Recently, I again asked the question of when should Value Investors sell a stock. Based on my research, i found out that the reason why Value Investors sell their stock is very closely tied into the reason of why they buy the stock in the first place. The key reasons why a Value Investor would buy a stock is because of the combination of these 2 reasons: 1) The business …
Read MoreWhy Inflation needs to be factored when assessing the Value of a Business
There are some fabulous stocks in the stock market that is very stable, but is no longer growing. So can we still assess the value? Let me give you an example. Say we are assessing a chicken rice business in a mature estate in Singapore. The chicken rice shop has regular customers in that estate so its net revenue (or sales of food) is very steady, but there is no …
Read MoreBegin Your Search for Great Investment Ideas with this List
In my Stock Investment Class (Value Investing Academy), the question of “Where do i even begin?” will inevitably pop out of the participants’ mouth. I think that that is a very valid question. While I had shared a couple of ways to get started, I will always point back to the fact that we fist need to define our circle of competence, i.e. we should clearly define what we understand …
Read MoreLessons Learnt From Mary Buffett in Los Angeles
When I began my journey as a Value Investor, I started by reading books to acquire the proper knowledge. One of the best author in my opinion is none other than Mary Buffett. Her books were not only inspiring as she shares the story of Warren Buffett, it was practical and applicable. While there are many other good books I enjoyed, I would find myself not being able to implement …
Read MoreLets put our money with the banks!
I was giving a ride to a friend some time back when he asked me , “Isn’t it risky to invest?” Aha! If you are a friend of mine, you know that whenever the topic of investment pops up, it will turn into a seminar. And unfortunately for my friend, he is a captive audience with no place to run. “Where should you put your money then?” i asked. “Well, …
Read MoreThe truth about Stock Investing!
Let me start by asking you a riddle. An antique collector was having tea with his good friend who is the boss of an antique shop when a businessman approached them excitedly to show off his latest collection. It was a valuable ancient coin. “It is a treasure!” The businessman exclaimed. The antique collector and the boss carefully took over the coin and saw that it was made in pure …
Read MoreWhen a Company Buys back Shares (Repurchase)…
In this post, we will explore into a earnings management strategy that some businesses adopt. When a business earns profit, there are 3 main things it can do to the amount of cash it made. 1. Give out as dividends 2. Keep as retained earnings 3. Buy back shares Lets look into the effect of each of them for shareholders and see when each of them makes sense. …
Read MoreThe One idea that made Value Investors successful investors… Part 2
This is a follow up from the previous post: https://www.investment-in-stocks.com/investment-in-stocks/the-one-idea-that-made-value-investors-successful-investors-part-1 Moving on, we will use a real life example to calculate the Intrinsic Value of a Stock and will add in more real life variables using this example. Example of Calculating Intrinsic Value of Walmart (WMT) First of all, we will take a look at the past 10 years record of Walmart. To project Walmart’s future earnings, we will take …
Read MoreThe One idea that made Value Investors successful investors… Part 1
Many years ago, Benjamin Graham (teacher of Warren Buffett) coined the term Value Investing, the methodology for profiting from the stock market was very speculative and based on guessing the direction of the market. But after Benjamin Graham created ONE special idea, Value Investing was born. What is that one special idea that gave birth to Value Investing? The idea is that each stock has a numerical Value, which is …
Read MoreAnalyzing a Stock’s Economic Moat using STEP Analysis (Part 2)
We will continue our discussion using STEP analysis to determine if a stock has an Economic Moat that can survive different aspects of a market. This is a follow up from the last post. https://www.investment-in-stocks.com/investment-in-stocks/analyzing-a-stocks-economic-moat-using-step-analysis-part-1 In our previous post, we have discussed the first 2 factors of STEP, namely Social Cultural and Technological. This post we will look at asking questions regarding Economic and Political Factors.
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