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.

Showing posts with label agriculture. Show all posts

Sunday, 14 April 2013

How I Learned To Stop Trading And Love The Farm

@ 20 min

Sunday, 3 October 2010

Huge sell-off in agriculture as speculators run

October 2, 2010

Fear of high corn stockpiles and uncertainties in the outlook for sugar and cotton sparked a massive sell-off in agricultural markets on Friday, overshadowing the rally in energy and metals.

US corn futures tumbled the 30-cent trading limit in near record volume to end down 6 per cent for the session and 10 per cent for the week in an extended reaction to Thursday's government crop report showing hefty inventories of the grain.

Soybeans fell 4 per cent on the day and wheat over 3 per cent.

Raw sugar closed down half a per cent, adding to the previous session's drop of almost 6 per cent. Analysts said investors were worried the sweetener's near 50 per cent gain during the third quarter had outpaced demand.

The liquidation marked a sharp reversal in trend for agricultural markets, which were among the biggest gainers in commodities during the just-ended quarter.

"I'm sure that the market had outstripped its fundamentals," Keith Brown, a cotton broker in Moultrie, Georgia, said after US cotton futures plunged about 4 per cent from 15-year highs. "(Speculators) carried us up ... now, they are feeding upon themselves like piranha trying to get out faster than the next guy."

The 19-commodity Reuters-Jefferies CRB index settled down almost half per cent after rising as much earlier in the session, following a 2 per cent rally in oil and copper and a new record high in gold. The CRB rose nearly 11 per cent in the third quarter, its biggest gain in five quarters, with sugar being the index's star performer.

The about-face in agriculture after the strong third quarter made some grains traders wonder if they were looking at the start of a prolonged lean period for prices. But some, like those in the sugar trade, expected a quick rebound.

"With oil so strong and the dollar weakening further, it would seem sugar will hold rather than continue the collapse, and we would expect the support to hold," said Thomas Kujawa of Sucden Financial Sugar, who predicted the sweetener would hold at above 22.50 cents a lb. New York's key raw sugar contract closed at 23.36 cents per lb.

Corn posted its biggest one-day drop since January 12, when the government released another bearish report on stockpiles of the grain. Chicago's key corn contract for December finished at $US4.65-3/4 a bushel, falling the 30 cent that also contributed to its biggest weekly loss since mid-January.

Crude oil's benchmark front-month contract in New York rose almost 2 per cent to settle above $US81 a barrel, a level not seen since August 10, as a sliding dollar caused investors to hedge in oil and metals.

Gold hit record highs for a sixth successive session, scaling above $US1320 per ounce.

Copper rose 2 per cent to scale two-year highs in both London and New York after China's latest manufacturing data showed an important engine of global growth was humming again after sputtering in the second quarter.

Reuters

http://www.smh.com.au/business/markets/huge-selloff-in-agriculture-as-speculators-run-20101002-161g3.html

Monday, 27 April 2009

Swine flu: the UK shares affected

The outbreak of swine flu, which has killed more than 100 people in Mexico and spread to the US, Canada and New Zealand, has hit UK shares linked to travel and agriculture, and give a boost to pharmaceuticals companies. Some of the biggest companies affected are listed below.

By Amy Wilson
Last Updated: 10:26AM BST 27 Apr 2009

GlaxoSmithKline
Shire
British Airways
Easyjet
Thomas Cook Group
TUI Travel
Carnival
InterContinental Hotels Group
Cranswick
Genus

Pharmaceuticals

GlaxoSmithKline: its shares rose as much as 44p, or 4.4pc to 1,050p. Glaxo makes a flu drug called Relenza, which could be bought up by governments seeking to treat and halt the spread of swine flu. Relenza has been shown to work against viral samples of the disease.

Roche: The shares rose in Swiss trading. Roche's Tamiflu drug can reduce the symptoms of swine flu and said it has an ample supply of the drug as the outbreak spread outside Mexico.

Shire: the drugs company’s shares rose in sympathy with Glaxo's.

Airlines:

British Airways: The airline has been hit along with others in the sector, on fear the swine flu outbreak will reduce demand for travel.

easyJet: The low-cost airline fell.

Ryanair: the Irish budget airline was also under pressure.

Travel companies:

Thomas Cook: The holiday company fell on concern the spread of swine fever will curb foreign travel. Mexico has been a popular destination for holidaymakers trying to avoid countries using the euro while it remains so strong against the pound.

TUI Travel: The Thomson holiday group also declined.

Carnival: the cruise operator, whose Caribben cruises take in Mexico, dropped.

Intercontinental: Shares in the hotel operator also fell.

Agriculture:

Cranswick: The food firm, which has just bought a Norfolk-based supplier of pork for Tesco and a number of other major retailers, fell on concern shoppers will avoid pork products as a result of swine flu.

Genus: The pig breeding specialist declined.

http://www.telegraph.co.uk/finance/markets/5229079/Swine-flu-the-UK-shares-affected.html

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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)

Sunday, 14 April 2013

How I Learned To Stop Trading And Love The Farm

Sunday, 3 October 2010

Huge sell-off in agriculture as speculators run

Monday, 27 April 2009

Swine flu: the UK shares affected

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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