Friday 23 July 2010
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Margin of Safety Principle: Historical Stock Price Vs Intrinsic Value Per Share
http://www.oldschoolvalue.com/investment-tools/investment-spreadsheet-how-to-use-tutorial/
http://www.hendersonassociates.co.nz/investment-philosophy-xidc11189.html
*Intrinsic value can be defined as the future cash flow a company will generate, discounted back into today's dollars.
Investment Philosophy
Our investment philosophy is based on the notion that if you want to become successful in a discipline, start off by studying those that have already succeeded in it.
When seeking some of the greats in the investing industry to learn from, you can't go past the likes of Warren Buffett, Benjamin Graham and Phil Fisher. Buffett is the Chairman of Berkshire Hathaway and has devoted his life to investing. He is the second richest person in America, behind Bill Gates, and has made over US$35 billon in the stock market over a fifty year period. When it comes to investing people will tend to listen to their friends at the pub, neighbour, stock broker, or a newspaper columnist who has maybe never made money in the stock market, etc, but for some strange reason they dont tend to listen to those that have successful track records.
After studying these investors you learn of a philosophy containing such terms as 'Intrinsic value'*, 'Mr Market', 'Value investing', 'Look-through earnings' etc.
Based on this philosophy we construct our portfolio from a New Zealand investors perspective. We run a database on the top investors from around the world and use this to pick the top ten investment managers for our equity portfolio.
Invariably the factor that distinguishes the managers we use is their focus on purchasing shares that are priced at a sufficient discount to the companys Intrinsic value*. This then provides what Benjamin Graham termed a 'Margin of safety'. Ben wrote in The Intelligent Investor - "Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety."
Preliminary Look at Thong Guan
Thong Guan company website
http://www.thongguan.com/main.htm
The nice growth in revenue of this company from 1995 was not transformed into a similar smooth uptrending growth in earnings. Earnings had been volatile and challenging. Dividends at a glance had not grown over the years.
However, its share price has been beaten down severely since 2005.
The last exciting news on Thong Guan in its website was its venture with ExxonMobil:
By Keith Boi
Posted 26 September 2008 10:04 am GMT
Malaysian film converter Thong Guan has launched a thin gauge stretch packaging film
based on a formulation that includes the Enable metallocene polyethylene (mPE)
technology introduced by ExxonMobil Chemical earlier this year.
To be commercially marketed by Thong Guan, the MaxStretch film is said to use about
40% less material without compromising on film performance and quality, while
addressing sustainability concerns.
Its share price shot up yesterday. Why? Unless you have the facts, it is speculative to own this stock.
Malaysia was well on track to become the fourth deepwater oil and gas hub in the world.
DPM: Malaysia can be come global deepwater oil, gas hub
Published: 2010/07/23
 |
The answer lies in its capacity and capability, he said, stressing that it is paramount for the country to leverage and build on existing O&G assets.
"If done right, Malaysia can become one of the world's key deep-water O&G hubs after Houston, Rio de Janeiro and Aberdeen," he said.
Muhyiddin was speaking to reporters after witnessing a memorandum of understanding signing ceremony between Asian Supply Base Sdn Bhd and Labuan Shipyard and Engineering Sdn Bhd in Labuan yesterday.
Apart from Technip, Di Tullio said other key players in deepwater Malaysia include Malaysian Marine Heavy Engineering, Sapura and Aker Kvaerner.
"Sabah has shown a strong potential in the O&G business," Muhyiddin said, adding that recent deep-water field discoveries there are now being developed and expected to begin production between 2011 and 2015.
"These sizeable ultra deepwater blocks offshore, coupled with the Kebabangan cluster gas fields, the completion of the Sabah Oil and Gas Terminal and the Sabah-Sarawak (Kimanis-Bintulu) gas pipeline project would position Labuan and Sabah as one of the leading O&G hubs in the region.
"Clearly the era of 'easy oil' is over and the exploration and production of O&G will move increasingly into deeper waters, presenting us new challenges as well as opportunities," Muhyiddin said.
However, besides location, a regional hub demands one-stop centres with fully integratedport facilities, warehouses, workshops, ship maintainance and fabrication yards, Muhyiddin said, adding that this is where the partnership between Asian Supply Base and Labuan Shipyard is timely.
Read more: DPM: Malaysia can be come global deepwater oil, gas hub http://www.btimes.com.my/Current_News/BTIMES/articles/dpm22/Article/index_html#ixzz0uSS6JOqU
This news is positive for this company below. Its CEO expressed optimism and has hinted on these developments in his annual report.
Thursday 22 July 2010
Technical Analysis
|
A tale of two depressions
To summarize: the world is currently undergoing an economic shock every bit as big as the Great Depression shock of 1929-30. Looking just at the US leads one to overlook how alarming the current situation is even in comparison with 1929-30.
The good news, of course, is that the policy response is very different. The question now is whether that policy response will work. For the answer, stay tuned for our next column.
http://economistsview.typepad.com/economistsview/2009/04/a-tale-of-two-depressions.html
Apple Inc.
Tue, Jun 10, 2008
Apple shares fell 4% following the release with investors booking profit from the recent boost in stock in anticipation of the 3G iPhone. It is currently trading around $181 with market cap of around $160 billion. In after-hours trading, it fell about 1% to trade around $180. The future of the Apple stock, however, still looks very promising.
Alligator Technical Indicator for Trending Markets
Most of the time the market does not move anywhere.
Just 1530% of all time the market forms some trends
and the traders, who are not in the trading room,
make their profit by the trend movements.
My grandfather often said:
Even a blind chicken will find a corn if you feed
it the same time every day.
We call the trend trading blind chicken market.
Although, it took us several years to work out an indicator,
which allows to keep the gunpowder dry
until we reach the blind chicken market.
Bill Williams
http://internet-traders.blogspot.com/2010/03/alligator-technical-indicator-for.html
Service availability and response time of the stock trade system is very critical for the stock trade company to reduce complaints and retain loyal customers.
Figure 1. The trade system architecture
A stock trade company provides stock trade services to end users. End users access the stock trade services via web browsers, such as Internet Explorer and Firefox, to perform the following operations: logon/logoff the system, quote latest stock prices, transfer money between the stock account and their bank accounts, buy/sell the stocks and query the trade history.
Figure 1 is the trade system architecture. The Stock trading service depends on the three services as shown in Figure 1 - Customer information management service, Stock quote/buy/sell service and Money transfer service. The latter two services are provided by external providers, and consequently, are not managed by the IT department of the stock trade company.
Service availability and response time of the stock trade system is very critical for the stock trade company to reduce complaints and retain loyal customers. Specifically, there are the following requirements:
Availability and response time that real users are experiencing should be monitored. Whenever there is a service quality degradation under the predefined threshold, the problem should be reported to the IT department in a timely manner.
IT department can proactively monitor the system availability and response time, and find the problem before end users report.
After the problem mentioned above is sensed, it should be easy to isolate the problem to specific components or interactions.
When Stock Market Trading Volumes Thin
When Stock Market Trading Volumes Thin
DECEMBER 22, 2009 · 0 COMMENTS
In the days leading up to Christmas, and various other times throughout the year, stock market trading thins considerably. Trading volume levels decrease as stock exchanges close early and many institutions are simply happy to hold onto their positions and wait out the end of the year with their gains.
Lower trading volumes mean less liquidity and therefore higher volatility in prices. Because less shares are moving around, there may not be the requisite number or size of buyers or sellers to complete trades as they come in, and this causes larger discrepancies between bid and ask prices.
Do Lower Trading Volumes Affect the Average Investor?
Because of the general increase in volatility, the main effect that the average investor has to watch out for are the swings in prices. This can cause both increased opportunity for bargains, but you might want to put some stop losses in on your trades as well. Know the levels that you wish to buy and sell at.
When there is more volume, price updates can be more gradual and can spend several minutes if not hours fluctuating between one and two cents in either direction.
It won’t affect your ability to place most trades, however – you just need to keep an eye out on the price swings. For some stocks, you may not even notice a big difference at all.
There is usually another uptick in stock trading in the week following Christmas – then dies down again before the New Year’s weekend before picking back up again in full force in January.
With the lower volume around the Christmas holidays often also comes what many call the Santa Claus rally – upward movements as investors seek to lock in positions before the end of the year. Don’t count on it, though (it didn’t happen in 2008) – because there can be just as much tax-loss selling, too.
Learn the Basics of Stock Options Trading
Outlook for Canadian Stocks in 2010
http://www.getmoneyenergy.com/2009/12/stock-market-trading-volumes-thin/
DECEMBER 22, 2009 · 0 COMMENTS
In the days leading up to Christmas, and various other times throughout the year, stock market trading thins considerably. Trading volume levels decrease as stock exchanges close early and many institutions are simply happy to hold onto their positions and wait out the end of the year with their gains.
Lower trading volumes mean less liquidity and therefore higher volatility in prices. Because less shares are moving around, there may not be the requisite number or size of buyers or sellers to complete trades as they come in, and this causes larger discrepancies between bid and ask prices.
Do Lower Trading Volumes Affect the Average Investor?
Because of the general increase in volatility, the main effect that the average investor has to watch out for are the swings in prices. This can cause both increased opportunity for bargains, but you might want to put some stop losses in on your trades as well. Know the levels that you wish to buy and sell at.
When there is more volume, price updates can be more gradual and can spend several minutes if not hours fluctuating between one and two cents in either direction.
It won’t affect your ability to place most trades, however – you just need to keep an eye out on the price swings. For some stocks, you may not even notice a big difference at all.
There is usually another uptick in stock trading in the week following Christmas – then dies down again before the New Year’s weekend before picking back up again in full force in January.
With the lower volume around the Christmas holidays often also comes what many call the Santa Claus rally – upward movements as investors seek to lock in positions before the end of the year. Don’t count on it, though (it didn’t happen in 2008) – because there can be just as much tax-loss selling, too.
Learn the Basics of Stock Options Trading
Outlook for Canadian Stocks in 2010
http://www.getmoneyenergy.com/2009/12/stock-market-trading-volumes-thin/
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