Friday, 31 May 2013

A good quality company trading with a large margin of safety

Company OD

Quarter High Pr Low Pr ttm-eps High PE Low PE
1 10.18 10.02 72.91 13.96 13.74
4 9.15 9.09 72.67 12.59 12.51
3 9.08 9.02 72.60 12.51 12.42
2 9.22 9.16 70.69 13.04 12.96
1 8.76 8.65 69.27 12.65 12.49
5 8.76 8.65 68.84 12.73 12.57
5 8.71 8.63 67.16 12.97 12.85
5 8.77 8.74 65.56 13.38 13.33
5 8.50 8.35 64.06 13.27 13.03
4 8.74 8.62 61.39 14.24 14.04
3 8.98 8.75 58.74 15.29 14.90
2 8.67 8.62 57.70 15.03 14.94
1 9.27 9.10 56.02 16.55 16.24
4 8.42 7.65 53.95 15.61 14.18
3 7.77 6.94 23.44 33.15 29.61
2 7.00 6.62 15.99 43.78 41.40
1 7.08 6.60 12.33 57.42 53.53
4 6.86 6.31 7.95 86.26 79.35
3 3.72 2.97 35.51 10.49 8.35
2 3.86 3.52 39.10 9.88 8.99
1 4.28 3.39 38.52 11.10 8.81
4 5.48 4.97 40.87 13.42 12.15
3 5.59 4.72 46.21 12.09 10.22
2 4.72 4.41 46.26 10.20 9.54
1 7.28 6.07 47.82 15.23 12.69
4 6.51 6.07 45.75 14.23 13.27
3 6.90 6.57 42.91 16.07 15.30
2 7.17 6.57 41.49 17.29 15.82
1 7.01 6.23 39.46 17.76 15.80
4 6.40 6.12 41.06 15.59 14.91
3 5.96 5.74 37.07 16.07 15.48
2 6.12 5.85 38.01 16.11 15.39
1 6.34 5.90 39.24 16.17 15.04
4 6.46 6.18 37.78 17.09 16.36
3 6.29 6.01 39.27 16.02 15.31
2 6.90 6.12 39.48 17.47 15.51
1 6.62 6.46 38.00 17.42 16.99



Quarter Q1 eps   Q2 eps Q3 eps Q4  eps FYE eps Div
0-Jan-00 17.87 0.00 0.00 0.00 17.87 0.00
31/12/2012 17.63 18.64 19.11 17.29 72.67 65.00
31/12/2011 17.20 17.22 17.20 17.22 68.84 36.00
30/06/2011 14.53 15.72 15.60 15.54 61.39 60.00
30/06/2010 12.46 14.04 14.56 12.89 53.95 55.00
30/06/2009 8.08 10.38 7.11 -17.62 7.95 0.08
30/06/2008 10.43 9.80 10.70 9.94 40.87 31.72
30-Jun-07 8.36 11.35 10.76 15.28 45.75 44.14
30-Jun-06 9.96 9.32 9.34 12.44 41.06 46.90
30-Jun-05 8.51 10.55 10.28 8.44 37.78 56.55
Sum 448.14 395.39
DPO 88.2%


Latest share price $10.18
ttm-EPS 72.91 sen
Last FY DPS 65 sen
DPO ratio 89.5%

P/E 13.96
DY 6.39%

Historical P/E range 12 - 16
Historical DY range 4.86% - 6.27%

Estimated EPSGR 8% per year

Present risk free interest rate 4%.

Assuming no growth in its earnings or dividends, and using 4% risk free interest rate
as the discount factor, the present value of:
1.  The earnings stream is equivalent to an asset of  72.91 sen / 4% = $18.23
2.  The dividends stream is equivalent to an asset of  65 sen / 4% = $16.25

At present per share price of $10.18, its upside potential is $18.23 - $10.18 = $ 8.05.
Its downside risk is protected by its dividend yield which is equivalent to an asset of $16.25.  This value exceeds its present share price of $10.18 by a substantial margin of $16.25 - $10.18 = $6.07 per share.
That is, its present share price is at 37.45% below its intrinsic value (the value supported by its dividend yields).

Given its good quality of its business and the large margin of safety at the present market price, this stock is a BUY.


Thursday, 30 May 2013

Good quality company at fair price

COMPANY RD

Quarter High Pr Low Pr ttm-eps High PE Low PE
1 16.90 16.18 111.27 15.19 14.54
4 16.20 15.42 110.48 14.66 13.96
3 15.96 15.02 107.18 14.89 14.01
2 14.46 14.18 104.76 13.80 13.54
1 13.80 13.50 102.70 13.44 13.15
4 14.04 13.54 99.47 14.11 13.61
3 12.78 12.30 98.59 12.96 12.48
2 13.46 12.52 95.28 14.13 13.14
1 13.26 12.98 91.10 14.56 14.25
4 13.54 12.84 87.17 15.53 14.73
3 12.86 12.50 82.66 15.56 15.12
2 12.22 11.92 78.83 15.50 15.12
1 12.04 11.26 75.57 15.93 14.90
4 12.00 10.94 73.31 16.37 14.92
3 11.02 10.62 73.15 15.06 14.52
2 10.30 9.84 73.00 14.11 13.48
1 8.80 8.35 72.99 12.06 11.44
4 9.25 8.55 76.94 12.02 11.11
3 8.80 8.15 74.78 11.77 10.90
2 10.30 9.80 72.62 14.18 13.49
1 12.00 11.30 70.55 17.01 16.02
4 11.80 10.30 63.35 18.63 16.26
3 11.40 10.40 59.38 19.20 17.51
2 11.10 9.90 56.21 19.75 17.61
1 10.20 9.65 54.27 18.79 17.78
4 9.55 8.80 51.79 18.44 16.99
3 8.90 7.60 50.32 17.69 15.10
2 6.90 6.60 47.88 14.41 13.78
1 6.75 6.25 45.39 14.87 13.77
4 6.70 6.45 54.88 12.21 11.75
3 6.75 6.35 63.93 10.56 9.93
2 6.90 6.70 73.23 9.42 9.15
1 13.80 12.90 77.80 17.74 16.58
4 15.50 15.00 64.23 24.13 23.35
3 14.70 13.80 50.49 29.11 27.33
2 10.40 9.92 37.23 27.93 26.64
1 9.84 8.80 29.10 33.81 30.24


ttm-EPS Growth Rates
1yrCAGR 2yrCAGR 5YrCAGR 7YrCAGR 10YrCAGR
8.3% 10.5% 8.9% 13.7% 14.4%

HPE LPE
Avg 5 Yrs 14.29 13.62
Avg 10 Yrs 16.47 15.47

LDY% HDY%
Avg 5 Yrs 4.63% 4.87%
Avg 10 Yrs 6.51% 6.91%


Quarter Q1 eps   Q2 eps Q3 eps Q4  eps FYE eps
31-Dec-13 27.65 0.00 0.00 0.00 27.65
31/12/2012 26.86 27.20 28.08 28.34 110.48
31-Dec-11 23.63 25.14 25.66 25.04 99.47
31-Dec-10 19.70 20.96 22.35 24.16 87.17
31/12/2009 17.44 17.70 18.52 19.65 73.31
31-Dec-08 21.39 17.69 18.37 19.49 76.94
31-Dec-07 14.19 15.62 16.21 17.33 63.35
31-Dec-06 11.71 13.68 13.04 13.36 51.79
31-Dec-05 21.20 11.19 10.60 11.89 54.88
31-Dec-04 7.63 15.76 19.90 20.94 64.23
Sum 709.27
DPO 89.7%


Quarter FYE eps Div Ret Earn DPO%
31-Dec-13 27.65 0.00 27.65 0.0%
31/12/2012 110.48 50.00 60.48 45.3%
31-Dec-11 99.47 48.00 51.47 48.3%
31-Dec-10 87.17 58.00 29.17 66.5%
31/12/2009 73.31 55.00 18.31 75.0%
31-Dec-08 76.94 55.00 21.94 71.5%
31-Dec-07 63.35 75.00 -11.65 118.4%
31-Dec-06 51.79 60.00 -8.21 115.9%
31-Dec-05 54.88 55.00 -0.12 100.2%
31-Dec-04 64.23 180.00 -115.77 280.2%
Sum 709.27 636.00 73.27
DPO 89.7%
FYE eps Div
1YrCAGR 11.1% 4.2%
2YrCAGR 12.6% -7.2%
3Yr CAGR 14.6% -3.1%
5YrCAGR 11.8% -7.8%
8YrCAGR 7.0% -14.8%



Qtr NoROE 
122%
422%
322%
222%
123%
423%
325%
224%
125%
423%
324%
223%
123%
423%
325%
224%
126%
427%
327%
226%
127%
423%
323%
221%
121%
419%
320%
219%
118%
421%
329%
233%
118%
413%
310%
29%
114%


Summary:
At today's price, this company is trading at:
P/E of 15.2 x
DY of 2.96%

Its EPS GR is around 9% to 10% for recent years.
It distributes dividends yearly, though in recent years, it has retained more of its earnings in the company.  
However, given its high ROE of 22% or so, this greater portion of retained earnings is advantageous and beneficial to the long-term investors.
Though its share price has risen over the last 2 years in this bull market, its P/E has only increased minimally or modestly.  





Differences between investment and speculation

Differences between investment and speculation

1.  Investment:  Investment is rationally based on the knowledge of past share price behaviour.  From such knowledge, it is possible to compute the probability of future return.  
  • A common method of investment analysis is to study the past range of PER or DY of a particular share or a class of shares. 
  • From this study of its past price range, we can predict the likelihood of its price being out of this range in the future. 
  • By comparing its current price with the expected future price range (future price = future PER x future earnings) we know whether the current price is too high or too low and take the necessary action accordingly.
Speculation:  Speculation is purely based on the HOPE that the future price will be higher rather than on anything tangible.

2.  Investment:  Investment requires an investor to do some work before hand and decisions are made based on known facts and figure.  
  • Such work typically may consist of estimating future level of Earnings Per Share and computing the past range of the PER. 
  • By multiplying the future EPS with the likely PER, we have an estimate of the future level of price. 
  • If the present price is very low compared with the future price, we buy and vice versa.
Speculation:  Speculation is usually based on wild rumours and unsubstantiated hearsays which cannot be checked for accuracy.  Undoubtely, speculation is a lot easier than investment but one tends to reap what one sows.

3.  Investment: Investment is made for the long term (i.e. two years or more)based on the idea that one is much more certain when one is trying to predict the cumulative results of many daily movement.  Once invests with the knowledge that over the long run, the real investors will always make a gain.

Speculation: Speculation is usually for the short run (i.e three months or lessunless one is caught whence a speculator is then forced to become an investor), based on the idea that certain events may result in a rise in price (bonus, rights, takeovers, and others).

4.  Investment: Over a long period of time, true investment tends to produce a positive result.  Based on many years of research in the US and Europe, Long Term Investment consistently produced much higher return than fixed deposit or the inflation rate.  The Malaysian experience has mirrored the Western experience.

Speculation: Since speculation is not based on anything concrete, its result is not at all predictable.  Speculation can occasionally produce very high gains just as it can produce very high losses.  Over a long period of time, speculation is most unlikely to produce better return than true investment.  

5.  Investment: True investors can sleep soundly at night since they have a fairly good idea of the possible extent of their loss and gain before hand. Besides, since they are investing for the long term, they can forget about short term movements and ignore the market most of the time.  

Speculation: Speculation is likely to lead to many sleepless nights and anxious days since its result is so uncertain.  The speculator will have to be always on the alert to take the necessary quick action to catch the right moment. 


Previously posted in this blog on SUNDAY, OCTOBER 25, 2009

Guinness Malaysia is richly valued

Guinness Malaysia

Quarter Q1 eps   Q2 eps Q3 eps Q4  eps FYE eps
30-Jun-13 18.81 21.90 20.24 0.00 60.95
30/06/2012 18.28 21.79 17.06 11.53 68.66
30/06/2011 12.81 21.40 16.21 9.63 60.05
30/06/2010 8.85 14.50 15.38 11.81 50.54
30/06/2009 15.66 11.48 10.79 9.07 47.00
30-Jun-08 14.27 8.90 12.05 6.45 41.67
30-Jun-07 12.27 8.08 11.23 5.68 37.26
30-Jun-06 12.03 9.90 6.93 13.58 42.44
30-Jun-05 9.70 9.48 7.19 9.37 35.74
30-Jun-04 7.00 11.32 5.89 8.38 32.59
Sum 476.90
DPO 101.3%


EPSGR from 2004 to 2012 (Period 8 years) was about 10% (actual is 9.8%).


Historical PE of Guinness (most recent quarters data at the top.)
Quarter High Pr Low Pr ttm-eps High PE Low PE
3 20.88 20.50 72.48 28.81 28.28
2 18.88 16.46 69.30 27.24 23.75
1 16.88 16.00 69.19 24.40 23.12
4 16.00 15.10 68.66 23.30 21.99
3 13.62 12.70 66.76 20.40 19.02
2 13.80 12.80 65.91 20.94 19.42
1 13.50 11.56 65.52 20.60 17.64
4 10.20 9.40 60.05 16.99 15.65
3 10.66 9.95 62.23 17.13 15.99
2 9.84 9.44 61.40 16.03 15.37
1 10.16 9.10 54.50 18.64 16.70
4 8.39 8.05 50.54 16.60 15.93
3 7.78 7.12 47.80 16.28 14.90
2 7.05 6.80 43.21 16.32 15.74
1 7.12 6.78 40.19 17.72 16.87
4 7.00 6.50 47.00 14.89 13.83
3 6.15 5.90 44.38 13.86 13.29
2 5.65 5.35 45.64 12.38 11.72
1 5.20 4.96 43.06 12.08 11.52
4 5.45 5.05 41.67 13.08 12.12
3 5.45 5.20 40.90 13.33 12.71
2 5.55 5.20 40.08 13.85 12.97
1 5.80 5.35 39.26 14.77 13.63
4 6.10 5.25 37.26 16.37 14.09
3 5.90 5.10 45.16 13.06 11.29
2 6.45 5.80 40.86 15.79 14.19
1 6.60 5.90 42.68 15.46 13.82
4 6.30 5.80 42.44 14.84 13.67
3 5.85 5.45 38.23 15.30 14.26
2 5.85 5.40 38.49 15.20 14.03
1 5.95 5.50 38.07 15.63 14.45
4 5.90 5.50 35.74 16.51 15.39
3 5.85 5.35 34.75 16.83 15.40
2 5.60 5.30 33.45 16.74 15.84
1 5.55 5.10 35.29 15.73 14.45
4 5.30 5.05 32.59 16.26 15.50
3 5.05 4.74 30.59 16.51 15.50



On 29.8.2013, it is priced at $20.80 per share.
This is at a P/E of 28.81 times.

Over the last 8 quarters (2 years):
ttm-EPS has grown from 62.23 sen to 72.48 sen (+16.5%)
P/E has expanded from average of 16.56 times to the average of 28.55 (+72.4%)

Market Price of Share = EPS x PE
The share price of Guinness has risen over the last 2 years "enriching" its business owners.  
This share price increase is partly due to improving EPS and mainly due to the very generous P/E expansion during this period.

Has the market price risen ahead of the value based on the fundamentals of this stock?
In any event, the upside return/downside risk ratio is less enticing and also, the potential return based on the current price is less attractive.































Wednesday, 29 May 2013

AEON: What is its fair value?

AEON
31/12/12 31/12/11 31/12/10 31/12/09 31/12/08
EPS (sen) 60.6 55.7 47.0 38.0 34.4
Gross DPS (sen) 24.0 19.0 16.0 12.0 12.0
NAV per shr ($) 4.19 3.67 3.21 2.80 2.51
ROE % 14.49 15.17 14.67 13.57 13.67
P/E ratio 23.30 13.00 12.96 13.04 12.22
Shr Pr ($) (31/12) 14.12 7.24 6.09 4.96 4.20

On 29.5.2013, Aeon closes at $17.96 per share.
Its latest ttm-EPS was 64.46 sen.
This gives a P/E ratio of 27.86 .

EPS Growth Rate last 5 years was 15.5%
Assuming, future EPS GR is also 15.5%, PEG = 27.86 / 15.5 = 1.8

Its gross DPS in 2012 was 24 sen and at present share price, its DY is 1.34%.

[Historical DY ranges from a high of 2.63% to a low of 1.65%.
Historical PE was < 15. ]


At present price of $17.96 per share, EPS GR of 15%, and P/E ratio of 27.86,
1.  What is the Upside Returns / Downside Risk of this investment at the present price?
2.  What is the Potential Returns of this investment at the present price?








.







Have the Discipline to Say No

1.  A particular security is selling in the market for $25 a share.

2.  The strong fundamental qualities of this security are well known, and as a result, the stock has typically traded at a fair to overvaluation.

3.  At the current price of $25 a share, the stock is indeed slightly above fair value.

4.  Eager to buy, an investor is on constant watch for any dip in stock price, but the dip never comes.

5.  Instead, over the next few weeks the stock seems only to go up in price and is now at $35.

6.  Not wanting to miss out on the continued rise, the investor rushes to buy in.

7.  In the next few weeks, the stock is back at $25 and the investor, an able and bright fellow, feels like the dumbest man on the planet.

8.  His downfall had nothing to do with intelligence.

9.  Instead, it had everything to do with emotions dictating the investment decision.

10.  Whether the security will trade above his purchase price a year from now is irrelevant.

11.  Even if that happens, it's just foolish to dismiss the investment as an intelligent one because the investment process was manipulated by emotional decision making.  

12.  Next to taking a loss, nothing is more painful than the aforementioned chain of events.

13.  Learning to say no until the price is right is of paramount importance.


Referring to the above example, the ultimate failure (or success) of the investment decision was not based on intelligence but on emotion. The investor could not allow himself to "miss" the continued rise in the price of stock.  Disregarding any fundamentals whatsoever, he made the assumption that because the shares had continued to go up for weeks, they would continue to do so.  What is important here is not the investment performance but rather the process employed to make the investment.

Discipline is what separates sensible market loss from foolish market loss.  If you are disciplined and your approach to investment is sound and businesslike, your winners will more than compensate for your losers.  The undisciplined investor is the one who racks up losses similar to the example given earlier.  Succumbing to investment losses in this manner can mean the difference between an above-average and a below-average investment track record.

In cases like this, be disciplined enough to walk away and search elsewhere.  Always remember that any business is undervalued at one price, fairly valued at another, and overvalued at yet another.  The intelligent investor's goal is to buy at the undervalued price, avoid at the fairly valued price, and sell at the overvalued price.  Only by maintaining a very disciplined approach can this strategy be carried out effectively.







The Role Of Parents In Financial Education

The Role Of Parents In Financial Education

The Role Of Parents In Financial Education
As the global economic recovery continues to lose momentum, the issue of financial literacy is becoming increasingly prevalent. This has already prompted political leaders in the United Kingdom and Australia to propose mandatory financial education for students, while the Consumer Financial Protection Bureau (CFPB) in the United States has made numerous recommendations concerning the advancement of fiscal literacy within independent states. Providing a comprehensive financial education to youngsters represents a significant responsibility; however, it is a duty that cannot be carried by schools and local authorities alone.

The Link Between Financial Literacy and Economic Growth
To understand the importance of financial literacy, it is important to consider the recent economic crisis that has engulfed the world. Essentially the result of irresponsible lending and reckless investment, the crisis showcased how poor financial decision-making impacts citizens, business owners and political leaders alike. While banks and lending institutions may have accepted considerable criticism for their role in triggering the recession, it is important to remember that millions of consumers were also willing to enter into poorly thought out and unmanageable financial agreements.

Further support for the importance of financial literacy can also be found in household debt levels from the last five years. Cumulative consumer debt reached its peak of $12.68 trillion at the height of the global recession during the third quarter of 2008, while it has continued to fall as the economy has showed tentative signs of growth. Totaling $11.23 million during the first quarter of 2013, its decline shows that decreased borrowing and more considered financial decision-making has resulted in a more prosperous economy.

So when it comes to economic growth, it is clear that the fiscal decisions that we make as individuals have a tangible impact on the overall economy. Joint research products between the George Washington University School and the University of Pennsylvania have sought to provide more context to this theory by evaluating how low levels of financial literacy lead directly to money-losing decisions and transactions. The results reveal considerable gaps in consumer knowledge concerning pension accounts, credit agreements and the impact of interest rates, which can now be measured in dollars and cents and afford a monetary value to the importance of financial literacy.

Who Should Shoulder the Burden for Imparting Financial Education?
As education remains a matter for the local authority in each state, it is unlikely that the U.S. will see mandatory reforms implemented at a federal level. Despite this, however, there is a common consensus among political leaders that dictates that financial education will be a universal feature of the K-12 curriculum by the end of 2014. While this will make local schools and government bodies primarily responsible for teaching financial literacy nationwide, it is also important to appraise the role of parents and established fiscal institutions.
In general terms, parents and schools must collaborate to deliver a comprehensive education to their children. While parents are charged with cultivating positive behavioral patterns and imparting fundamental values, it is the role of educational authorities to teach academic skills and subject matter. There is an imbalance when it comes to financial literacy, as the current generation of adults are hindered by a distinct lack of money management skills. According to a recent Consumer Financial Literacy survey conducted in 2012, just 59% of adult respondents had savings, while approximately one in four continued to spend outside of their means.

This skills gap is a vast and obvious one, and it has prompted both local authorities and banking organizations to drive financial literacy themselves. In fact, the American Bankers Association has been a keen supporter of financial education since 1997, when it introduced the innovative "Teach Children to Save" program as a way of emphasizing the importance of saving money. While these efforts and recent work by the CFPB have partially offset the lack of parental knowledge, guardians cannot ignore the importance of financial literacy and must instead be encouraged to support a detailed program of education.

The Bottom Line
The need for a concerted program of financial education cannot be ignored, and even though many parents are ill-equipped to lead the charge, they can at least support the efforts of state schools and banking institutions. They certainly cannot afford to adopt the same approach as parents during Chef Jamie Oliver's drive to introduce healthy and nutritional school dinners in the U.K., as thousands allowed their ignorance and lack of knowledge to compromise an extremely beneficial government initiative. By understanding their own shortcomings when it comes to financial literacy and welcoming the local governments' attempts to redress this considerable imbalance, parents can still play a proactive role in creating an entire generation of responsible adults.

Check out our series of guides designed to help you teach financial literacy to children of all ages.

Monday, 27 May 2013

The risks in property development

The risks in property development are:

1.  Insufficient own capital to fund the project.
2.  Over-leverage and excessive borrowings.
3.  Poor sales for various reasons - poor location, industry related reasons.
4.  Cyclical downturn.

Many property projects are launched in the cyclical upturn of the industry.  Soon many more jumped in the game.  When the cyclical downturn comes, the weaker developers suffer.

How then do you assess management quality?

Those in management should have integrity, intelligence and also must be hardworking.  Most importantly, they should have integrity.  Search and look for integrity in the managers; without this, their intelligence and hardworking will work against the interest of the shareholders.

In present day perspective, the shareholders and the management interests are linked or in conflict mainly in two principal areas of:

(1)  competence of management and,
(2)  policies of management toward stockholders - notably in the matter ofdividends.

What are your views of companies hoarding cash aplenty when perhaps, the better decision is to distribute the cash to the shareholders in dividends or share buy-backs?

WHY KEEP CASH?

Different strategies for investing available cash. WHY KEEP CASH?

One significant difference between many investors is evident in the different strategies for investing available cash.

Some investors will typically choose to be fully invested at all times, since cash balances would likely cause them to lag behind a rising market.  

Other investors, by contrast, are willing to hold cash reserves (for the short term) when no bargains are available.  Among the reasons offered are:

1.  Cash is liquid and provides a modest, sometimes attractive nominal return, usually above the rate of inflation.


2.  The liquidity of cash affords flexibility, for it can quickly be channeled into other investment outlets with minimal transaction costs.


3.  Finally, unlike any other holding, cash does not involve any risk of incurring opportunity cost (losses from the inability to take advantage of future bargains) since it does not drop in value during market declines.



Reminder:
Do not underestimate the power of CASH for the short term.
For the long term, CASH deposits will always lose out to inflation.

Saturday, 25 May 2013

The Intelligent Investor is likely to need considerable willpower to keep from following the crowd - Benjamin Graham

Have the Discipline to Say No

Arming yourself with a sound investment philosophy and search strategy puts you on the path to selecting businesses suitable for investment.  Once a business is valued, the most difficult determinants of whether to invest or not come into play.

Unlike valuation, which primarily relies on quantitative measures, investors now must rely on qualitative factors:

  • Having the discipline to say no.
  • Being patient.
  • Having the courage to make a significant investment at a maximum point of pessimism.

These factors are exceedingly important because the probability of suffering investment loss is significantly higher due to the emotional underpinnings of these factors.

Most investors are smart; few, however, are disciplined enough to say no and move on or, more important, be patient.  Very few activities in life can be practiced successfully without some degree of discipline.  Being disciplined requires you to think independently and ignore crowd psychology.  Discipline requires investors to be confident in their research and analysis and be prepared to receive criticism from all angles.

Yet disciplined investors clearly realize that investment success comes from sticking to their methods and not participating in crowd folly.