The Reasons You Should Invest in Quality Growth Companies for the Long Term

The reasons you should review your philosophy and strategy in stock investing:

1.  You can create wealth only by adding value to resources or by providing a service of value.
2.  Only investments in active businesses are capable of adding value.
3.  Owning a business, though very rewarding, is expensive and risky; but owning shares in a variety of successful businesses eliminates most of the risk while retaining most of the reward.
4.  Buying the stock of quality growth companies and holding it for the long term provides substantial, predictable returns.
5.  Short term trading (BFS/STS) is unpredictable and stacks the odds against you, because it relies upon winning at some loser's expense and because there's no assurance that you won't be the loser.
6.  The benefits of long-term investing include carefree portfolio maintenance, the potential to double your money every five years, the deferment of taxes, and the fact that there are rarely any losers.



Let's review the simple mathematics that makes this method work:

1.  Assume that 15 times earnings is a fair multiple for a good company and that the company earned a dollar per share last year.
2.  You will therefore pay $15 for the stock.
3.  In five years, the earnings will have grown to $2 per share.
4.  At 15 times earnings, the price will then be $30.

The value of your investment will have doubled - in five years!


Hopefully you're satisfied with the logic behind this investing approach and can see its advantages.  

Let's dispel any doubts you might have about whether you can be successful.



The best way to minimize the risk is to invest in good quality companies for the long-term, expecting not to make a killing but to earn as much as good quality companies are capable of earning for their shareholders.

Focus on Investing in Growth Companies for the Long Term

Since the early 1940s, when World War II brought the Depression to an end, there has never been a long-term catastrophe in the stock market.  Even in the worst of times, good companies continue to earn, and many stocks buck the trend.  To be sure, some of the weaker companies with poor management fold, but the well-managed, strong companies quickly scoop up their market share and life goes on.

Focus on investing in growth companies for the long term and , if the time arises when you need to take cash out of your account, sell off portions of your losers - the ones whose sales and profit growth is sluggish, not necessarily the ones whose prices are down.

This will assure you that when the market comes back up, which it surely will, you'll have a portfolio of winners.  Have faith that the companies you own a piece of will perform well in the long term and so, therefore, will your investments.  (And gloat as you continue to rack up 15-percent years while your contemporaries are pulling down 6 percent and paying the taxes on it every month.)

Spain is in 'total emergency’, the EU in total denial

After a Spanish exit from the euro, there would be nothing left to exit from.

Greece in turmoil: but its significance has shrinked in comparison to the possibility of a spectacular crash in Spain, the fourth largest economy in the EU Photo: AFP/GETTY

By Janet Daley

9:00PM BST 02 Jun 2012

775 Comments

I’ve never actually heard the term “total emergency” before, at least not in the context of global economics. It sounds like the title of a disaster movie. When it is uttered in sober tones by the elder statesman of an advanced democracy to describe his country’s financial condition, the effect is rather startling.

The man who delivered this apocalyptic judgment, former Spanish prime minister Felipe González, being a socialist, might be expected to detest austerity programmes that require cuts to government spending. But there seemed to be few disinterested observers of Spain’s economy prepared to quibble with his assessment.

Forget Grexit. Greece’s teeny, tiny economy is a footnote now. As is Ireland’s decision – which seemed more like a sigh of resignation than a plebiscite – to engage in however much self-flagellation the EU gods insist on, for however long it takes. What might have seemed dramatic a week or so ago has now shrivelled in importance by comparison to the realistic possibility of a spectacular crash in the fourth largest economy in the EU. Spexit (and Spanic) are lodged in the lexicon, and have become part of the psychological reality that moves markets. The equivalent of more than £55 billion was withdrawn and transported out of Spain last month – and that was before the country’s largest bank was nationalised. No one seems to be kidding himself that the collapse of the Spanish economy could be somehow weathered and overcome, as the default of Greece might be.

Read more here:

http://www.telegraph.co.uk/finance/financialcrisis/9307106/Spain-is-in-total-emergency-the-EU-in-total-denial.html

Boustead's 421,460 shares crossed 15% below Friday close

KUALA LUMPUR: Boustead Holdings Bhd's 421,460 shares were transacted in an off-market deal on Monday at RM4.35.

Stock market data showed at RM4.35, this was 15% or 77 sen below last Friday's closing price of RM5.12

At 3.41pm, its share price was down nine sen to RM5.03 in regular trade.

Boustead's paid-up is 1.034 billion shares.

The week that Europe stopped pretending

The euro has essentially broken down as a viable economic and political undertaking. The latest rush of events reeks of impending denouement.

The debt markets are pricing in for a global deflationary bust. Europe will have to restore shattered trust in the worst possible circumstances Photo: Reuters

By Ambrose Evans-Pritchard

8:00PM BST 03 Jun 2012

534 Comments

Switzerland is threatening capital controls to repel bank flight from Euroland. The Swiss two-year note has fallen to -0.32pc, not that it seems to make any difference.

Denmark’s central bank said it was battening down the hatches for a "splintering" of EMU. It has cut interest rates twice in a matter or days and pledged to do whatever it takes to stop euros flooding into the country. Contingency plans are on the lips of officials in every capital in Europe, and beyond.

On a single day, the European Commission said monetary union was in danger of "disintegration" and the European Central Bank said it was "unsustainable" as constructed. Their plaintive cries may have fallen on deaf ears in Berlin, but they were heard all too clearly by investors across the world.

Joschka Fischer, Germany’s former vice-Chancellor, said EU leaders have two weeks left to save the project.

"Europe continues to try to quench the fire with gasoline – German-enforced austerity. In a mere three years, the eurozone’s financial crisis has become an existential crisis for Europe."

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"Let’s not delude ourselves: If the euro falls apart, so will the European Union, triggering a global economic crisis on a scale that most people alive today have never experienced," he said.

Mr Fischer has the matter backwards. The euro itself is the chief cause of the existential crisis he discerns. Yet he is right that three precious year have been squandered, and that Europe‘s policy mix has been atrociously misguided. The pace of fiscal tightening has been too extreme, made much worse by the ECB’s monetary tightening last year. This inflicted a double-barrelled shock on Southern Europe. The whole region was forced back into slump before it had reached "escape velocity".

The window of opportunity offered by US recovery is slamming shut again. America’s dire jobs data for May - and the downward revision for April - confirm the fears of cycle specialists that the US economy has slipped below stall speed. America risks tanking back into recession as the "fiscal cliff" approaches late this year, unless the Fed comes to the rescue again soon.

Brazil wilted in the first quarter. India grew at the slowest pace in nine years. China’s HSBC manufacturing index fell further into contraction in May, with new orders dropping sharply and inventories rising.

We face the grim possibility that all key engines of the global system will sputter together, this time with interest rates already near zero in the West and average public debt in the OECD club already at a record 106pc of GDP.

"The world’s largest emerging economies are no longer in a position to carry the global economy through tough times, as they did during the 'recovery' years of 2009-2011," said China expert Andy Xie.

The warnings from the bond markets could hardly be clearer. German 10-year Bund yields closed at 1.17pc. The two-year notes turned negative. British Gilts closed at 1.53pc, the lowest in 300 years. US Treasuries fell to 1.45pc, lower than at any time during the Great Depression.

The debt markets are pricing in for a global deflationary bust. Europe will have to restore shattered trust in the worst possible circumstances.

If deposit flight from Spain was €66bn in March before the Greek election tore away the pretence that Europe had solved anything, one dreads to think what it will be in April and May when the data come out.

Alberto Gallo from RBS says Spain will need an EU rescue package of €370bn to €450bn to bail out its crippled property lenders and limp through to 2014, pushing public debt to 110pc of GDP.

This would be the biggest loan package in history by a huge margin. Whether the EU bail-out fund could raise the money on the global markets at viable cost is an open question.

Spanish premier Mariano Rajoy vowed in any case last week that there would no such rescue. It is not a vow he can break quickly or easily, whatever dissidents in his party may want.

Mr Rajoy is gambling that Germany will blink first, letting the ECB intervene in the bond markets to cap Spanish yields.

Europe’s officials seem to think Spain can be pushed into a bail-out - as Ireland and Portugal were pushed - but it is far from clear that Mr Rajoy will accept the long agony of debt-deflation, or take lessons from Brussels.

Heretical thoughts are gaining traction. El Confidencial suggested that Spain should engage in "blackmail" against the EU ("chantaje" in Spanish). "Rajoy has a card up his sleeve: leaving the euro. It is not the best option, and fundamentally it is not what most people want. But the time has come to make Brussels a poisonous proposal: "we have already done everything we possibly can, and if you won’t help us, we will leave," it said.

Mr Rajoy has not yet reached such a desperate point, yet his language over the weekend has an ambiguous feel. "We must ensure that the euro remains the currency of our countries," he told Catalan business leaders.

A group of leading professors wrote a joint appeal in Expansion, exhorting the Spanish nation to muffle their ears and resist the "siren song" of those arguing - and gaining ground - that liberation lies at hand with an "Argentine" dash for the peseta and economic sovereignty. It has come to this.

Italy is scarcely more predictable. Ex-premier Silvio Berlusconi offered us his cunningly pitched "mad idea" on Friday. If the ECB refuses to act as a lender of last resort, Italy should take matters into its own hands. "We should use our own mint to print euros," he said. It is a thinly veiled threat.

"People are in shock. Confidence has collapsed. We have never had such a dark future," he said. Indeed, the jobless rate for youth has jumped from 27pc to 35pc in a year. Terrorism has returned. Anarchists knee-capped the head of Ansaldo Nucleare last month. Italy’s tax office chief was nearly blinded by a letter bomb.

"If Europe refuses to listen to our demands, we should say 'bye, bye’ and leave the euro. Or tell the Germans to leave the euro if they are not happy," he said.

Mr Berlusconi is no longer prime minister. But he still controls the biggest bloc of seats in the Italian parliament and can bring the technocrat government of Mario Monti to its knees at any time.

His point is entirely valid in any case. The ECB’s failure to ensure financial stability - the primary task of any central bank - is shockingly irresponsible. It is this that has driven his country into a liquidity crisis. What did Italy do wrong to justify a surge in bond spreads to a record 464 basis points last week? It is close to primary budget surplus, and has been for five years.

Germany can break the logjam at any time by agreeing to fiscal union, debt-pooling and full mobilization of the ECB, with all that this implies for its democracy. The answer from Chancellor Angela Merkel over the weekend was "under no circumstances". In that case, prepare for the consequences.


http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9309669/The-week-that-Europe-stopped-pretending.html

Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.

If I can’t convince you that a market downturn is no reason to panic, maybe the world’s greatest investor can. In his 1997 letter to Berkshire Hathaway shareholders, Warren Buffett wrote:

A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves.

But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they rejoice because prices have risen for the “hamburgers” they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.
The next time the stock market takes a tumble, remember Buffett’s advice. And then go out and buy yourself some hamburgers!

Coastal

Nestle

Nestle
Announcement	Qtr	EPS	ttm-EPS	Price
Date	No	(Cents)	(Cent)	(RM)	PE	DY	P/NTA
25/04/2012	1	67.41	196.89	55.86	28.4	3.2%	15.65
23/02/2012	4	37.13	194.59	55.80	28.7	3.2%	20.44
11/04/2011	3	46.91	174.20	50.00	28.7	3.3%	17.06
18/08/2011	2	45.44	175.56	47.90	27.3	3.4%	18.57
20/04/2011	1	65.11	172.83	48.00	27.8	3.4%	14.63
24/02/2011	4	16.74	166.91	45.30	27.1	6.1%	17.29
28/10/2010	3	48.27	186.94	43.40	23.2	3.5%	14.76
26/08/2010	2	42.71	172.68	42.00	24.3	3.6%	17.00
21/04/2010	1	59.19	166.41	34.30	20.6	4.4%	11.32
25/02/2010	4	36.77	150.01	34.14	22.8	6.6%	14.11
29/10/2009	3	34.01	146.19	33.18	22.7	5.8%	13.01
27/08/2009	2	36.44	149.51	34.50	23.1	5.5%	15.75
15/04/2009	1	42.79	147.92	30.00	20.3	6.4%	11.41
26/02/2009	4	32.95	145.36	29.50	20.3	9.4%	13.41
30/10/2008	3	37.33	126.84	27.50	21.7	4.1%	14.40
08/07/2008	2	34.85	138.96	27.25	19.6	4.2%	13.16
23/04/2008	1	40.23	134.99	29.50	21.9	3.9%	9.49

Nestle
Announcement	Revenue	PBT	Net Profit	EPS	Dividend	NTA	Qtr
Date	(RM,000)	(RM,000)	(RM,000)	(Cent)	(Cent)	(RM)	No
25/04/2012	1164128	206827	158080	67.41	0	3.57	1
23/02/2012	1188961	101847	87066	37.13	125	2.73	4
11/04/2011	1171468	138080	110000	46.91	0	2.93	3
18/08/2011	1155567	127775	106549	45.44	55	2.58	2
20/04/2011	1184998	191107	152686	65.11	0	3.28	1
24/02/2011	963893	45004	39259	16.74	115	2.62	4
28/10/2010	991076	132652	113187	48.27	0	2.94	3
26/08/2010	1050863	117470	100153	42.71	50	2.47	2
21/04/2010	1020487	170617	138798	59.19	0	3.03	1
25/02/2010	950632	99175	86224	36.77	100	2.42	4
29/10/2009	886812	106411	79760	34.01	0	2.55	3
27/08/2009	922857	104271	85455	36.44	50	2.19	2
15/04/2009	983932	130404	100354	42.79	0	2.63	1
26/02/2009	972648	104798	77279	32.95	80	2.2	4
30/10/2008	961822	113063	87542	37.33	0	1.91	3
08/07/2008	1014910	98733	81720	34.85	50	2.07	2
23/04/2008	927688	124758	94345	40.23	61.19	3.11	1

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LPI

LPI
Announcement	Revenue	PBT	Net Profit	EPS	Dividend	NTA	Qtr
Date	(RM,000)	(RM,000)	(RM,000)	(Cent)	(Cent)	(RM)	No
04/09/2012	246061	37821	31477	14.29	0	5.07	1
01/09/2012	239323	51999	39334	17.85	50	5.36	4
10/06/2011	236385	55948	45116	20.48	0	4.88	3
07/07/2011	213889	41971	31418	14.26	25	5.21	2
04/07/2011	213412	50135	38626	17.54	0	5.015	1
01/11/2011	190745	49135	36937	16.77	45	5.267	4
10/07/2010	216952	47445	36205	16.85	0	4.978	3
07/08/2010	188439	35896	26444	19.21	10	6.831	2
04/08/2010	235071	48831	38322	27.84	0	6.54	1
01/07/2010	154421	46520	34971	25.4	41.25	6.542	4
10/08/2009	206625	42584	32897	23.9	0	5.84	3
07/06/2009	166346	29994	22742	16.52	26.25	5.384	2
04/08/2009	210907	42237	35478	25.77	0	4.701	1
01/08/2009	117130	44517	32690	23.75	55	2.642	4
10/09/2008	191728	35379	26236	19.06	0	2.404	3
07/09/2008	144308	24308	17906	13.01	30	2.434	2
04/09/2008	185562	37360	27415	19.91	0	2.292	1

LPI
Announcement	Qtr	EPS	ttm-EPS	Price
Date	No	(Cents)	(Cent)	(RM)	PE	DY	P/NTA
04/09/2012	1	14.29	66.88	13.98	20.9	5.4%	2.76
01/09/2012	4	17.85	70.13	13.84	19.7	5.4%	2.58
10/06/2011	3	20.48	69.05	11.78	17.1	4.4%	2.41
07/07/2011	2	14.26	65.42	13.80	21.1	3.7%	2.65
04/07/2011	1	17.54	63.17	13.76	21.8	3.7%	2.74
01/11/2011	4	16.77	63.03	13.80	21.9	2.3%	2.62
10/07/2010	3	16.85	62.13	11.28	18.2	3.7%	2.27
07/08/2010	2	12.01	60.22	4.56	7.6	9.2%	1.07
04/08/2010	1	17.40	58.54	5.74	9.8	7.4%	1.40
01/07/2010	4	15.88	57.24	5.01	8.7	4.8%	1.22
10/08/2009	3	14.94	56.21	4.87	8.7	10.9%	1.33
07/06/2009	2	10.33	53.19	4.38	8.2	12.1%	1.30
04/08/2009	1	16.11	50.99	3.87	7.6	13.7%	1.32
01/08/2009	4	14.84	47.33	3.49	7.4	7.2%	2.12
10/09/2008	3	11.91	43.93	3.36	7.7	20.4%	2.24
07/09/2008	2	8.13	41.79	4.22	10.1	16.3%	2.77
04/09/2008	1	12.44	40.56	4.61	11.4	14.9%	3.22

GENM
Announcement	Qtr	EPS	ttm-EPS	Price
Date	No	(Cents)	(Cent)	(RM)	PE	DY	P/NTA
30/05/2012	1	4.78	22.62	3.84	17.0	2.2%	1.72
28/02/2012	4	6.17	25.21	3.80	15.1	2.3%	1.80
24/11/2011	3	6.13	25.43	3.86	15.2	2.1%	1.87
25/08/2011	2	5.54	25.22	3.32	13.2	2.4%	1.61
26/05/2011	1	7.37	25.04	3.63	14.5	2.2%	1.76
23/02/2011	4	6.39	22.45	3.42	15.2	0.5%	1.67
25/11/2010	3	5.92	22.35	3.39	15.2	2.2%	1.73
26/08/2010	2	5.36	22.73	2.96	13.0	2.5%	1.67
27/05/2010	1	4.78	23.15	2.70	11.7	2.7%	1.53
25/02/2010	4	6.29	23.18	2.69	11.6	0.6%	1.51
25/11/2009	3	6.30	10.14	2.77	27.3	2.5%	1.61
26/08/2009	2	5.78	9.78	2.71	27.7	2.5%	1.70
27/05/2009	1	4.81	9.52	2.49	26.2	2.8%	1.64
25/02/2009	4	-6.75	9.80	1.84	18.8	0.4%	1.27
26/11/2008	3	5.94	17.81	2.14	12.0	0.6%	1.53
23/08/2007	2	5.52	14.31	2.45	17.1	0.5%	1.93
28/05/2008	1	5.09	9.90	2.59	26.2	0.5%	1.89

GENM
Announcement	Revenue	PBT	Net Profit	EPS	Dividend	NTA	Qtr
Date	(RM,000)	(RM,000)	(RM,000)	(Cent)	(Cent)	(RM)	No
30/05/2012	1903801	378541	270664	4.78	0	2.23	1
28/02/2012	2331245	453734	349281	6.17	4.8	2.11	4
24/11/2011	2315836	463084	347145	6.13	0	2.06	3
25/08/2011	1896025	430342	313753	5.54	3.8	2.06	2
26/05/2011	1950580	553488	417698	7.37	0	2.06	1
23/02/2011	1558525	503218	362125	6.39	4.4	2.05	4
25/11/2010	1202916	416262	336417	5.92	0	1.96	3
26/08/2010	1226492	414130	305690	5.36	3.6	1.77	2
27/05/2010	1345170	397842	272364	4.78	0	1.77	1
25/02/2010	1275555	469385	358320	6.29	4.3	1.78	4
25/11/2009	1335901	470667	359456	6.3	0	1.72	3
26/08/2009	1202256	438859	330481	5.78	3	1.59	2
27/05/2009	1175383	385682	275444	4.81	0	1.52	1
25/02/2009	1329102	-244496	-387843	-6.75	4	1.45	4

Published: Wednesday May 30, 2012 MYT 7:26:00 PM

Genting Malaysia Q1 earnings down 35% to RM270.6m

KUALA LUMPUR: Genting Malaysia Bhd's earnings fell 35.2% to RM270.66mil in the first quarter ended March 31, 2012 from RM417.69mil a year ago due to higher depreciation and amortisation charges.

It reported on Wednesday profit before taxation fell 32% to RM378.5mil. Revenue fell 2.4% to RM1.903bil from RM1.950bil. Earnings per share were 4.78 sen compared with 7.37 sen.

"This decrease (in pre-tax profit) arose principally due to the lower adjusted EBITDA, higher depreciation and amortisation charges by RM50mil mostly from the group's operations in the US and pre-operating expenses of RM17.7mil incurred in relation to the masterplan development of a destination resort in the City of Miami, Florida, US," it said.

Elaborating on the revenue, it said the Malaysia and UK leisure and hospitality businesses reported RM1.654bil in revenue, or 1% lower on-year due to weaker hold percentage in the premium players business despite an overall higher volume of business.

The revenue from the leisure and hospitality business in the US was RM218.4mil, mainly from the operations of Resorts World Casino New York City (RWNYC) which started in in the fourth quarter of 2011.

Genting Malaysia pointed out there was no construction revenue compared with RM264.6mil a year ago as development of RWNYC was completed.

The group's adjusted EBITDA for Q1, 2012 fell 18% to RM513.1mil from RM625.4mil a year ago.

In Malaysia, the lower adjusted EBITDA was mainly due to higher payroll costs and promotional expenses whilst bad debts written off gave rise to lower contributions from the UK. "Included in adjusted EBITDA for the leisure and hospitality business in US for Q2, 2012 was the construction loss of RM48.2mil (construction profit of RM13.4mil in Q1, 2011). This was incurred due to cost overrun from the development of RWNYC," it said.

Genting Malaysia said if the construction loss of RM48.2mil was excluded, the adjusted EBITDA for leisure and hospitality in US would have been RM49.5mil, mainly from the operations of RWNYC.

http://biz.thestar.com.my/news/story.asp?file=/2012/5/30/business/20120530194215&sec=business