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Value Investing Principles
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CharmaineLim
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01-Apr-2007 16:18
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thks a lot, livermore, donkey, victorian and ongjeremiah... |
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Livermore
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01-Apr-2007 13:46
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Benjamin Graham's formula The intrinsic value of a stock equals = E(2R+8.5) x 4.4/Y E : Company's earnings per share R : Its expected earnings growth rate Y: Current yield on AAA rated corporate bonds |
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donkey
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01-Apr-2007 13:03
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The formulae is under the topic "Trading Techniques". |
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ongjeremiah
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31-Mar-2007 20:59
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Hi Charmaine, There are various methods used to calculate intrinsic value of a stock. One of the most widely used method is discounted cash-flow valuation (DCF) method. However, perhaps it'll not be ideal to highlight the method here as you can find out from any good finance book on how to derive the method. Nevertheless it's good to hear an interest in fundamental analysis, as this forum seems to be awash with TA. |
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CharmaineLim
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29-Mar-2007 11:17
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hi all, any body knows how to calculate the intrinic value of a stock price. thks |
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musicwhiz5
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12-Mar-2007 00:39
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OK, will keep this post short as I need to turn in soon lol ! Cityspring and MIIF are different fro REITs in that they invest in infrastructure assets. These are generally immovable structures such as oil storage tanks, airports, roads etc and are not necessarily related to properties. However, they also generate recurring income through revenues collected and this provides a steady income stream. However, my opinion is that such trusts would find it harder to acquire similar assets as these are usually government owned or they may not be yield accretive enough to justify acquiring. |
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musicwhiz5
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12-Mar-2007 00:25
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Well, for people with shorter time horizons, they are more pre-disposed to invest in companies with stable growth (not high growth) and mature products/services. Such companies may not experience a sharp increase in earnings but can instead give steady and consistent dividends because of steady and dependable cash flows. A REIT is simply an example of such an investment which can give steady and consistent dividends. This is of course, assuming that you buy a REIT when its yield is sufficiently high. Any yield which is better than fixed deposit yield would be considered decent. One thing to note is that capital losses on REITs (if bought at an inflated price) may erode dividend gains over the years. Thus, it is still important to review the yield of a REIT and its potential property portfolio, and to see if the Manager has plans to acquire more yield-accretive properties in future. I hope that answers the query ? Have a good week ! |
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musicwhiz5
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11-Mar-2007 23:58
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Hi all, Looks like this forum is starting to look like a margin trading information sharing session rather than about value investing lol ! I see a lot of terms like consolidation and breakout which are characteristic of TA and charts. No offense to the TA people but perhaps the TA can be analyzed in a separate thread ? I have seen many threads with good discussions on TA as well as margin trading. To carry on the sharing session, my second mistake was Yellow Pages where I bought in at about $1.81 and sold out at $1.64. The fact was that I was also hoping for a good dividend as well as earnings increased but the fact was that Yellow Pages was in a "sunset" industry and had no way to expand their Yellow Pages business except to go online. Even then, not many people actually use Online Yellow Pages so this was not a viable source of long-term income. Understandably, as the business suffered from a lack of long-term earnings potential, the share price correspondingly reflected this as well. After reviewing the prospects of the company and its potential, I decided to cut losses. Another mistake learnt and I am very happy to admit I have not yet repeated this mistake of buying a company with limited growth potential. Also, be wary of companies who paint over-rosy pictures of strong growth but are unable to deliver the goods. Most CEOs will spend time talking up their companies and giving a very bullish outlook but in reality, it may be far from rosy. That is why I say numbers don't lie; analyze the margins, inventory levels, debtors turnover, cash conversion cycle, usage of cash and read ALL the notes to the accounts. It's amazing the amount of insights which can be gained from this simple activity. Try it and see....this is one step closer towards analyzing a company in order to assess if it makes a good long-term investment. |
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Livermore
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11-Mar-2007 22:06
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HDD stocks are now in consolidation phse. The sector could be set for recovery. Maybe look at Jurong Tech at 97c. |
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Livermore
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11-Mar-2007 20:27
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Hi Ed88ks, To me in investment and like other things in life, I always feel one has to evaluate things and then decide. It is ok to hear both positive and negative things about margin trading. Sometimes it is better to learn from other's mistakes then learn mistakes on your own. It can be very painful to learn from one's own mistakes. Anyway that is what this whole forum is about. To share and learn. If 10 people say margin trading should not be used and 1 say it is ok, it does not neccesarily mean margin trading is bad. Just like reading analyst reports. Read them with an open mind. Dont totally follow them blindly and also don't totally disregard them. Look at both sides of any issues but at the end of the day, evaluate on your own and decide. |
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Livermore
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11-Mar-2007 19:25
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Hi Victorian & Ed88ks, Hey thanks for sharing:). Yes, Ed88ks, you have to be very discipline if you wish to trade in margin. When you are in profit, it is easy to get carried away. That's why I don't like to buy too many stocks as I can get carried away..I only have 2 stocks and 1 warrant now. Keep track of your paper profit and don't over commit. Give you an example. If you have $10k paper profit from share C but you are sitting on about 50 lots in share A and 50 lots in another share B. Let's say both share A and B are at near break even price. To me that is a quite a risky position to be in. You are quite over exposed. One market crash and all is wiped out. Manage your risk profile well and margin trading is ok. |
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ed88ks
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11-Mar-2007 17:49
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wow thanks for the fast response Livermore, but this is something i fear to go into , as i feel one may develop a habit. and lost control from the easy access of capital? but i think if use productively, it give us a wider exposure?, i wonder did tan boon long use margin in his visual game at ntu? |
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Livermore
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11-Mar-2007 17:43
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Hi Ed88ks, Pick those fundamentally good stocks that has been consolidating for a long time. Take for example ASL Marine when margin trade could have taken off but it did not. I averaged up ASL Marine with the following buys : 90c (10 lots), 93.5c (15 lots), 99c (10 lots), $1.01(10 lots). Total - 45 lots. At $1.01 , I thought ASL Marine was going to "take off", but it went back to 95c. So I decided to get rid of 25 lots at 95c. In that way I have profit from those lots I bought earlier. The 25 lots I sold is meant for "cover" in case the share price drops even further. Some people hold and decide to buy more if the price goes below 90c. Yes, you can do that but what if the price does not rebound, and goes all the way to 80c? So I go for safety first. I discipline myself in sticking to the lots I had initially and don't add more after I have established my buys and the price come down (this is different from the initial buy phase when I do average down a bit). But if the share price had taken off from $1, I would have used margin and bought more at say $1.05 or $1.10. Why? Because my earlier lots are all in profit. |
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Livermore
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11-Mar-2007 17:35
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As I mentioned before if none of my share breaks out, I am not in margin at all. I just wait....... |
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Livermore
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11-Mar-2007 17:32
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Hi ed88ks, Refer to my earlier posts on how I trade in margin. I gave 2 case scenarios. I only use margin when my share breaks out of consolidation phase and is headed higher. It is not complicated. After it heads higher, maybe you can make just 1 more buy and then don't buy any more and just let it ride up...... Only margin trade when your stock is header higher NOT when your share price is header lower. When it is headed lower maybe just buy only 5 lots with wide price difference...... |
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ed88ks
Senior |
11-Mar-2007 16:27
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i am interested in margin trade, anyone here can advice as when is the right time to exercise it, i believe it should only be use with caution? |
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adrianpang05
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11-Mar-2007 16:16
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Yo Vic and Geojam, thank you both for your advices. Really appreciate it. What Geojam suggested is something worth considering. Actually I'm quite a bit of a kiasu fella (remember $120k! haha) so no I'd just know such a mechanism exists but won't be making use of it. I pay for all my trades cash upfront, no contra, no margin..............no worries. Haha Besides all my counters are on strong FA basis. |
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Livermore
Master |
11-Mar-2007 15:00
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10% is a bit high. But I would still consider to margin trade with that interest |
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geojam
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11-Mar-2007 14:44
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livermore The 10% is charged here in australia. In spore the loan interest is 6%. |
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Livermore
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11-Mar-2007 12:34
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Hi Geojam, My margin interest is 6.5% per annum |
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