What is Value Investing? Part 4

April 29, 2007

What are the criteria in choosing a public listed company to invest in?These criteria is obtained from the book,”The New Buffetology” which is written by Mary Buffet.I will explain how can you apply those criteria in KLSE.Some criteria might not be suitable and need some modifications.

The first criteria is the EPS pattern over a decade.By observing the EPS pattern for the past 8 to 10 years,an investor will be able to get a sense of a company’s sustainability and reliability in its industry. You should chart the EPS in Excel as linear graph, and observe its EPS fluctuation and direction.If the fluctuation of the EPS is little and the trend is upward,then you are looking at a stable company.You can only predict the future of a company which has shown stable growth over the 10 years.Small fluctuation of EPS is acceptable.

Erase all the companies which does not have …(continue)


What is Value Investing? Part 3

April 24, 2007

Given all the problems in KLSE,how should one invest? Some investors prefer short term investing/speculative investment such as options and warrant. In speculators’ opinion,short term investment is not affected by corruption and political decisions. This is true.But how many of us are professional traders?How many of us have a CFA?

CONSERVATIVE analysis couple with long term investment can also reduce the effect of inappropriate decision by the company.When one has made profit in the stock market,he should ‘lock’ his profit in bond.The proportion of portfolio should be ….(continue)

What Is Value Investing? Part 2

April 1, 2007

How to apply value investing in KLSE? This is a bit more complicated task. Here are some of the reasons. Some of the companies in KLSE are politically driven. These companies might not make a decision which benefits its shareholders. Also. Malaysia ranked badly in corruption list.I will leave that topic to other bloggers.

A company fundamental might look alright but …continue

What Is Value Investing? Part 1

March 28, 2007

Value Investing is simply buying an investment below its intrinsic value.The problem is calculating its intrinsic value. To arrive at the intrinsic value,an investor needs to predict future earnings of the investment,sum up all the earnings,and bring it back to the present value.Learn from Graham and Warren Buffet.

If you don’t understand what I’m saying,then get a book written by Mary Buffet,and read it before you come back to this blog.For those who understand me,stay with me.I will introduce value investing step by step. 

An investor must buy into an investment with a proper safety margin corresponding to the risk level of the investment. The risk level ….(continue)