Bullbear Buffett

Thursday, 19 July 2012

The Science of Getting Rich

http://www.youtube.com/user/thesecrethome

Best Jim Rogers Video Ever

Published on 17 Mar 2012 by thejimrogersblog

Philip Fisher 15 Points for Growth Stocks

Howard Marks - The Most Important Thing - Quotes

Warren get rich style - How to Turn $39 into $5 Million

Top 20 Quotes from Warren Buffett

Winning Methods of the Market Wizard - Jack Schwagger

3 Timeless Ideas for Investing

Peter Lynch's Investment Principles

Wednesday, 18 July 2012

Benjamin Graham: The Intelligent Investor (audiobook)

Security Analysis by Benjamin Graham and David Dodd

Security Analysis, the revolutionary book on fundamental analysis and investing, was first published in 1934, following unprecedented losses on Wall Street.

Benjamin Graham and David Dodd chided Wall Street for its myopic focus on a company's reported earnings per share (eps), and were particularly harsh on the favored "earnings trends." They encouraged investors to take an entirely different approach by estimating the rough value of the operating business that lay behind the security. They have given actual examples of the market's tendency to irrationally under-value certain out-of-favor stocks.

The book is must read for any Stock Market Investor, fundamental analyst or equity research professional.

Investment Policies (Based on Benjamin Graham)

Summary of Investment Policies

A. INVESTMENT FOR FIXED INCOME:
US Savings Bonds (FDs)

B. INVESTMENT FOR INCOME, MODERATE LONG-TERM APPRECIATION AND PROTECTION AGAINST INFLATION:
(1) INVESTMENT FUNDS bought at reasonable price.
(2) Diversified list of primary common stocks (BLUE CHIPS) bought at reasonable price.

C. INVESTMENT CHIEFLY FOR PROFIT: 4 approaches are open to both the small and the large investors:
(1) Representative common stocks bought when the MARKET level is clearly LOW.
(2) GROWTH STOCKS, when these can be obtained at reasonable prices in relation to actual accomplishment – GROWTH INVESTING.
(3) Purchase of securities selling well BELOW INTRINSIC VALUE – VALUE INVESTING.
(4) Purchase of WELL-SECURED PRIVILEGED SENIOR ISSUES (bonds and preferred shares).
(5) SPECIAL SITUATIONS: Mergers, arbitrages, cash pay-outs.

D. SPECULATION:
(1) Buying stock in new or virtually new ventures (IPOs) .(2) TRADING in the market.
(3) Purchase of "GROWTH STOCKS" at GENEROUS PRICES.

_______________

For DEFENSIVE INVESTORS: Portfolio A & B
(Portfolio A: Cash, FDs, Bonds Portfolio B: Mutual funds, Blue chips)

For ENTERPRISING INVESTORS: Portfolio A & B & C
(Portfolio C: Buy in Low Market, Buy Growth stocks at fair value, Buy value stocks i.e. bargains, High grade bonds and preferred shares, Arbitrages)

For SPECULATORS: Portfolio D
(Should set aside a sum for this separate from their money in investing.)

________________
________________

Types of Investors

Graham felt that individual investors fell into two camps : "defensive" investorsand "aggressive" or "enterprising" investors.

These two groups are distinguished not by the amount of risk they are willing to take, but rather by the amount of "intelligent effort" they are "willing and able to bring to bear on the task."

Thus, for instance, he included in the defensive investor category professionals (his example--a doctor) unable to devote much time to the process and young investors (his example--a sharp young executive interested in finance) who are as-yet unfamiliar and inexperienced with investing.

Graham felt that the defensive investor should confine his holdings to the shares of important companies with a long record of profitable operations and that are in strong financial condition. By "important," he meant one of substantial size and with a leading position in the industry, ranking among the first quarter or first third in size within its industry group.

Aggressive investors, Graham felt, could expand their universe substantially,but purchases should be attractively priced as established by intelligent analysis. He also suggested that aggressive investors avoid new issues.

Click and read also:

****My Investment Philosophy, Strategy and various Valuation Methods

Are You an Intelligent Investor?

Knowing Yourself and Keep Investing Simple and Safe

Tuesday, 17 July 2012

Are You an Investor?

By Bonnie Biafore, Contributor, BetterInvesting Magazine On July 16, 2012

Successful investors tend to possess certain characteristics. Do you have them? What do you do, if you don’t? The first step to successful investing is knowing your strengths and weaknesses in the investment game. That way, you can work on those shortcomings and make better investment decisions. The MarketPsych website offers free tests you can take to measure your suitability as an investor as well as other aspects of your financial life.

To take any of the tests, you have to register with the site (it’s free). If you’re concerned about privacy, you can register anonymously.

The Investor Personality test helps you understand your personality traits as they apply to investing. The report you receive gauges your suitability as an investor and offers suggestions for improving any behaviors that could undermine your investment success. The test takes about 20 minutes and includes 60 questions about your personality followed by 15 questions about what you would do in different investment situations.

The personality questions cover a lot of ground. Do you tend to think things through? Do you plan? How do feel about change? Are you usually relaxed or easily stressed? Do you like excitement and adventure? Do you enjoy abstract ideas or prefer practical information? Are you confident? Can you juggle several tasks at once? Can you make decisions or do you vacillate? Do you take others’ feelings into account? Do you react quickly?

The investment questions are a bit tougher because they don’t offer answers for the gray areas we all live in. For example, one question asks whether you would choose to spend more now and have less in retirement, or spend less now and have more in retirement. My answer is neither of those alternatives. Another question asks what you would do if you bought a stock and its price increased significantly over a short period — without any news or information about the company. Yikes! I’m an engineer, so it’s almost impossible to make a decision without any information. Some of the questions include one possible answer: watch the company in order to determine a reasonable purchase or selling price, and then make a decision.

The report you receive rates your personality in several ways, such as how conscientious you are, how emotional you are, whether you are an extrovert or introvert, and your openness and agreeableness. Ratings that appear in green (see screen capture, this page) indicate suitability as an investor, whereas yellow ratings are traits that could inhibit your investment success.

The bias section of the report rates your confidence, risk-taking, discipline, thinking, and herding instinct. For example, the hypothetical results include a below-average score in loss aversion. You can click the Click here link to learn how this trait might harm your investing. For example, the Risk-Related Biases Web page discusses the common mistakes many investors make with their investments, such as holding onto a loser hoping for a comeback. Then, it includes specific advice for high scorers and low scorers for each aspect of risk-taking, including loss aversion, emotional vulnerability, risk aversion, and cutting winners short. In this case, the explanation warns that low scorers for loss aversion might take excessive risk.

http://blog.betterinvesting.org/?p=2020&utm_source=MailingList&utm_medium=email&utm_campaign=BI+Weekly_7-16-12

My Investor Personality Test Results :-)

Investor Personality Test


PERSONALITY FACTORS
Conscientiousness : High
Emotionality : Below Average
Extraversion : Below Average
Openness : Above Average
Agreeableness : Below Average
For Details Click here

BIAS REPORT
Confidence Biases
Overconfidence : Above Average
Over-Optimism : Below Average
For Details Click here


Risk-taking Biases
Risk Aversion : Above Average
Emotional Vulnerability : Below Average
Cutting winners short : Below Average
For Details Click here


Impulse-control
Self-discipline : Above Average
Immediate Gratification : Below Average
Excitement-seeking : Very Low
For Details Click here

Intellectualism
Intellectualism : High
For Details Click here

Herding
Trend-following : Below Average
For Details Click here

SE Asia Stocks: Malaysia at record high; Fed meeting eyed

July 16, 2012

BANGKOK, July 16 – Southeast Asian stock markets extended gains today with Malaysian shares hitting a record high as fears of an economic hard-landing in China subsided, but trading volumes were low as investors waited for a US Federal Reserve meeting.

Malaysia hit an all-time high of 1,635.96 points with a 0.6 per cent gain, while the Philippines outperformed the region with a 1.6 per cent jump.

Indonesia gained 0.7 per cent to a more-than one-week high with, Thailand edged up 0.3 per cent to its highest since May 8.

Singapore closed 0.1 per cent firmer at 2-1/2-month high.

Regional analysts said investors cautiously bought into equities ahead of Federal Reserve Chairman Ben Bernanke’s semi-annual testimony to the US Congress on the economy set for tomorrow and Wednesday. – Reuters

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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?

Bullbear Buffett

Thursday, 19 July 2012

The Science of Getting Rich

Best Jim Rogers Video Ever

Philip Fisher 15 Points for Growth Stocks

Jim Rohn Quotes

Howard Marks - The Most Important Thing - Quotes

Warren get rich style - How to Turn $39 into $5 Million

Top 20 Quotes from Warren Buffett

Charlie Munger Quotes

Winning Methods of the Market Wizard - Jack Schwagger

3 Timeless Ideas for Investing

Peter Lynch's Investment Principles

Wednesday, 18 July 2012

Stock Market Wisdom

Benjamin Graham: The Intelligent Investor (audiobook)

Security Analysis by Benjamin Graham and David Dodd

Investment Policies (Based on Benjamin Graham)

****My Investment Philosophy, Strategy and various Valuation Methods

Tuesday, 17 July 2012

Are You an Investor?

SE Asia Stocks: Malaysia at record high; Fed meeting eyed

July 16, 2012

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