Great Investors Not Named Buffett

George SorosPerhaps it would have seemed impossible to imagine as he was living through World War II, but George Soros became one of the most successful investors in history. With a current net worth north of $14 billion, Soros is largely retired as an active investor. However, he established a remarkable record while running the Quantum Group of hedge funds. 

Soros is mostly known for his successes in making large bets in the currency and commodity markets. The most famous success story of his career is most likely Britain's Black Wednesdaycurrency crisis, where Soros correctly surmised that the country would have to devalue the pound and reportedly made around $1 billion on his positions. 

Whereas Buffett is famous for carefully evaluating individual companies and holding those positions for years, Soros was much more inclined to base his investment decisions on what would be considered macroeconomic factors. What's more, investments in the currency and commodity markets do not lend themselves to multi-decade (or even multi-month) commitments, so Soros was a much more active investor. (George Soros spent decades as one of the world's elite investors, and even he didn't always come out on top. But when he did, it was spectacular. Check out George Soros: The Philosophy Of An Elite Investor.) 

Ronald PerelmanSome will question whether Perelman is properly called an "investor." Though no one will dispute that a net worth of approximately $12 billion entitles him to be seen as a significant success in business, Pererlman's activities have centered on acquiring businesses outright, refocusing them on core competencies (often through spin-offs) and then either selling the companies later at a profit or holding onto them for the cashflow they produce. In that latter regard, though, Perelman is not so unlike Buffett - much of Buffett's success can be tied to the prudent acquisition of value-creating businesses within Berkshire Hathaway. 

While Perelman has frequently faced criticism for his acquisition tactics and management decisions, he has nevertheless had many successful transactions, including his involvement in Marvel, New World Communications and several thrifts, savings and loans and banks. 

Try Currency Trading Risk-Free at FOREX.com  

John PaulsonWith about $16 billion in net worth, John Paulson is arguably the most successful hedge fund investor today. What makes that even more impressive is that he founded Paulson & Co in 1994 with purportedly with only $2 million. Paulson really made his name during the credit crisis that marked the end of the housing bubble; reportedly shorting CDOs, mortgage backed securities and other tainted housing-related assets, as well as shorting the shares of several major British banks. Perhaps ironically, Paulson has benefited from both sides of that trade, having also taken long positions in companies like Regions Financial, Goldman Sachs, Bank of America and Citigroup. 

Carl IcahnIn some respects, Carl Icahn follows an approach that is somewhat similar to Warren Buffett, as Icahn has built his fortune through a combination of equity investments and outright acquisitions. That is where the similarities end, though, as Icahn has generally pursued a much more aggressive strategy and shown no particular reticence to launch hostile offers. What's more, Icahn is not often interested in investing in business and seeing them continue to run as before; Icahn has built a reputation as a so-called activist investor who frequently pushes corporate managements to restructure, sell assets and return cash to shareholders. 

Differences aside, Icahn's strategy has worked. Icahn has built a fortune reportedly worth in excess of $11 billion through his involvement in a range of companies including RJR Nabisco, Viacom and Time Warner. (Buying up failing investments and turning them around helped to create the "Icahn lift" phenomenon. To learn more, check out Carl Icahn's Investing Strategy.)

James SimonsIf there is an "anti-Buffett" on this list, James Simons may be a good candidate. Holding a PhD in mathematics from Berkeley, Simons founded Renaissance Technologies and uses exceptionally complicated mathematical models to analyze and evaluate trading opportunities. While Buffett is famous for having a minimal staff, Renaissance Technologies reportedly employs dozens of PhDs in fields like physics, mathematics and statistics to find previously under-used correlations and connections that can be used for better trading results. 

Or at least that is as much as is known about Renaissance Technologies - while Buffett is rather open about his investment philosophies and methodologies, Simons maintains a much lower profile. Nevertheless, this heavily quantitative approach seems to work. Mr. Simons is estimated to be worth nearly $11 billion and his funds have been so successful that they can charge outsized management fees and profit participation percentages to investors. 

Others Worthy Of NoteInvestors would also do well to consider the careers of other well-known investors like Jim Rogers, Mark Mobius, and Peter Lynch. While Mobius is the only one of the three still highly involved in day-to-day investment operators, all three men have become very closely associated with their particular investment philosophies. Rogers is a go-to commentator on commodities and macroeconomic investments, while Mobius may be the best known emerging-markets investor of all time. 

Peter Lynch, though many years removed his tenure at Fidelity and his management of the Magellan fund, is still widely seen as a leading voice in "disciplined growth" investing. All three men have written about their investment philosophies and outlooks, and their approaches are accessible and informative. (For related reading, check Pick Stocks Like Peter Lynch.)

The Bottom LineInvestors should cast their eyes beyond Warren Buffett if they wish to really learn about all that investing can offer. There is no doubting or ignoring Buffett's exemplary record, but there is always more to learn by broadening the pool of examples. While investors like Simons and Soros may seem to focus on strategies and techniques that are beyond the means of regular investors, there are still valuable lessons to be learned about macroeconomics and the benefits of looking at the markets in new and proprietary ways. 

http://www.investopedia.com/financial-edge/0511/great-investors-not-named-buffett.aspx?utm_source=coattail-buffett&utm_medium=Email&utm_campaign=WBW-7/18/2013

Buffett Vs. Soros: Investment Strategies

In the short run, investment success can be accomplished in a myriad of ways. Speculators and day traders often deliver extraordinary high rates of return, sometimes within a few hours. Generating a superior rate of return consistently over a further time horizon, however, requires a masterful understanding of the market mechanisms and a definitive investment strategy. Two such market players fit the bill: Warren Buffett and George Soros.

Warren Buffett
Known as "the Oracle of Omaha," Warren Buffett made his first investment at the tender age of 11. In his early 20s, the young prodigy would study at Columbia University, under the father of value investing and his personal mentor, Benjamin Graham. Graham argued that every security had anintrinsic value that was independent of its market price, instilling in Buffett the knowledge with which he would build his conglomerate empire. Shortly after graduating he formed "Buffett Partnership" and never looked back. Over time, the firm evolved into "Berkshire Hathaway," with a market capitalization over $200 billion. Each stock share is valued at near $130,000, as Buffett refuses to perform a stock split on his company's ownership shares.

Warren Buffett is a value investor. He is constantly on the lookout for investment opportunities where he can exploit price imbalances over an extended time horizon.

Buffett is an arbitrageur who is known to instruct his followers to "be fearful when others are greedy, and be greedy when others are fearful." Much of his success can be attributed to Graham's three cardinal rules: invest with a margin of safety, profit from volatility and know yourself. As such, Warren Buffett has the ability to suppress his emotion and execute these rules in the face of economic fluctuations.

George Soros
Another 21st century financial titan, George Soros was born in Budapest in 1930, fleeing the country after WWII to escape communism. Fittingly, Soros subscribes to the concept of "reflexivity" social theory, adopting a "a set of ideas that seeks to explain how a feedback mechanism can skew how participants in a market value assets on that market." 

Graduating from the London School of Economics some years later, Soros would go on to create the Quantum Fund. Managing this fund from 1973 to 2011, Soros returned roughly 20% to investors annually. The Quantum Fund decided to shut down based on "new financial regulations requiring hedge funds to register with the Securities and Exchange Commission." Soros continues to take an active role in the administration of Soros Fund Management, another hedge fund he founded.

Where Buffett seeks out a firm's intrinsic value and waits for the market to adjust accordingly over time, Soros relies on short-term volatility and highly leveraged transactions. In short, Soros is a speculator. The fundamentals of a prospective investment, while important at times, play a minor role in his decision-making.

In fact, in the early 1990s, Soros made a multi-billion dollar bet that the British pound would significantly depreciate in value over the course of a single day of trading. In essence, he was directly battling the British central banking system in its attempt to keep the pound artificially competitive in foreign exchange markets. Soros, of course, made a tidy $1 billion off the deal. As a result, we know him today as the man "who broke the bank of England."

The Bottom Line
Warren Buffett and George Soros are contemporary examples of the some of the most brilliant minds in the history of investing. While they employ markedly different investing strategies, both men have achieved great success. Investors can learn much from even a basic understanding of their investment strategies and techniques. 

http://www.investopedia.com/financial-edge/0912/buffet-vs.-soros-investment-strategies.aspx?utm_source=coattail-buffett&utm_medium=Email&utm_campaign=WBW-7/18/2013

If you know the true value of something, buy these only when they're on sale

The basic concept behind value investing is so simple that you might already do it on a regular basis. The idea is that if you know the true value of something you can save a lot of money if you only buy things when they're on sale. 

Buying stocks at bargain prices gives you a better chance at earning a profit later when you sell them. It also makes you less likely to lose money if the stock doesn't perform as you hope. This principle, called the margin of safety, is one of the keys to successful value investing. 

Unlike speculative stocks whose price can plummet, it is less probable that value stocks will continue to experience price declines. 

Value investors don't buy the most popular stocks of the day (because they're typically overpriced), but they are willing to invest in companies that aren't household names if the financials check out. They also take a second look at stocks that are household names when those stocks' prices have plummeted. Value investors believe companies that offer consumers valuable products and services can recover from setbacks if their fundamentals remain strong.

Value investors only care about a stock's intrinsic value. They think about buying a stock for what it actually is - a percentage of ownership in a company. They want to own companies that they know have sound principles and sound financials, regardless of what everyone else is saying or doing.

Value investing is a long-term strategy - it does not provide instant gratification. You can't expect to buy a stock for $66 on Tuesday and sell it for $100 on Thursday. In fact, you may have to wait years before your stock investments pay off. (The good news is that long-term capital gains are taxed at a lower rate than short-term investment gains.)

What's more, value investing is a bit of an art form - you can't simply use a value-investing formula to pick the right stocks which fit the desired criteria. Like all investment strategies, you must have the patience and diligence to stick with your investment philosophy even though you will occasionally lose money.

Also, sometimes you'll decide that you want to invest in a particular company because its fundamentals are sound, but you'll have to wait because it's overpriced. Think about when you go to the store to buy toilet paper: you might change your mind about which brand to buy based on which brand is on sale. Similarly, when you have money saved up to invest in stocks, you won't want to buy a stock just because it represents a share of ownership in your favorite company - you'll want to buy the stock that is most attractively priced at that moment. And if no stock is particularly well priced at the moment, you might have to sit on your hands and avoid buying anything. 

(Thankfully, stock purchases, unlike toilet paper purchases, can be postponed until the time is right.)

Construction stocks on my radar screen

Construction stocks on my radar screen

1.  Hock Seng Lee
2.  Mudajaya
3.  Pintaras Jaya



HSL

ROE 18.90%
EPS CAGR 5 Yrs 19.4%
DY High 2.1% - Low 1.3%
D/E 0.00
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 603.27 m
LFY Earnings 90.69 m
Gross Margin 21.51%
Market Cap RM 1177.01 m
Shares (m) 582.68
Per Share price RM 2.02
P/E 12.98


Mudajaya

ROE 21.28%
EPS CAGR 5 Yrs 47.8%
DY High 3.3% - Low 1.8%
D/E 0.00
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 1655.72 m
LFY Earnings 237.10 m
Gross Margin 16.35%
Market Cap RM 1485.04 m
Shares (m) 543.97
Per Share price RM 2.73
P/E 6.26


Pintaras Jaya

ROE 15.09%
EPS CAGR 5 Yrs 15.6%
DY High 8.1% - Low 5.7%
D/E 0.00
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 185.17 m
LFY Earnings 35.83 m
Gross Margin 29.18%
Market Cap RM 389.09 m
Shares (m) 80.06
Per Share price RM 4.86
P/E 10.86



DCA = durable competitive advantage

It’s More Difficult to Build a Successful Business than Own a Share of it

It’s More Difficult to Build a Successful Business than Own a Share of it

It doesn’t take a genius for you to know how hard it is to make a profitable business. Initially, businessmen work day and night. Their efforts are sometimes based on risks – trial and errors. Ultimately, if you already have an established business, the rewards are endless. What I want to reiterate is that starting your own business warrants substantial effort, money, time, common sense and great sacrifices.

Now, comparing the amount of hardships and risks it would take to build a corporation than buying a share of an already successful business, I know one thing. Imagine how easy it is to buy a stock of a profitable business in your country. Think about the comforts of not being required to be present in the company’s office every day; of not having the need to make reports or fix business problems that may arise. No long, boring meetings. No discussions with the boards. You stay in the comforts of your own home or office cashing in dividend cheques. Even that miniscule task can be taken care of if you’re using a pledged account.

http://www.intellecpoint.com/2013/07/the-real-deal-in-stock-investing.html

6 Rules From 6 Of The World's Top Investors

Investors don't agree on much, but they do agree that making money in the market comes with a steadfast strategy that is built around a set of rules. Think for a moment about your early days as an investor. If you're like many, you jumped in with very little knowledge of the markets. When you bought, you didn't even know what a spread was and you sold either too early if you saw a gain or too late if your stock dropped in value. If your only investing rule has been to not follow any rules, you're probably disappointed with your results so far. 

TUTORIAL: Advanced Financial Statement Analysis

If you don't have your own carefully crafted suite of investing rules, now is the time to do it and the best place to start is to ask the people who have had success in their investing careers. We not only found people who can claim success, we found six of the most successful investors in history. (So you've finally decided to start investing. But what should you put in your portfolio? Find out here. SeeHow To Pick A Stock.)

"Be patient with winning trades; be enormously impatient with losing trades. Remember it is quite possible to make large sums trading/investing if we are 'right' only 30% of the time, as long as our losses are small and our profits are large." – Dennis Gartman

Dennis Gartman began publishing The Gartman Letter in 1987. It is a daily commentary of global capital markets that is delivered to hedge funds, brokerage firms, mutual funds, and grain and trading firms around the world each morning. Mr. Gartman is also an accomplished trader and a frequent guest on financial networks.

His rule above addresses a wealth of mistakes that young investors make. First, let winning trades run. Don't sell at the first sign of profits. Second, don't let a losing trade get away. Investors who make money in the markets are OK with losing a little bit of money on a trade but they're not OK with losing a lot of money.

As Mr. Gartman points out, you don't have to be right a majority of the time. What is more important is to let a winning trade run and get out of a losing trade quickly. The money you make on the winning trades will far outpace the losing trades.

"It's Far Better to Buy a Wonderful Company at a Fair Price than a Fair Company at a Wonderful Price" – Warren Buffett

Warren Buffett is widely considered the most successful investor in history. Not only is he one of the richest men in the world but also has had the financial ear of numerous presidents and world leaders around the world. When Mr. Buffett talks, world markets move based on his words.

Mr. Buffett is also known as being a prolific teacher. His yearly letter to investors in his company,Berkshire Hathaway, is used in college finance classes in the largest and most prestigious universities.

Mr. Buffett gives two key pieces of advice to the investor: When evaluating a company, look at the quality of the company and the price. The quality of the company is most important and requires that you understand balance sheets, listen to conference calls and have confidence in the management. Only after you have confidence in the quality of the company should the price be evaluated. According to Mr. Buffett, if the quality of the company is high, don't expect to buy it at bargain bin prices. If the company isn't a quality company, don't buy it because the price is low. Bargain bin companies often produce bargain bin results. Sometimes good companies have bad stock and when you see that, dig deeper into your research. If the company still looks good, buy it. (To learn more, refer to What is Warren Buffett's Investing Style.) 

"Do you really like a particular stock? Put 10% or so of your portfolio on it. Make the idea count. Good [investment] ideas should not be diversified away into meaningless oblivion." – Bill Gross

Bill Gross is the co-chief investing officer of PIMCO and manages the PIMCO Total Return Fund, one of the largest bond funds in the world.

Mr. Gross' rule speaks about portfolio management. A universal rule that most young investors know is diversification or not putting all of your investing capital into one name. Diversification is a good rule of thumb but it also diminishes your profits when one of your picks makes a big move while other names don't. Making money in the market is also about taking chances based on exhaustive research. Always keep some cash in your account for those opportunities that need a little more capital and don't be afraid to act when you believe that your research is pointing to a real winner.

"We're getting hurt, but I'm a long-term investor"- Prince Alwaleed Bin Talal

You may have never heard of Prince Alwaleed Bin Talal, but he's well known in the investing world. An investor from Saudi Arabia, he founded the Kingdom Holding Company. If anybody had reason to panic, it is him. Prior to the Great Recession, he owned a 14.9% stake in Citigroup at a price much higher than its post-recession price. In addition to that, his real estate investments in India lost considerable value after the 2009 recession. 

When others may have sold, Prince Alwaleed Bin Talal has done what many of the best investors have done to amass their riches: Hold the stock for a long period of time, taking large market events out of the picture and collecting a dividend while they wait.
It's OK to trade stocks on a short or medium term basis, but the bulk of your portfolio should be invested in longer term holdings. 

"You learn in this business … If you want a friend, get a dog." – Carl Icahn

Carl Icahn is a private equity investor and modern day corporate raider, buying large stakes in companies and attempting to get voting rights to increase shareholder value. Some of his holdings have included Time Warner, Yahoo, Clorox and Blockbuster Video.

Mr. Icahn has made his fair share of enemies over the years, but investors shouldn't take his advice strictly in terms of interpersonal relationships. How many times in your investing past have you read an article, watched a news report or took a tip from a trusted friend about the next hot stock and lost money? (Hopefully you never acted on an unsolicited e-mail sent to you about a big-moving penny stock.) 

There is only one piece of advice to act upon: Your own exhaustive research based on facts (not opinions) obtained from trusted sources. Other advice can be considered and verified but it shouldn't be a sole reason to commit money.

"I am convinced that all this poverty in Mexico and in Latin America, like it's happening in China is the opportunity to grow. It's an opportunity for investment" –Carlos Slim

Another of the richest men in the world, Carlos Slim, owns hundreds of companies and has an employee base of more than 250,000. His quote above represents a mindset that the best investors possess. They don't look at what's happening now. By studying the momentum of a company or an entire economy and how it interacts with its competitors, great investors invest now for what will happen later. They are always forward thinking. If you're looking at now or trying to jump on the bandwagon of an investment that has already had short term gains, you've probably missed the big move. Try to find the next big winner but always anchor your portfolio with great companies that have a long track record of steady growth.
The Bottom Line
Now that you've read about one of each of these investors' rules, it's time to become a student of these investors and learn from their experiences. Each of these investors is known for being students of the markets, as well as leaders. As you begin to apply your new rules and commit to following them even when your mind tells you no, you'll see the profits start rolling in. Maybe you will make this list of legendary investors someday. (These five qualitative measures allow investors to draw conclusions about a corporation that are not apparent on the balance sheet. Check out Using Porter's 5 Forces To Analyze Stocks.)

https://mail.google.com/mail/u/0/#search/coatail+investor/13fcf24fdfc69349

"I finally had a profit, so I sold that investment."

There is nothing wrong with taking profits, but keep in mind that investors are constantly fearing regret and seeking pride. This is what is called the "disposition effect."

It is a result of the pain of an investment loss hurting much worse than the pleasure of a gain. Academic research has shown that investment losses hurt about two and a half times more than the positive feeling you get from an equivalent investment gain.

Net of taxes, whether you have a gain or a loss in an investment says absolutely nothing about its future prospects.

In a new bull market this bias causes investors to sell winners too early (seeking pride). Also, the painful regret associated with taking losses can keep investors from selling past bear market losers to buy new bull market leaders.

To help yourself avoid this bias, make sure that you have a process for buying and selling investments that is disciplined, fundamentally sound and repeatable. The bragging rights associated with quick gains are great, but the future profits you may miss could have been even better.

A practical analysis of dividend

A Practical Analysis Of Unilever Plc's Dividend

By Royston Wild | Fool.co.uk

The ability to calculate the reliability of dividends is absolutely crucial for investors, not only for evaluating the income generated from your portfolio, but also to avoid a share-price collapse from stocks where payouts are slashed.

There are a variety of ways to judge future dividends, and today I am looking at Unilever (NYSE: UL - news) to see whether the firm looks a safe bet to produce dependable payouts.

Forward dividend cover

Forward dividend cover is one of the most simple ways to evaluate future payouts, as the ratio reveals how many times the projected dividend per share is covered by earnings per share. It can be calculated using the following formula:

Forward earnings per share ÷ forward dividend per share

Unilever is expected to provide a dividend of 88.8p per share in 2013, according to City numbers, with earnings per share predicted to register at 139.1p. The widely-regarded safety benchmark for dividend cover is set at 2 times prospective earnings, but Unilever falls short of this measure at 1.6 times.

Free cash flow

Free cash flow is essentially how much cash has been generated after all costs and can often differ from reported profits. Theoretically, a company generating shedloads of cash is in a better position to reward stakeholders with plump dividends. The figure can be calculated by the following calculation:

Operating profit + depreciation & amortisation - tax - capital expenditure - working capital increase

Free cash flow increased to €5.14bn in 2012, up from €3.69bn in 2011. This was mainly helped by an upswing in operating profit -- this advanced to €7bn last year from ?6.43bn in 2011 -- and a vast improvement in working capital.

Financial gearing

This ratio is used to gauge the level debt a company carries. Simply put, the higher the amount, the more difficult it may be to generate lucrative dividends for shareholders. It can be calculated using the following calculation:

Short- and long-term debts + pension liabilities - cash & cash equivalents

___________________________________________________________            x 100

                                      Shareholder funds

Unilever's gearing ratio for 2012 came in at 56.6%, down from 59.5% in the previous 12 months. The firm was helped by a decline in net debt, to €7.36bn from €8.78bn, even though pension liabilities edged higher. Even a large decline in cash and cash equivalents, to €2.47bn from €3.48bn, failed to derail the year-on-year improvement.

Buybacks and other spare cash

Here, I'm looking at the amount of cash recently spent on share buybacks, repayments of debt and other activities that suggest the company may in future have more cash to spend on dividends.

Unilever does not currently operate a share repurchase programme, although it remains open to committing capital to expand its operations around the globe. Indeed, the company is attempting to ratchet onto excellent growth in developing regions as consumer spending in the West stagnates -- the firm saw emerging market sales rise 10.4% in quarter one versus a 1.9% fall in developed regions.

The firm remains dogged in its attempts to acquire a 75% stake in India's Hindustan Unilever (BSE: HUL.BO - news) , for example, and I expect further activity to materialise in the near future. Meanwhile, Unilever is looking to reduce its exposure to stagnating markets by divesting assets, exemplified by the recent sale of its US frozen foods business.

An appetising long-term pick

Unilever's projected dividend yield for 2013 is bang in line with the FTSE 100 (FTSE: ^FTSE - news) average of 3.3%. So for those seeking above-par dividend returns for the near-term, better prospects can be found elsewhere. Still, the above metrics suggest that the firm's financial position is solid enough to support continued annual dividend growth.

And I believe that Unilever is in a strong position to grow earnings strongly, and with it shareholder payouts, further out. Galloping trade in developing markets, helped by the strength of its brands -- the company currently boasts 14 '€1 billion brands' across the consumer goods and food sectors -- should significantly bolster sales growth and thus dividend potential in my opinion.

Tune in to hot stocks growth

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Our "Ten Steps To Making A Million In The Market" report highlights how fast-growth small-caps and beaten-down bargains are all fertile candidates to produce ten-fold returns. Click here to enjoy this exclusive 'wealth report' -- it's 100% free and comes with no obligation.

> Royston does not own shares in Unilever. The Motley Fool has recommended shares in Unilever.

http://uk.finance.yahoo.com/news/practical-analysis-unilever-plcs-dividend-090040474.html

Taking small steps out of cash

Generating the returns required for a longer retirement needn't mean a wholesale change of strategy, says Alex Hoctor-Duncan.

05 Jul 2013

There are three reasons why investors stay in cash: 
1.  they like the income, 
2.  they like the idea of their money being protected and 
3.  they worry about volatility. 
Investors also like the capital preservation that cash offers.

But there is inherent risk. Returns are low, so investors run the risk of seeing their purchasing power ravaged by inflation over the long term.

I sense that people are starting to recognise the limitations of cash. They feel they should look to make their money work harder, particularly as they are likely to be living longer.

However, what they want to achieve with their savings – a secure retirement with a good income – and what they are doing to achieve it, are not properly aligned. Simply saving in cash is not necessarily going to generate the returns required for a longer retirement.

This needn’t mean a wholesale change of strategy; it could be more about taking small steps out of cash, about consulting an IFA and revisiting their financial goals. It could mean looking again at how and where they invest – in the UK or internationally – and working with the adviser to set new objectives and plot the path towards those goals.

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• Identify investment goals 
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• Where best to put my money? 
  05 Jul 2013
• Financing the future: live long and prosper 
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If taking small steps is the path an investor chooses, the smart option is not to take all the money out of traditional cash or bond investments. Taking a portion of that money and looking for investments which provide an element of more flexible income could be one step that less risk-averse investors could take towards achieving their goals.

The earlier they take action the better, but it is never too late. However, wait 10 years and contribution levels might need to be double what they would have been.

Moving out of cash and safe haven investments in search of higher returns will involve accepting a greater risk of capital loss. You may get back less than you originally invested. Past performance is not necessarily a guide to future performance.

http://www.telegraph.co.uk/sponsored/finance/blackrock/10121192/blackrock-investment-strategy.html

Financing the future: live long and prosper. Plan for an extended future.

With the economic crisis leaving interest rates sitting below the level of inflation, independent financial advisers can help us change the way we look at savings.

For decades in the run-up to the financial crisis, most people took a safety-first approach to saving and investing for the long term.

And for good reason. Putting their savings into a deposit account or long-term savings bond offered the safest of traditional safe havens – they could relax, confident that their money would be secure and would grow.

But piling up cash in these once-safe havens is no longer the one-way bet that it used to be. The places we have long thought of as havens are rather less safe today than they used to be, for two main reasons.

The first is that as the financial world has shifted, so have the risks that we face. In the past, you could put your money on deposit at a bank or building society, or use it to buy super-safe government bonds, and be confident of earning a rate of interest that would allow your capital to grow faster than prices were rising. That enabled you to preserve the purchasing power of your money over the years while keeping it safe.

It might not grow as fast as it would if you had chosen other, riskier sorts of investment – but at least inflation wouldn’t erode the value of your nest egg.

Related Articles

• Small steps out of cash 
  05 Jul 2013
• Identify investment goals 
  05 Jul 2013
• Where best to put my money? 
  05 Jul 2013

But you can no longer rely on that old certainty. Savings rates on virtually all deposit accounts and yields on government bonds are stuck well below the rate of inflation, which changes the picture enormously. Prices are now rising faster than your savings can grow, which means that year by year your money can buy less – and therefore one of the main attractions of these traditional safe-haven investments has vanished.

The second big issue is that, for most of us, the long term is getting a lot longer than was the case for previous generations, with life expectancy rising rapidly. According to the Office for National Statistics, in 1981 a man of 65 could expect to live another 13.1 years. By 2009, this life expectancy had risen to 18 years. For women, the equivalent figures were 17 years in 1981 and 20.6 years by 2009.

The conclusion is obvious: longer life is nothing if not a blessing, but the money we salt away is going to have to work harder and support us through old age.

In a world where savings earn less than the rate of inflation and will have stretch further, sitting on cash looks a less viable option. By the same token, buying government bonds, even though they are backed by the Treasury’s promise to repay your capital in full, looks increasingly risky given that the yields they offer are also well below inflation.

For people who know they need to plan for an extended future – and one in which the easy answers do not work as well – this is a challenging time.

So over the coming weeks, the Telegraph will offer ways to reconsider long-term financial plans, bearing in mind the risks that inflation and miserly interest rates now pose to savings.

Many will want to take financial advice to help decide how to approach these issues, but will also want to feel confident that they know enough to have a proper conversation with their adviser.

This series will equip them to ask the right questions – what investments should they be considering to balance their need for growth with their appetite for risk? What are the merits of passive investing versus active management of their money? Should they be looking to international markets to help improve their returns? Where do they invest for the additional income they need?

For most people who are trying to build a fund for the long term but at the same time do not want to take on excessive risks, the answer to these problems is going to involve some combination of working longer, saving more and investing their money in different ways.

Inevitably, that means we are all going to have to accept rather more risk when investing for the long term. Therefore, a key element of the series will be to help people to dig deeper when they talk to their adviser and make sure that they understand the kinds of risk that go with the various investment options that are open to them.

The financial crisis and its after-effects have changed the rules of investing for many years to come. The old ways of doing things no longer represent a risk-free option – we need to take a different approach.

http://www.telegraph.co.uk/sponsored/finance/blackrock/10121155/future-finance-investments.html

Industrial stocks on my radar screen

Industrial Stocks on my radar screen
CBIP
Daibochi
Fima
Favelle Favco
Hartalega
Petgas
Scientex
Wellcall



CBIP

ROE 48.19%
EPS CAGR 5 Yrs 15.9%
DY High 7.0% - Low 4.7%
D/E 0.04
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 520.35 m
LFY Earnings 239.95 m
Gross Margin 86%
Market Cap RM 783.39 m
Shares (m) 272.01
Per Share price RM 2.88
P/E 3.26


Daibochi

ROE 16.38%
EPS CAGR 5 Yrs 23.2%
DY High 11.1% - Low 4.8%
D/E 0.20
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 278.75 m
LFY Earnings 24.64 m
Gross Margin 14.42%
Market Cap RM 413.28 m
Shares (m) 113.85
Per Share price RM 3.63
P/E 16.8


Favelle Favco

ROE 18.07%
EPS CAGR 5 Yrs 42.3%
DY High 5.2% - Low 2.9%
D/E 0.23
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 696.47 m
LFY Earnings 61.75 m
Gross Margin 17.08%
Market Cap RM 716.56 m
Shares (m) 212.00
Per Share price RM 3.38
P/E 11.60



FIMA

ROE 16.52%
EPS CAGR 5 Yrs 21.7%
DY High 5.5% - Low 3.7%
D/E 0.00
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 300.17 m
LFY Earnings 71.91 m
Gross Margin 45.69%
Market Cap RM 505.35 m
Shares (m) 80.47
Per Share price RM 6.280
P/E 7.03


Hartalega

ROE 32.51%
EPS CAGR 5 Yrs 40.5%
DY High 4.4% - Low 2.6%
D/E 0.04
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 931.07 m
LFY Earnings 201.38 m
Gross Margin 31.86%
Market Cap RM 4607.9 m
Shares (m) 732.58
Per Share price RM 6.29
P/E 22.9
DCA  Strong


Petgas

ROE 15.33%
EPS CAGR 5 Yrs 9.8%
DY High 4.2% - Low 2.9%
D/E 0.23
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 3576.77 m
LFY Earnings 1405.21 m
Gross Margin 49.49%
Market Cap RM 41,553.33 m
Shares (m) 1978.73
Per Share price RM 21.00
P/E 29.6
DCA  Strong


Scientex

ROE 15.96%
EPS CAGR 5 Yrs 16.2%
DY High 5.8% - Low 3.8%
D/E 0.11
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 881.03 m
LFY Earnings 83.92 m
Gross Margin 20.18%
Market Cap RM 1331.7 m
Shares (m) 230.00
Per Share price RM 5.790
P/E 15.9


Wellcall

ROE 28.82%
EPS CAGR 5 Yrs 9.2%
DY High 11.2% - Low 7.3%
D/E 0.00
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 154.19 m
LFY Earnings 23.34 m
Gross Margin 25.30%
Market Cap RM 316.87 m
Shares (m) 132.58
Per Share price RM 2.39
P/E 13.6


DCA = durable competitive advantage

Identify your investment goals. Gone are the days of 5pc to 10pc interests on cash accounts.

Gone are the days of 5pc to 10pc interest on cash accounts, so if people want this type of return they need to look elsewhere.

Since the Funding for Lending scheme came in, banks have not needed to attract money from savers. Today, just 14 accounts out of almost 900 pay rates that beat inflation.

With inflation seemingly settled between 2pc and 3pc for the time being, assuming 0.5pc interest on most savings, then £1,000 cash savings would be worth £905 after five years and £820 after 10. That’s quite a reduction in real spending power.

Related Articles

• Financing the future: live long and prosper 
  05 Jul 2013
• Small steps out of cash 
  05 Jul 2013
• Where best to put my money? 
  05 Jul 2013

Long-term investors who are wary that markets have risen so much and are thinking about how to limit any losses should markets fall again, could in turn consider a bond or absolute return fund.

The latter has had some bad press lately, but there are a number of funds which have done what they set out to do consistently over a decent period of time: namely, produced positive returns in all markets.

In a normal inflationary environment, bonds would be the asset class to suffer most as interest rates would rise. However, the new governor of the Bank of England has said he won’t be targeting inflation, but growth instead, so while inflation may rise further, interest rates will probably remain low for some time.

Investors could consider investing in assets that should do better when inflation is higher, such as equities and real assets such as commodities and property.

Start by identifying what your goals are – both short and long-term. Then think about how much you are willing to lose in the short term and how comfortable you are with seeing your investment go up and down.

http://www.telegraph.co.uk/sponsored/finance/blackrock/10121187/identify-investment-goals.html?WT.mc_id=605621&source=TrafficDriver

Maybank Research says Hua Yang is “hot”

Updated: Thursday July 11, 2013 MYT 2:26:55 PM

KUALA LUMPUR: Maybank Research is picking Hua Yang Berhad, a housing developer specialising in homes costing under RM500,000, as its “hot stock” pick with a target price of RM3.73 from its current trading price of around RM3.03.

It said on top of sound management and solid recent performance, Hua Yang was unlikely to be affected by the credit-tightening measures introduced by Bank Negara as it was in the affordable property segment. 

In fact, it stood to benefit from Budget 2013 due to improvements expected to be made to the My First Home Scheme.

Citing the Population and Housing Census Malaysia 2010 report, the research house pointed out that 25% of Malaysians purchasing property are first-time home buyers within the 25-40 age range. Hua Yang properties, particularly in Johor and Perak, are priced between RM100-400k a unit and 70% of its customers are first-time home buyers, and as such it was in a growth good position.  

To date, Hua Yang has completed more than 13,000 residential, commercial and industrial projects with a gross development value (GDV) of more than RM1.8bil. It is primarily focused in three main regions – Selangor, Johor and Perak, with projects such as One South in Selangor, Taman Pulai Indah/Hijauan in Johor and Bandar Universiti Seri Iskandar (BUSK) in Perak.

“Consensus estimates HYB to make a net profit of RM89.7mil in financial year ended March 2014, translating to a five-year earnings compound annual growth rate (CAGR) of 59%.  The stock is trading at a prospective CY14 PER of 5.6x, lower than its small/mid-cap peers’ average of 6.5x despite a superior return on equity (ROE) of 23%.

“It paid a dividend per share of 12 sen in the financial year ended March 2013 (33% net profit payout) and is expected to pay 14 sen dividend per share in the financial year ended March 2014, which translates to a net yield of 4.6%.

HYB has unbilled sales of MYR523m as at Mar 31, 2013 and plans to launch RM1bil worth of new projects in the financial year end March 2014, including six new projects in the Klang Valley, Johor and Perak. The group has 1,505 acres of landbank, of which 700 acres are undeveloped.  

It has a remaining GDV of RM4.05bil which should last the group another 10 years. Recent land acquisitions in Desa Pandan, Puchong, Seri Kembangan and Shah Alam will boost its GDV in the Klang Valley to 50%, with another 30% from Johor and 20% from Perak.

http://www.thestar.com.my/Business/Business-News/2013/07/11/Maybank-Research-says-Hua-Yang-is-hot.aspx

Linear income versus Passive income

It is important to realise that not all income is created equal.  Some streams are linear and some are passive.

Linear income is what you get from a job   You work for an hour and get paid once for that hour's work.

Passive income is when you work once and you continue to get paid from work that you're no longer doing.

The way to become wealthy is to have a steady flow of passive income which successful investors can attest to.

Initially, they work long hours, save up enough and then invest.

Later, their money starts working for them and gives them investment returns in the form of capital growth and rental returns.

Rather than getting another job, the wealthy people know they need to send their money out to work HARD for them.

A system for making money is something that takes the emotion out of your investment decisions and makes the results more reproducible.

Over the years, successful investors do things in a certain way that help them become rich while others continue to do things differently and in general, tend to struggle.

To get rich and how to make sure you do, do consider these six simple reasons:

1. Don't wait too long to start investing.
2. Don't let fear stops you from getting what you want, especially in terms of money.
3. Don't wait until you know enough or too much from getting started. 
4. Don't forget to focus on both linear and passive incomes.
5. Don't neglect developing and using systems for making money.
6. Don't be impatient. 

Adopted from an article:

Be a successful investor 

Published in Star Newspaper 9.7.2013

How to tell if you're rich? Who is “rich” and what is “fair"?

One of the biggest points of contention in the last election was whether the rich pay their fair share of taxes. Polls show the majority of voters don’t believe they do.

Of course, this begs the questions: Who is “rich” and what is “fair"?
 

Answers are largely a matter of opinion. But here is a fact: IRS figures show that the top 10% of income earners make 43% of all the income and pay 70% of all the taxes. Is that fair? If not, how much should they pay: 75% … 90% … all of it? And how about the now widely recognized fact — thanks to Mitt Romney’s secret videographer — that 47% of Americans don’t pay any income taxes. Is that fair? Opinions will vary.
 

According to the IRS, the top 2% of income earners — the ones who just had their marginal tax rate raised 13% to 39.6% — already pay approximately half of all income taxes. President Barack Obama says it’s about time these folks “chipped in.” What a kidder.
 

And who is “rich"? For today’s discussion, I’ll leave aside the truism that you are rich if you enjoy good health, a loving family, close friends and varied interests. Politicians (and most voters, apparently) seem to believe that a person’s wealth can be determined by his or her income. I would argue that you determine real wealth by looking at a balance sheet not an income statement. But why not look at both?
 

According to the Tax Policy Center, if your annual household income is $107,628, you are in the top 20% of income earners. If your income exceeds $148,687, you are in the top 10%. You are in the top 5% if it is $208,810. And if your household income is $521,411, congratulations. You are in the top 1% … and perhaps demonized by those who view hard work and risk-taking as a matter of good genes and good fortune.
 

However, net worth is a far better measure of wealth, in my view. According to the Federal Reserve Survey of Consumer Finances, a net worth of $415,700 puts you in the top 20% of American households. You are in the top 10% if your net worth is $952,200. (This jives with the findings of Dr. Thomas J. Stanley — author of The Millionaire Next Door — that one in eight American households has a net worth of $1 million or more.) If your nest egg totals $1,863,800, you are in the top 5%. And — trumpets please – if you have a household net worth of $6,816,200, you are again in the top 1% … and possibly frowned upon by redistributionists who resent folks who live beneath their means, save regularly and handle their financial affairs prudently.
 

How do you get rich if you aren’t currently? The basic formula is pretty simple: Maximize your income (by upgrading your education or job skills). Minimize your outgo (by living beneath your means). Religiously save the difference. (Easier said than done.) And follow proven investment principles. (Which we write about here every week.)
 

Most millionaires — folks with liquid assets of one million dollars or more – are not big spenders. Quite the opposite, in fact.
 

According to extensive surveys by Stanley, the most productive accumulators of wealth spend far less than they can afford on homes, cars, clothing, vacations, food, beverages and entertainment.
 

On the other hand, the wanna-be’s (people with higher-than-average incomes but not much net worth), are merely “aspirational.” They buy expensive clothes, top-shelf wines and liquors, luxury cars, powerboats, all kinds of bling and, often, more house than they can comfortably afford. Their problem, in essence, is that they’re trying to look rich. This prevents them from ever becoming rich.
 

It surprises many, but the vast majority of millionaires in the United States:

• Live in a house that costs less than $400,000.

• Are more likely to wear a Timex than a Rolex.
• Generally pay $15 or less for a bottle of wine.

• Have never paid more than $400 for a suit.
• Are more likely to drive a Nissan than a BMW.

• Spend very little on prestige brands and luxury items.

Yes, they’re frugal. But they’re also happy, not to mention financially free. They are not dependent on their families, their employers or the federal government. What a feeling.
 

Some can’t abide by this important lesson but the bottom line is clear: If you want to be rich, you have to stop acting rich… and start living like a real millionaire.

Alexander Green is the chief investment strategist at InvestmentU.com. See more articles by Alexander here.

- See more at: http://www.hcplive.com/physicians-money-digest/personal-finance/How-to-Tell-if-Youre-Rich-IU#sthash.edqDi0sq.dpuf