RM30mil of test equipment, according to Chuah.

In the second quarter, Elsoft Research expects to deliver 40 units of test equipment priced between US$100,000 and US$200,000 per unit for customers in the automotive, smart devices, and general lighting segments.

“The customers are in Malaysia, Thailand, China, and Taiwan.

“There is no visibility yet for the second half,” says Elsoft chief executive officer C.E. Tan.

Vitrox Corp chief executive officer Chu Jenn Weng, meanwhile, says that the second quarter is expected to improve over the same period of a year ago.

“We had a very good first quarter 2016, even though the first period is traditionally a soft quarter.

“For this reason, we are confident of a good second quarter compared to last year’s second period.

“As of now, we have more than RM25mil worth of backlog orders for vision inspection equipment to be delivered in the second quarter,” he adds.

SEMI South-East Asia has recently forecast that the capital expenditure for the fab equipment manufacturing sector in South-East Asia would grow to US$1.8bil (RM7bil) in 2016 from US$1bil (RM3.9bil) in 2015.

Its president Ng Kai Fai says this would have a positive impact on the test equipment industry in South-East Asia.

“The capital expenditure for the test equipment sector in South-East Asia is projected to increase to US$580mil in 2016 from US$530mil, creating spill-over effects for the test-equipment and the electronic manufacturing cluster in Penang,” Ng explains.

SEMI is the global industry association serving the manufacturing supply chain for the micro- and nano-electronics industries.

The Free Industrial Zone, Penang, Companies’ Association (Frepenca) chairman Dr Roland Mueller says that based on the members feedback obtained in the first quarter of 2016, some 57% of the members expect results to improve in the second half of 2016.

“This is an improvement over the survey done in the fourth quarter 2015 which showed that 36% of the members were optimistic of achieving better results in the second half of 2016,” Mueller says.

However, the overall prevailing mood in the semiconductor and electronics industry is still cautious, Mueller says.

“The first quarter survey also showed that some 57% of the members have indicated that they do not plan to engage new workers and may also reduce the size of the workforce this year, compared to 43% of the members with plans to engage new headcount in 2016.

“The percentage of members with plans to introduce new products in 2016 have also dropped slightly to 71% from the 73% surveyed in the fourth quarter 2015.

“Those with plans to invest fresh capital to adopt new technologies this year have also declined slightly to 70%.

“In the fourth quarter 2015, some 75% indicated that they were keen to adopt innovative technologies with new capital investments,” Mueller says.

The recent ban on foreign workers into Malaysia is one of the reasons for the prevailing cautious mood of the manufacturing industry, according to Mueller.

“The manufacturing sector, across the board, is very dependent on foreign workers.

“If there is a shortage of foreign workers, our members would not be able to plan for expansion.

“This is why there are some members who have indicated that they may cut down the size of their investments in Malaysia and relocate to neighbouring countries, in light of the shortage,” he adds.

The Frepenca companies, comprising 70 local firms and multinational corporations from the United States and Europe, are involved in the semiconductor and electronics industries.

Read more at http://www.thestar.com.my/business/business-news/2016/04/23/semicon-support-firms-upbeat/#X0rY0bC8U9UFqOoJ.99

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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)

Wednesday 9 August 2017

Semicon support firms upbeat

BY DAVID TAN

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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

Political and Economic News

Interesting Blogs