Value Stock Investing

Rich Dad Poor Dad eBook Giveaway

2014-04-07T21:18:00.000-07:00

Rich Dad Poor Dad by Robert Kiyosaki is one of the most read books on Personal Finance & Investing. It has sold millions as New York Times Bestseller. Despite its popularity, there are still people out there who have not read it or who had read it but has not practiced the concepts presented in the books (including me!).

Anyone stuck in the rat-race of living paycheck to paycheck, enslaved by the house mortgage and bills, will appreciate this breath of fresh air.Learn about the methods that have created more than a few millionaires.

Currently the ebook version can be downloaded for free. Readers can go to this link http://ow.ly/vwWFV. However registration is needed to download this free ebook.

For readers of this blog, you can save your trouble by downloading the eBook here. Enjoy reading and may everyone benefit from it!

How to Buy Dollar Bills for 50 Cents - Mark Boyar

2014-04-06T07:09:00.000-07:00

Barrons did an interview with Mark Boyar in August last year. Mark Boyar runs a mutual fund, Boyar Value, that has beaten the S&P500 over the last 5 years. He approaches investing with mentality of buying dollar bills for 50 cents. Besides running a mutual fund, Mark also publishes investment research called Boyar Intrinsic Value which include an annual list of undervalued stocks called the Forgotten Forty. Stocks included in Forgotten Forty include Hannesbrands (HBI) and Liberty Media (LMCA). In the interview, Mark lists his current favourite stocks ideas that include Weight Watchers (WTW) that has decline 75% from its high to $21, Scotts Miracle-Gro (SMG) and Bank of America (BAC) which he thinks is worth $28.

To read the interview, click here

What Investment Books Investor bought in March 2014

2014-04-05T21:44:00.002-07:00

As part of investor education, we need to constantly upgrade our knowledge by either reading blog posts, famed value investors's valuation of their stock picks or books on investing. This is a post of the top 20 investment and business books bought in Amazon by readers worldwide the last month. At the top is Michael Lewis’ newbook Flash Boys which made a splash at the top of leaderboard.

Flash Boys: A Wall Street Revolt by Michael Lewis
Global Value: How to Spot Bubbles, Avoid Market Crashes, and Earn Big Returns in the Stock Market byMebane Faber
The Little Book of Market Wizards: Lessons from the Greatest Traders by Jack Schwager
Capital in the Twenty-First Century by Thomas Piketty
The Investor’s Paradox: The Power of Simplicity in a World of Overwhelming Choice by Brian Portnoy
The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers by Ben Horowitz
The Up Side of Down: Why Failing Well Is the Key to Success by Megan McArdle
Thinking Fast and Slow by Daniel Kahneman
Trading Options: Using Technical Analysis to Design Winning Trades by Greg Harmon
Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere by Tadas Viskanta
Manage Your Day-to-Day: Build Your Routine, Find Your Focus, and Sharpen Your Creative Mind byJocelyn Gleil
The Investment Checklist: The Art of In-Depth Research by Michael Shearn
Click here for a talk given by Michael Shearn
The Manual of Ideas: The Proven Framework for Finding the Best Value Investments by John Mihaljevic
Young Money: Inside the Hidden World of Wall Street’s Post-Crash Recruits by Kevin Roose
Skating Where the Puck Was: The Correlation Game in a Flat World by William J. Bernstein
Investing Demystified: How to Invest Without Speculation and Sleepless Nights by Lars Kroijer
Keynes’s Way to Wealth: Timeless Investment Lessons from The Great Economist by John Wasik
Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America by Andrew Yang
The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike - Recommended by Warren Buffett
The Safe Investor: How to Make Your Money Grow in a Volatile Global Economy by Tim McCarthy

Singapore Stocks - Bargain Hunting

2014-04-05T06:02:00.001-07:00

After a dramatic plunge below 3,000 points in February, the benchmark Straits Times Index has since recovered to close above. Yet a good many stocks remain undervalued or underowned. In this post, we will highlight 2 stocks – CWT and CSE Global.

CWT

CWT has 2 main business segments, logistics and Commodity SCM business. CWT is trading at 6.4x FY14F PER, representing a steep discount to its peers (average 16.7x). CWT has traded down from its 52 week high of $1.83 due to over-estimation of risks in Commodity SCM and lack of clarity on earnings growth ahead. The volatility in earnings due to its commodity related business has caused investors to reduced ownership of the stock. However the Commodity SCM business is less risky than perceived as CWT fully hedges prices in its Commodity SCM business, rendering the trades back-to-back and eliminating risk of losses through adverse price movements. Also, its main logistics business is expected to grow at 16% with the addition of redeveloped Jurong East Logistics Centre, Cold Hub 2 and Pandan Logistics Centre.

CSE Global

CSE Global is another stock that has underperformed the STI but have paid dividends over the last 12 months. CSE’s FY13 bottomline took a hit as it made provisions for project cost overruns amounting to S$8.1m. Following the successful divestment of CSE Global’s entire shareholding interest in Servelec Group in Dec last year, the company can now focus on driving its growth largely from the oil and gas sector. CSE has significant exposure to the Gulf of Mexico and the company is expected to benefit from the on-going recovery following the ill-fated Macondo oil spill incident and the imminent liberalisation of the Mexican oil and gas market.

Beside these 2 stocks, investors can also screen stocks that are undervalued by a few parameters such as positive free cash flow, a high dividend yield, low debt to equity ratio. The Edge Magazine in a February article did a screening of Singapore stocks that have underperformed the STI. pay a dividend, generate free cash flow and are in a net cash position. The screen produces stocks such as Chosen Holdings, Civmec, Keong Hong Holdings, F&N, Smartflex Holdings and TTJ Holdings

Michael Shearn - The Investment Checklist

2014-04-04T23:41:00.001-07:00

I recently watched this lecture given by Michael Shearn. Michael Shearn is the Managing Partner of the Time Value of Money Fund based in Austin, Texas. He is also the author of The Investment Checklist: The Art of In-Depth Research. In the video, he shared secrets on the investment checklist as well as things to look out for when analysing an investment opportunity. His research prowess commands an audience with the likes of Warren Buffett, Charlie Munger and top hedge fund managers.

A Sneak Peek at Warren Buffett's Annual Letter - What You Can Learn from My Real Estate Investments

2014-02-24T17:59:00.000-08:00

"Investment is most intelligent when it is most businesslike." -- Benjamin Graham, The Intelligent Investor

It is fitting to have a Ben Graham quote open this essay because I owe so much of what I know about investing to him. I will talk more about Ben a bit later, and I will even sooner talk about common stocks. But let me first tell you about two small nonstock investments that I made long ago. Though neither changed my net worth by much, they are instructive.

This tale begins in Nebraska. From 1973 to 1981, the Midwest experienced an explosion in farm prices, caused by a widespread belief that runaway inflation was coming and fueled by the lending policies of small rural banks. Then the bubble burst, bringing price declines of 50% or more that devastated both leveraged farmers and their lenders. Five times as many Iowa and Nebraska banks failed in that bubble's aftermath as in our recent Great Recession.

In 1986, I purchased a 400-acre farm, located 50 miles north of Omaha, from the FDIC. It cost me $280,000, considerably less than what a failed bank had lent against the farm a few years earlier. I knew nothing about operating a farm. But I have a son who loves farming, and I learned from him both how many bushels of corn and soybeans the farm would produce and what the operating expenses would be. From these estimates, I calculated the normalized return from the farm to then be about 10%. I also thought it was likely that productivity would improve over time and that crop prices would move higher as well. Both expectations proved out.

I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside. There would, of course, be the occasional bad crop, and prices would sometimes disappoint. But so what? There would be some unusually good years as well, and I would never be under any pressure to sell the property. Now, 28 years later, the farm has tripled its earnings and is worth five times or more what I paid. I still know nothing about farming and recently made just my second visit to the farm.

In 1993, I made another small investment. Larry Silverstein, Salomon's landlord when I was the company's CEO, told me about a New York retail property adjacent to New York University that the Resolution Trust Corp. was selling. Again, a bubble had popped -- this one involving commercial real estate -- and the RTC had been created to dispose of the assets of failed savings institutions whose optimistic lending practices had fueled the folly.

Here, too, the analysis was simple. As had been the case with the farm, the unleveraged current yield from the property was about 10%. But the property had been undermanaged by the RTC, and its income would increase when several vacant stores were leased. Even more important, the largest tenant -- who occupied around 20% of the project's space -- was paying rent of about $5 per foot, whereas other tenants averaged $70. The expiration of this bargain lease in nine years was certain to provide a major boost to earnings. The property's location was also superb: NYU wasn't going anywhere.

More: Searching for Bargains from Warren Buffett's Portfolio

I joined a small group -- including Larry and my friend Fred Rose -- in purchasing the building. Fred was an experienced, high-grade real estate investor who, with his family, would manage the property. And manage it they did. As old leases expired, earnings tripled. Annual distributions now exceed 35% of our initial equity investment. Moreover, our original mortgage was refinanced in 1996 and again in 1999, moves that allowed several special distributions totaling more than 150% of what we had invested. I've yet to view the property.

Income from both the farm and the NYU real estate will probably increase in decades to come. Though the gains won't be dramatic, the two investments will be solid and satisfactory holdings for my lifetime and, subsequently, for my children and grandchildren.

I tell these tales to illustrate certain fundamentals of investing:

You don't need to be an expert in order to achieve satisfactory investment returns. But if you aren't, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don't swing for the fences. When promised quick profits, respond with a quick "no."

Focus on the future productivity of the asset you are considering. If you don't feel comfortable making a rough estimate of the asset's future earnings, just forget it and move on. No one has the ability to evaluate every investment possibility. But omniscience isn't necessary; you only need to understand the actions you undertake.

If you instead focus on the prospective price change of a contemplated purchase, you are speculating. There is nothing improper about that. I know, however, that I am unable to speculate successfully, and I am skeptical of those who claim sustained success at doing so. Half of all coin-flippers will win their first toss; none of those winners has an expectation of profit if he continues to play the game. And the fact that a given asset has appreciated in the recent past is never a reason to buy it.

With my two small investments, I thought only of what the properties would produce and cared not at all about their daily valuations. Games are won by players who focus on the playing field -- not by those whose eyes are glued to the scoreboard. If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays.

Forming macro opinions or listening to the macro or market predictions of others is a waste of time. Indeed, it is dangerous because it may blur your vision of the facts that are truly important. (When I hear TV commentators glibly opine on what the market will do next, I am reminded of Mickey Mantle's scathing comment: "You don't know how easy this game is until you get into that broadcasting booth.")

My two purchases were made in 1986 and 1993. What the economy, interest rates, or the stock market might do in the years immediately following -- 1987 and 1994 -- was of no importance to me in determining the success of those investments. I can't remember what the headlines or pundits were saying at the time. Whatever the chatter, corn would keep growing in Nebraska and students would flock to NYU.

There is one major difference between my two small investments and an investment in stocks. Stocks provide you minute-to-minute valuations for your holdings, whereas I have yet to see a quotation for either my farm or the New York real estate.

It should be an enormous advantage for investors in stocks to have those wildly fluctuating valuations placed on their holdings -- and for some investors, it is. After all, if a moody fellow with a farm bordering my property yelled out a price every day to me at which he would either buy my farm or sell me his -- and those prices varied widely over short periods of time depending on his mental state -- how in the world could I be other than benefited by his erratic behavior? If his daily shout-out was ridiculously low, and I had some spare cash, I would buy his farm. If the number he yelled was absurdly high, I could either sell to him or just go on farming.

Owners of stocks, however, too often let the capricious and irrational behavior of their fellow owners cause them to behave irrationally as well. Because there is so much chatter about markets, the economy, interest rates, price behavior of stocks, etc., some investors believe it is important to listen to pundits -- and, worse yet, important to consider acting upon their comments.

Those people who can sit quietly for decades when they own a farm or apartment house too often become frenetic when they are exposed to a stream of stock quotations and accompanying commentators delivering an implied message of "Don't just sit there -- do something." For these investors, liquidity is transformed from the unqualified benefit it should be to a curse.

A "flash crash" or some other extreme market fluctuation can't hurt an investor any more than an erratic and mouthy neighbor can hurt my farm investment. Indeed, tumbling markets can be helpful to the true investor if he has cash available when prices get far out of line with values. A climate of fear is your friend when investing; a euphoric world is your enemy.

During the extraordinary financial panic that occurred late in 2008, I never gave a thought to selling my farm or New York real estate, even though a severe recession was clearly brewing. And if I had owned 100% of a solid business with good long-term prospects, it would have been foolish for me to even consider dumping it. So why would I have sold my stocks that were small participations in wonderful businesses? True, any one of them might eventually disappoint, but as a group they were certain to do well. Could anyone really believe the earth was going to swallow up the incredible productive assets and unlimited human ingenuity existing in America?

When Charlie Munger and I buy stocks -- which we think of as small portions of businesses -- our analysis is very similar to that which we use in buying entire businesses. We first have to decide whether we can sensibly estimate an earnings range for five years out or more. If the answer is yes, we will buy the stock (or business) if it sells at a reasonable price in relation to the bottom boundary of our estimate. If, however, we lack the ability to estimate future earnings -- which is usually the case -- we simply move on to other prospects. In the 54 years we have worked together, we have never forgone an attractive purchase because of the macro or political environment, or the views of other people. In fact, these subjects never come up when we make decisions.

It's vital, however, that we recognize the perimeter of our "circle of competence" and stay well inside of it. Even then, we will make some mistakes, both with stocks and businesses. But they will not be the disasters that occur, for example, when a long-rising market induces purchases that are based on anticipated price behavior and a desire to be where the action is.

More: What Warren Buffett Can Teach Us About Position Sizing

Most investors, of course, have not made the study of business prospects a priority in their lives. If wise, they will conclude that they do not know enough about specific businesses to predict their future earning power.

I have good news for these nonprofessionals: The typical investor doesn't need this skill. In aggregate, American business has done wonderfully over time and will continue to do so (though, most assuredly, in unpredictable fits and starts). In the 20th century, the Dow Jones industrial index advanced from 66 to 11,497, paying a rising stream of dividends to boot. The 21st century will witness further gains, almost certain to be substantial. The goal of the nonprofessional should not be to pick winners -- neither he nor his "helpers" can do that -- but should rather be to own a cross section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.

That's the "what" of investing for the nonprofessional. The "when" is also important. The main danger is that the timid or beginning investor will enter the market at a time of extreme exuberance and then become disillusioned when paper losses occur. (Remember the late Barton Biggs's observation: "A bull market is like sex. It feels best just before it ends.") The antidote to that kind of mistiming is for an investor to accumulate shares over a long period and never sell when the news is bad and stocks are well off their highs. Following those rules, the "know-nothing" investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results. Indeed, the unsophisticated investor who is realistic about his shortcomings is likely to obtain better long-term results than the knowledgeable professional who is blind to even a single weakness.

If "investors" frenetically bought and sold farmland to one another, neither the yields nor the prices of their crops would be increased. The only consequence of such behavior would be decreases in the overall earnings realized by the farm-owning population because of the substantial costs it would incur as it sought advice and switched properties.

Nevertheless, both individuals and institutions will constantly be urged to be active by those who profit from giving advice or effecting transactions. The resulting frictional costs can be huge and, for investors in aggregate, devoid of benefit. So ignore the chatter, keep your costs minimal, and invest in stocks as you would in a farm.

My money, I should add, is where my mouth is: What I advise here is essentially identical to certain instructions I've laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife's benefit. (I have to use cash for individual bequests, because all of my Berkshire Hathaway (BRKA) shares will be fully distributed to certain philanthropic organizations over the 10 years following the closing of my estate.) My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's. (VFINX)) I believe the trust's long-term results from this policy will be superior to those attained by most investors -- whether pension funds, institutions, or individuals -- who employ high-fee managers.

And now back to Ben Graham. I learned most of the thoughts in this investment discussion from Ben's book The Intelligent Investor, which I bought in 1949. My financial life changed with that purchase.

Before reading Ben's book, I had wandered around the investing landscape, devouring everything written on the subject. Much of what I read fascinated me: I tried my hand at charting and at using market indicia to predict stock movements. I sat in brokerage offices watching the tape roll by, and I listened to commentators. All of this was fun, but I couldn't shake the feeling that I wasn't getting anywhere.

More: Top 10 investment books for Superinvestors

In contrast, Ben's ideas were explained logically in elegant, easy-to-understand prose (without Greek letters or complicated formulas). For me, the key points were laid out in what later editions labeled Chapters 8 and 20. These points guide my investing decisions today.

A couple of interesting sidelights about the book: Later editions included a postscript describing an unnamed investment that was a bonanza for Ben. Ben made the purchase in 1948 when he was writing the first edition and -- brace yourself -- the mystery company was Geico. If Ben had not recognized the special qualities of Geico when it was still in its infancy, my future and Berkshire's would have been far different.

The 1949 edition of the book also recommended a railroad stock that was then selling for $17 and earning about $10 per share. (One of the reasons I admired Ben was that he had the guts to use current examples, leaving himself open to sneers if he stumbled.) In part, that low valuation resulted from an accounting rule of the time that required the railroad to exclude from its reported earnings the substantial retained earnings of affiliates.

The recommended stock was Northern Pacific, and its most important affiliate was Chicago, Burlington & Quincy. These railroads are now important parts of BNSF (Burlington Northern Santa Fe), which is today fully owned by Berkshire. When I read the book, Northern Pacific had a market value of about $40 million. Now its successor (having added a great many properties, to be sure) earns that amount every four days.

I can't remember what I paid for that first copy of The Intelligent Investor. Whatever the cost, it would underscore the truth of Ben's adage: Price is what you pay; value is what you get. Of all the investments I ever made, buying Ben's book was the best (except for my purchase of two marriage licenses).

Warren Buffet is the CEO of Berkshire Hathaway.

This blog post is taken from reference of the Fortune article

Warren Buffett CNBC Interview Oct. 16, 2013

2013-10-19T08:19:00.002-07:00

During the early morning of Oct. 16, 2013, Chairman of Berkshire Hathaway, Warren Buffett appeared on CNBC for a few hours with Becky Quick. There are a series of video clips posted below as well as a full transcript.

Buffett sounded fairly optimistic on CNBC noting he had made a billion-dollar acquisition this morning in the UK and also noting that it is not a mistake to buy stocks now, reaffirming stocks are not selling at “bubble” valuations. Buffett also weighed in on Carl Icahn’s proposed Apple (AAPL) buyback as well as FED policy, the debt ceiling, the future of J.C. Penney (JCP) and a few other things of interest.

Transcript
t's a perfectly okay debt to buy securities. We bought a $1 billion business about five hours ago. i think over at the uk. and we did not buy it with a condition in it that we could call off the deal if there was a no vote on the deficit change. limit change. so if you can own a good business, a good farm, a good apartment house, you know the united states is going to be around five or ten years from now and you know it will be more prosperous. it's not necessarily a mistake to buy stocks because you don't know the outcome of something that's happening in congress. that's a great long-term view. and your view has always been no matter what happens, we will get through it. we got through the great depression. we got through world war ii. but what about the immediate? people are really concerned about what's happening in washington right now. it's a mess. and if you think about it, i used to tell my children when they were young, it takes 20 years to build a reputation and 20 minutes to ruin it. we've been building a reputation for 237 years. the united states has become the reserve currency in the world in the process and people all over the world hold our paper. so to do anything to damage the 237 years of good behavior is idiotsy. i don't think it will happen. but if it does happen, it's a pure act of idiotsy.

i am fought worried in the sense of those treasury bills being paid. i'm worried about damage to an asset that we carefully cultivated for years. those short-term treasury bills, though, the rates have spiked on them, especially in the last couple of days. bill gross said he's a buyer over at pimco. are you? they've spiked, but you're talking about going from zero yield to 35 basis points. but 35 basis points for three or four days does not amount to a bunch of -- in other words, you're not scraping for cash? i've got better things to have had although that date looked pretty good. have you changed anything you've done at berkshire as a result of what's been happening in washington? no. we have been at a derth when it comes to getting any signs of the economy, any reading on what is happening because you don't have any economic numbers coming out. you have a lot of numbers coming out every day. in your opinion, has the u.s. economy been hurt by what's been happening in washington and does it show up in your receipts? it has not shown up. but what will show up is in the world, united states citizens lose some faith in the full faith and credit promise of the united states. that would be a momentous event. even if we said, well, we're slowing it for a week or we're putting out script or whatever, that would be huge. we have been spent 237 years building up our reputation for billing our bills on time.
but 1% real gdp growth per capita over a long period of time, it does wonders. are you telling us that we need to get used to this or is this a temporary rare thing and we're going to get back to what we used to expect? i don't know. i think it's very possible we get back to higher rates of growth, but i will tell you that this is not a disaster. i mean, if you -- just think about each generation living 20% better than the generation before them. that is not terrible. it's not terrible and it's not a disaster. but if you're looking for 3% versus 3.5% growth versus what whooefb getting, you're fought going to have the problems we've been dealing with today in washington. that takes care of itself. it takes care of itself unless we start making new promises. we tend to make big promises. we're like a very, very, very rich family and then we don't stop getting rich at quite the same rate. but our promises, we just went

The country should have a "sustainable path," says Warren Buffett, Berkshire Hathaway chairman & CEO, but Congress should "fight it out" without putting the nation's credit at risk.

issues. what's going on at benjamin moore now? we heard an employee was you fired. benjamin moore has been around over a hundred years. i made a promise to the dealers that we were going to stick with that and would not go with the big boxes. meaning the home depots and so on. that was enormously important. i did a video so there wouldn't be any question. i found we were about to sign with one of the big boxes. i had to make a change. we have a commitment toll to the dealers. we take care of them; they take care of us. i encouraged who was put in. recently we had to make a change for a reason i can't get into.

basically i'm buying businesses and bank stocks for that matter in terms of what's going to happen in the future not for what's happened in the past. i can go back with bank of america. i read a book 55 years ago. i can go back to the san francisco earthquake. they thought it was a down day and turned out to be a good day for bank of america. what really counts is the future. in the future, banks will have to carry, particularly larger banks are heavier capital. banks are in the best shape i can remember. they've built up capital enormously. portfolios are in good shape. big problem they have now is getting out more money. they have more money around than they would like. they are not reluctant to loan.

speaking of investors, let's see a what carl has been saying to apple. what do you think about his requests or demands to buy back the incredibly large church of stock? the apple management did a nice job running the company. i wish i bought the stock years ago. i did advise the stock years ago. they've got a lot of money that's not trapped over seas. they'd have to pay a big tax to bring it back. they hope for free trade at some point so they won't have to pay the tax. carl is suggesting they borrow money to buy back the big chunk of stocks. companies have done that including coca-cola. they're buying in stock. i've got -- i think the apple management and directors have done a good job running the company. i vote with them. versus what carl is saying? i do not think that companies should be run primarily to please wall street and largely shareholders going to sale. i prefer shareholders going to

do you agree with that opinion. i have no idea. the economy has been getting better. how they make a decision on whether to pull back -- it doesn't enter into my thinking. i'll put it that way. ben bernanke did make comments after the last fed meeting and said the trouble in washington was the reason they were standing pass for now. obviously he was right. look at what happened since then. at this point you try to figure out what pd in washington will have a serious impact on the economy. you haven't seen it in ub ins, but what's your guest in terms of if we were to get a resolution by the end of the week, how big the impact would be on the economy? if they get a resolution today, i think opinion of congress still will have diminished significantly. i don't think that will change the world or certainly won't change the people's feeling about the reserved currency. what would do the job, both parties say this is a weapon of mass destruction. we're not going to use it. we'll fight in trenches but not going to blow up the world to get our way. that doesn't sound like conventionalism in washington.

JCP - supplier in many respects. fruit of a loom. and also supply jewelry to them. there's a lot of questions about the health of the company. you as a former retailer yourself in the department store and now somebody that has a lot of retail business, you've been watching this. what do you think about what's been happening? it's very tough. the trouble with retailing is the competitor is always moving. getting your act together which they're doing is important. at the same time all others keep moving. it's just very tough. i have this huge rooting interest. i worked there when i was 16 selling shirts $1.98. i sold men's clothing, childrens and i loved it. i have always loved the company. it's tough to run it. of course when you have to do something like selling out whether 38% or a large number of shares it makes it very tough. coming from behind in retail is very tough.

the stock market compared to most asset classes in my view is the most attractive place to have your money over the next 20 years. over 20 days or 20 weeks i don't know. we have our money in businesses. we all all of some businesses, parts of some. we call those stock. we think that's where value lies. we had mark as a guest on the show yesterday. he laid out the argument about just by looking at formulas, playing the averages, that we are due for another correction at some point. you never know when or how that's going to happen. it was an argument for not getting caught up in the euphoria of the market and making sure you were diversified. do you think we've reached the stage in this market people have to worry about bubble levels? no. we could at some point. no. stocks are not selling at bubble levels. i think it's a terrible investment compared to equities. so you're going to have your assets in something. good businesses held for a long period of time are certain to deliver good results from this

Cash Cushion Makes a Comeback

2013-10-14T06:58:00.000-07:00

I read this article on last Wednesday's Business Times and thought that this is a great article to share with everyone. Given that the market has risen for the past 3-4 years, there are lesser and lesser bargains in the market. When there are lesser opportunity to invest money, probably a good way is to hold on to cash. Though the cash is not earning any returns while it sits idle, it would come in real handy when the market retreat and bargains start to surface

Below is the article from Norm Alster.

JITTERY investors see danger in every market thrust upward. For them, soaring stocks aren’t confirmation that the future looks bright. Sustained market gains seem more like evidence that optimism has been hijacked by delusion and greed, and due in time to be exposed and reversed.

With the Standard & Poor’s 500-stock index up almost 18 percent over the first nine months this year, the skeptical and fainthearted can choose from a bulging bag of protective hedges. They can short stocks individually or the market as a whole. Some inverse index funds and exchange-traded funds are leveraged to triple any move, providing outsize profits in a market slide, but enormous risks should the market keep marching higher.

Still, for most fund managers, there is a time-tested, less risky way to protect against overexposure to an overextended market. By holding cash instead of stocks in part of their portfolios, they can cushion any fall and save ammunition to buy again when stocks are cheaper.

Many fund managers have quietly been raising their cash positions. In their latest reporting periods, according to Morningstar, the average equity mutual fund held 9.7 percent in cash, up from 8.8 percent in the previous three-month period.

Some managers are sitting on much more cash than that. John Deysher, manager of the Pinnacle Value fund, has 44 percent of his portfolio in cash. But for managers like him, not being fully invested has a price. Though Pinnacle Value is up for the year, it has lagged behind the S.& P. 500. Mr. Deysher is unfazed.

For one thing, Pinnacle Value has outperformed the S.& P. 500 over the last decade. And Mr. Deysher would sooner lag behind the market than bend the buying discipline of the fund.

“Our job is to seek out fundamentally undervalued stocks, and if we can’t find any, we’ll let the cash build,” he said. “It’s been difficult for deep value investors like us,” he added. “There’s just not a lot of merchandise.”

For Mr. Deysher, capital preservation is paramount. “We’d really like to put the cash to work but not at the risk of potential capital loss,” he explained.

But Bruce Berkowitz, who manages several Fairholme funds, goes much further in outlining the merits of stockpiling cash.

“I believe holding above-average amounts of cash leads to above-average performance,” Mr. Berkowitz said. His Fairholme Allocation fund, which now holds 14.8 percent in cash, has outperformed, soaring almost 34 percent in the first nine months this year.

Having cash on hand can be the difference between getting in on the best buying opportunities, or missing out, Mr. Berkowitz reasons.

These opportunities typically arise when markets have sold off and many managers must sell to meet redemptions from fund shareholders. “Having that cash allows a portfolio manager to buy when most do not have the cash to make investments,” he said. It also allows a fund manager to meet redemptions without having to sell stocks that still have “huge performance potential.”

“Cash can be extremely valuable — especially when no one else has it,” Mr. Berkowitz said. “Cheap purchase prices are usually created when most funds are being forced to sell.”

A case in point: “All the companies I’ve invested in in the past three years were dramatically affected by the real estate bubble,” he said. Recoveries in the shares of the American International Group and Sears Holdings have produced big gains for the Fairholme funds.

But some question the value of trying to time market moves. “Evidence suggests that market timing is incredibly hard,” said Michael Abata, a manager of the Invesco Low Volatility Equity Yield fund. “If you can do it, it’s potentially powerful — but incredibly hard to do.”

Mr. Abata does not try. The Invesco fund now has less than 2 percent of its assets in cash. With investors buying and selling shares of a fund, that is close to being fully invested. The fund managed an advance of nearly 17 percent in the first three quarters of the year.

Though he does not hedge with cash, Mr. Abata is adjusting his strategy to the realities of a market that is becoming “increasingly expensive.” He is shifting portfolio weightings toward stocks that tend to have less volatility. He recently bought shares of AT&T and Verizon. He has reduced his position in First Solar, which tends to be a more volatile stock. What would Mr. Abata do if investors started bailing out of the fund during a sharp market correction? “If we were being redeemed, we’d sell off the less attractive holdings — those that don’t have as high an expected return,” he said.

Some mutual funds require fund managers to stay fully invested. Sometimes, large investors in a specific fund stipulate that the fund avoid holding cash, said Will Browne, a manager of the Tweedy, Browne Global Value fund. “There are certainly institutional accounts that give you money and say, ‘I want you to be fully invested.’ ”

But Mr. Browne, whose fund holds nearly 17 percent cash, said he “pushes hard” against such demands. He said he preferred to buy companies at prices that are lower than what an informed buyer would pay in an acquisition. If he cannot find them, he said, he is prepared to “lag behind” market returns for a while.

One fund manager who is still finding stocks to his taste is Richard S. Nackenson, of the Neuberger Berman Multi-Cap Opportunities fund. Mr. Nackenson has been nearly fully invested, retaining slightly more than 2 percent of assets in cash.

“We’re not required to be fully invested,” he explained. “We are choosing to be fully invested in this market because we’re finding high-conviction ideas. Many of these are companies that are showing growth in current and future cash flow.”

Such cash flow growth is appealing, as it can finance investor-friendly initiatives like dividend increases and share buybacks. Mr. Nackenson said he liked the free-cash-flow growth potential of Boeing, a long-term holding to which his fund has added shares recently.

Bargains seem to be in the beholder’s eyes. Unlike Mr. Nackenson, Kimball Brooker Jr. doesn’t see many now. The FirstEagle Overseas fund, of which he is a co-manager, has a hefty 23.1 percent of assets in cash. “We’re lagging the indices,” Mr. Brooker acknowledged, emphasizing that his first goal is “not to lose money.” “We’re just being very patient,” he said.

He sees most global markets as fully valued, a somewhat uncommon situation. “It’s unusual to have synchronous full valuation around the world,” he said.

Has Mr. Brooker heard complaints from disappointed investors? “Not yet,” he replied. “For the moment, 2008 and 2009 are still in the psyches of many investors,” he said. “There’s some appeal to a strategy that will protect them on the downside.”

Searching for Bargains from Warren Buffett's Portfolio

2013-10-12T02:58:00.002-07:00

Stocks have moved a long way in five years, making it a challenge for the world’s best living investor to find undervalued situations. “[Stocks] are probably more or less fairly priced now. We don’t find bargains around,”Warren Buffett told CNBC last week. “But we don’t think things are way overvalued either. We’re having a hard time finding things to buy.”

Perhaps Buffett will elect to purchase more of some of his current holdings. One such current holdings is Coke [KO]. Buffett has a 9% stake, or 400 million shares, which comprises 18% of his portfolio and makes him the company’s top shareholder. Buffett appeared at Coke’s annual meeting in April and said he would “never sell a share of Coke stock.” Coke shares have declined 2% over the past year, to a price of $37.77 on Thursday, which is 6.1% above their 52-week low of $35.58. Coke has recorded annual revenue growth of 10.9% and annual EBITDA growth of 9.6% rates over the past 10 years, and 13.8% and 9% respectively over the past five years.

With the decline in price, Coke has also caught the attention of another value investor. David Winters, CEO of Wintergreen Advisors, explains why Coca-Cola is his favorite stock in the U.S. “You can get rich if you’re patient” he says in the video below.

Income Investing: Low Key Contractor with Good Dividend Yield - Lum Chang

2013-10-11T00:46:00.000-07:00

This is an excerpt of article which appeared in the Edge on 29th April 2013

Family-controlled Lum Chang Holdings does not attract much attention in the market. Yet, the decades-old contractor is an interesting play on Singapore’s property and infrastructure boom. And, its dividend of two cents per share provides investors with a steady dividend yield of about 6%. Its market value of just $123.8 million is currently a 28% discount to its book value of $173.2 million. The company also has a liquid balance sheet, with a net cash position of $33 million as at end-2012.

Much like other contractors, Lum Chang has taken stakes in property development projects. For instance, it has a 30% stake in Twin Fountains, an executive condominium (EC) development in Woodlands. The remaining stake is held by Frasers Centrepoint. The project was sold out swiftly earlier this month. The company also has a 20% stake in another joint venture with Frasers Centrepoint to develop Esparina Residences, an EC located in Sengkang that is due to receive its temporary occupation permit (TOP) at end-2013.

The company’s forte lies in the construction of commercial buildings. They do a lot for companies such as Ascendas and LaSalle [Investment Management]. LaSalle was the partner in some projects such as Twenty Anson which was a joint venture. Lum Chang took a minority stake in Twenty Anson and constructed the building. In March last year, LaSalle and Lum Chang sold Twenty Anson to CapitaCommercial Trust for $430 million.

Lum Chang’s share of the profit was $6.3 million. Lum Chang was also the contractor for Crowne Plaza hotel at Changi Airport, a development that was owned by LC Development and a fund managed by La- Salle. LC Development is linked to the family that controls Lum Chang. The hotel was sold to Overseas Union Enterprisefor $299.5 million in 2011.

Lum Chang’s construction order book stood at about $600 million as at Dec 31. Its ongoing property development-related construction work comprises six projects. Two of these projects are for Ascendas: Nucleos in Biopolis Road and a business park development in Science Park Drive. Lum Chang is also building The Metropolis for Ho Bee Investment at Biopolis, Ripple Bay Condominium for MCL Land in Pasir Ris, and Esparina Residences.

RIDING THE MRT EXPANSION
Lum Chang’s largest project is the $450 million contract (officially named C912) to build an MRT station and a 1.8km cut-and-cover tunnel for Downtown Line Phase 2 in the Bukit Panjang area. The station will be largely underground with two basement levels and provisions for future underground pedestrian walkways to adjacent developments.

Lum Chang is trying to secure more MRT-related work but competition is stiff. Notably, the company tendered for a few projects for Downtown Line Phase 3 (DTL3), but failed to secure any work. “We found that if we tendered for standard stations, we were competing with a lot of players who could do it for less,” Fong admits.

In the meantime, Lum Chang is also looking into bidding for other types of infrastructure-related work, such as roads and highways. “We did the water reclamation plant at Changi. That is the deepest tunnel we have done,” Fong adds.

MALAYSIAN PROPERTY ARM

Credit: Bloomberg

Lum Chang also has a foothold in Malaysia, where it develops property. They are exploring the KL MRT project at the moment. The company’s main project in Malaysia is a 125-acre plot of land in Cheras on which it is developing landed property in phases. It’s about 600 units and just over RM1 billion [$407.7 million] worth of development.

The company also owns 30 acres in an area called Kemensah, just north of Zoo Negara, which is being developed into luxury bungalows.

Interestingly, Fong, executive director of Lum Chang, says profit margins for property development projects in Malaysia are higher than in Singapore. “Land is much cheaper; construction is cheaper in Malaysia than in Singapore,” Fong says. However, under its accounting policy, the company does not recognise revenue and earnings from its property development interests in Malaysia and its EC developments in Singapore. “We’ve got to wait till TOP,” Fong says.

Hence, Lum Chang’s reported revenue and earnings tend to be lumpy. For 1HFY2013 (the company has a June year-end), it reported a 202% rise in revenue to $67 million and a 220% jump in earnings to $12.1 million. Fong says this was because of the completion of certain phases of its projects, but warns that the same level of revenue and earnings might not be achieved in 2HFY2013.

“The nature of our business is project-based, so profits and revenue have a lot do with accounting policy,” Fong says. “And, it’s a bit lumpy in terms of profits because it depends on when projects finish.” Another uncertainty for investors is labour costs as the government tries to scale down the import of foreign workers, he adds.

LONDON INVESTMENT
To improve stability of income, Lum Chang made a property investment earlier this year. In February, it said it had bought property located at 42-60 Kensington High Street, London for £40.19 million ($76.8 million). “Our income will be mainly from the ground floor, achieving rental income from shops such as Zara, Topshop and Miss Sixty. The leases there are very long, 10-year leases and these will provide a good steady income,” Fong says.

The yield of the London property works out to 4.5%, giving an annual income of $3.4 million, according to a report by UOB Kay Hian. That is about 15% of the company’s earnings for FY2012. “We’ve always been project-based, either property development or construction,” Fong says. “We felt we should go for another line of business that could generate sustainable income.

Fong says Lum Chang is now looking for more ways to expand its recurring earnings base. “We are open to diversifying,” he says, adding that the company is already looking at one interesting project. “The operations would allow us to receive sustainable income for decades,” he says, declining to provide more details. Another opportunity Fong sees for Lum Chang is the refurbishment of old commercial buildings.

“A lot of old commercial buildings are looking tired. Instead of tearing them down, landlords are building extensions. We could be involved in doing that,” he says.

Lum Chang has paid a dividend of two cents per share for the last three financial years. “Our shareholders are usually the older generation who have been holding [our shares] for years and they want regular income,” Fong says. In fact, the dividend payout was raised from 1.5 cents per share to two cents in FY2010. “We felt our profits had stabilised and two cents is something which is quite achievable and sustainable over the medium term,” Fong says.

Lum Chang does not have much of a following among analysts, though. However, UOB Kay Hian notes that the stock appears to be inexpensive. “Trading at 0.8 times price to book looks reasonable when compared with peers’ average of one time,” the brokerage states in a report. “Since FY2010, Lum Chang has maintained a net cash position. Its stock price is underpinned by cash reserves of $77 million as at Dec 31, which accounts for 62% of its market cap.”

Amid the hunt for yield, Lum Chang seems a good alternative to real estate investment trusts and consumer-oriented stocks that have run up sharply over the last couple of years. The company has maintained its dividend payment of 2 cents over the last 3 years and it has increased its revenue and profit

Based on the S&P report on Lum Chang, LCH’s order book currently stands at SGD474 mln. Construction sector outlook remains sanguine as the Government continues to accelerate infrastructure spending to keep in line with population expansion. This is a stock with good dividends and at the same time allow investor to participate in the growth of the construction sector

Secrets of a Millionaire Mind

2013-10-06T00:31:00.001-07:00

Sometime back I happened upon a book by T.Harv Eker called ‘Secrets of the Millionaire Mind’. The book is basically about how your thoughts can affect the amount of money or abundance you receive in your life, and in my personal opinion, it is an excellent read. He was here in Singapore in March 2013 for Millionaire Mind Intensive seminar and is coming again in November 2013.

I know there are a lot of skeptics who debunk the idea that we create our own world by our thoughts, but I am interested enough in what Harv Eker wrote to want to attend the Millionaire Mind Intensive this coming November. This is one of those free seminars where they teach you a heap of stuff but they probably will also promote the hell out of their products….so it’s almost like attending a 3 day infomercial. But if you can put the promotional stuff aside, the stuff he teaches is really worth taking in and the book is excellent.

Apart from wanting to hear just what Harv Eker had to say, I am really interested in finding out more about his 7 jars money system. Financial freedom is so important and when you start receiving large amounts of money it is very easy to just blow it, and this is something we don’t want to do.

Below are some points I’ve learnt from reading the book:

· Pay yourself 10% first.

This is a fundamental concept and is also mentioned in “The Richest Man in Babylon”. Unfortunately, most folks never put this into actions. The worse of the kind are those who already know it but never put any concrete actions into the doing. Personally, I have been putting 10% of my active income every month into my company’s stock purchase plan. I also planned to participate in a regular investment plan, POSB Invest-Saver where it buys into Nikko AM Singapore STI ETF. This simple and fool-proof strategy allows me to average up and down regardless of market conditions.

· Clarity Is Power. Thoughts –> Emotions –> Actions = Results

There are many people who dreams of being a millionaire one day but all these dreams can only come true with action. With a clear mindset and goal, it will empower one with the ability to act. By simply knowing absolutely how much is enough and by when, your financial path is all set once clarity is formed. The rest is finding your way towards that clear goal. For example, “$120,000 pa residual income in 10 years’ time”.

· Financial jars – a consistent and proven money management system. It forms the basis of your financial success.

Personally, I think the jars are very useful principles that can be easily applied by just about anyone regardless of their income. Here’s how it works:

(Note: The percentages shown are purely suggestive figures. You are free to adjust them to your needs.)

Financial freedom jar 15% –. You never ever spend this money until you’re financially free. Preferably, the money is invested, either by participating in a passive investment plan such as POSB Invest-Saver or active stock picking by purchasing undervalued stocks

Education jar 5% – Pay for your continuous financial education such as reading investment books, attending seminars etc.

Long term savings jar 10% - Typically for buying large ticket items such as car

Necessity jars 55% – Used for paying all your bills and living expenses.

PLAY jar 10% – For treating yourself well, such as going on a holiday

GIVE jar 5% – Excellent money receivers are also excellent giver. If you cannot afford $, then give your time.

· Financial Freedom formula

1. Income

2. Savings

3. Investments

4. Passive Income

5. Simplify

The book itself is well worth reading if you want to change your thoughts about money. Eker uses lots of comparisons between the rich and the poor. For example:

· Rich people associate with positive people, poor people associate with negative people.

· Rich people are excellent receivers, poor people are poor receivers.

· Rich people believe ‘I create my life’. Poor people believe, ‘Life happens to me’.

· Rich people act in spite of fear. Poor people let fear stop them.

· Rich people focus on opportunities, poor people focus on obstacles.

I do recommend that you read “The Secrets of a Millionaire Mind” or attend the Millionaire Mind Intensive (I know I will try to attend by registering for the free tickets). However knowing that some people might get swept up in the hype of the seminar and sign up for courses, I would recommend leaving your checkbook at home so that you don’t rush into signing up for something you may not need. Reflect on the usefulness of the courses before deciding to sign up

Recommended Reading

§ Secrets of the Millionaire Mind – this is a must read if you want to change your money mindset. However, don’t be put off by the promotional stuff in the book. Just look past that because this book is invaluable for changing your money blueprint.

Finding Undervalued Singapore Stock: Ocean Sky - update

2013-10-05T07:33:00.000-07:00

Ocean Sky was first featured on this blog 6 months back as an undervalued stock (refer to article). Apparently, I am not the only one who thinks that Ocean Sky is undervalued, Ezion (a hot stock considered by many local investor) announced that they are proposing to inject its marine supply base asset into Ocean Sky at cost via a share swap. Post exercise, Ezion will hold 45.15% in Ocean Sky while the latter will have a 2% stake in Ezion. This is a strategic move to enable Ezion to tap into the growth potential of the marine supply base business in Australia without stretching its balance sheet and resources further, while allowing the company to stay focused on its core liftboat and service rigs business.

Ezion will issue 20.2m new shares @ S$2.351 per share in exchange for 440m new shares in Ocean Sky @
S$0.108 per share. In addition, Ezion will have the right to subscribe for an additional 165m shares @ S$0.108, which would raise its stake in Ocean Sky to c.50%.

Upon conclusion of the deal, the existing Chief Operating Officer (COO) of Ezion – Captain Larry Glenn Johnson - will join Ocean Sky as Chief Executive Officer (CEO) to spearhead the marine supply
base business.

Read more details of the deal by downloading report here

Why People Don't Succeed in Value Investing

2013-10-04T21:57:00.003-07:00

Jason Zweig writes “The Intelligent Investor” column on the Wall Street Journal’s Website (WSJ.com). The edition of Benjamin Graham’s “The Intelligent Investor” book with Zweig’s commentary is considered to be the version to read. His post on "Value Stocks Are Hot—But Most Investors Will Burn Out" dated 18th February 2013 makes the most sense on why so many investors do not succeed when they take the value investing approach and I thought it would be good to share with readers

Some important excerpt from the article:

"Most people aren't cut out for value investing, because human nature shrinks from pain," the money manager Jean-Marie Eveillard told me this past week. His words are a reminder thatmaking money on cheap stocks—the goal of every value investor—is harder than it sounds and can take years to play out
The fund industry has long marketed the chimera of "consistency," the idea that a great stock picker can always earn higher returns than the market. Investors who buy into this myth often sell in a panic as soon as the next crash proves that no stock picker can always outperform
Summit Street Capital Management, an investment partnership in New York, recently analyzed a group of value investors with long records of superior returns and found that even the best underperformed one-third to 40% of the time. "It's hard not to get shaken out unless you understand that and have conviction," says Summit Street partner Jennifer Wallace
To be a value investor, it isn't enough to buy cheap stocks or the funds that own them. You have to stick around until the market recognizes their worth. Mr. Eveillard, now 73 years old and an adviser to his old fund, is still finding bargains in Japan and among gold-mining stocks—but he is prepared to "suffer" until the market proves him right

Top 5 Best US Value Mutual Fund
Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Richer (Amazon)

Top 10 Investment Books for Superinvestors

Five best performing S-REITS in 2013

2013-10-04T21:34:00.000-07:00

The five best performing REITs since the end of 2012 have included two REITs that invest mostly in properties in Singapore, one that invests in properties in Hong Kong, one that invests in properties in Japan and one that invests mostly in properties in Indonesia, according to an My Gateway email update by the Singapore Exchange.

Total returns (including dividends) of the REITs in 2013 YTD have ranged from -11.1% for CapitaRetail China Trust to + 13.3% for Parkway Life REIT.

Real Estate Investment Trusts (REITs) invest in professionally managed real estate assets. With three new listings this year, SGX now lists 25 REITs that are governed by the Collective Investment Scheme. The 25 REITs listed on SGX are varied by the type of properties in the portfolio in addition to the location of those properties. Five invest solely in international properties while nine hold both international and Singapore real estate. There are 11 REITs that have their entire portfolio currently made of Singapore properties.

In the 2013 year thus far, the FTSE ST REIT Index has declined 1.5% on a total return basis which takes into account weighted price appreciation and dividend distributions. This has followed on from a total return of 46.2% for the 2012 year.

Attuned with the status of an Asian REITs hub, just two of the five best performing REITs since 2012 are investing mostly in Singapore properties. The five best performing REITs since 2012 include Fortune REIT which invests in residential-related properties in Hong Kong, Saizen REIT which invests in residential-related properties in Japan and First REIT that invests mostly in health care related properties in Indonesia.

How Mohnish Pabrai uses Checklist Investing

2013-10-03T08:27:00.000-07:00

Forbes recently published an article "How Mohnish Pabrai Crushed The Market By 1100% Since 2000"
which provides glimpse on how Mohnish Pabrai uses a checklist in his investment decisions.

Mohnish Pabrai’s long-only equity fund has returned a cumulative 517% net to investors vs. 43% for the S&P 500 Index since inception in 2000. That’s outperformance of 474 percentage points or 1103 percent.

Mohnish Pabrai

Pabrai is a classic value investor in the tradition of Warren Buffett, Charlie Munger, Seth Klarman and Joel Greenblat. I recently had an opportunity to hear him talk and thought I’d pass along some of my bright yellow highlighting.

How to start investing

For Pabrai, this yellow brick road begins with Warren Buffett’s annual letters to shareholders (totaling 730 pages, now conveniently available for your Amazon Kindle for $2.99 cheap). From there he recommends the Buffett biographies (mentioning the ones by Lowenstein and Schroeder). I might add, though he didn’t, that you could do worse than to read Pabrai’s own book, The Dhando Investor.

Like Buffett, Pabrai looks at a stock not as a piece of paper but as the ownership of a business. He has no interest in a company that looks ten percent undervalued. He is angling to make five times his money in a few years. If he doesn’t think the opportunity is blindingly obvious, he passes. This requires him to apply his X-Ray vision to the fundamentals, and weigh the downside risk (the margin of safety) vs. the upside potential (the moat) at a given price. His mantra: Heads I win, tails I don’t lose much.

Next, Pabrai practices patience. He takes Charlie Munger’s admonition to heart that money is made not in the buying or selling but in the waiting. As far as I am aware, he has not made a single new investment in 2013. He says that if he can find a couple of investment ideas a year, that’s plenty. His current preference is to keep a cash store of between 10%-20%. This seems like a tremendous drag for a fund posting numbers like his, but he is really biding his time for a distressed situation to come along when he can deploy this trove at the valuation he wants. During the next crisis, when everyone is jamming the exits, he will go all in.

Once you start purchasing stocks, Pabrai says the next step is to closely examine every trade that doesn’t work, and figure out what went wrong. Let me pause right here, because this is key to his whole method.

There is nothing more tempting that to sweep mistakes under the rug. Denial is one of our top defense mechanisms. If you are lucky, these trades come to haunt your sleep like Marley’s ghost. If you are unlucky, you repress them forever.

Due to his background in engineering, Pabrai does not gloss over mistakes. Investing is a field where you can have a high error rate (buying something you shouldn’t have, selling something you shouldn’t have, not buying something you should have, not selling something you should have) and still be successful. He takes as a given that mistakes are inevitable. The point is to learn from them so they are not repeated. A major portion of his annual meeting is devoted to publicly analyzing investments where he lost money for his partners. Lately these errors are becoming harder to find, so he has been reduced to talking about investments that didn’t fare as well as expected.

The checklist

Pabrai was impressed by Atul Gawande’s Checklist Manifesto, which recounts how a technology seemingly as trivial as a checklist led to life-saving results in the airline cockpit and the operating room. He wondered whether it could work the same magic for investors.

He began by looking at the public record of the investors he admired and deconstructing the mistakes they made — cases where there were klaxons sounding even the great ones missed. He cites the example of Berkshire Hathaway’s purchase of Dexter Shoes — a New England factory with a great product used by everyone with feet. It immediately got hacked to pieces by cheap foreign labor. Hence, one checklist item: is this a business that can be negatively impacted by low-cost competition from abroad?

After this analysis, he came up with one hundred or so check boxes. He keeps it proprietary, but claims that if we were to see it, we would think it was jejuneand throw it away. I wonder. In any event, the items are grouped into categories. A lot of them have to do with leverage, for obvious reasons. A second group relates to the durability of the business’s “moat” — how difficult it is for new entrants or competitors to duplicate their product or service. A third set of questions examine the quality of the company’s management. Is the company being intelligently run for the benefit of shareholders? There is also a fourth set of miscellaneous items, such as unions and labor relations, or is the company operating with a tailwind that may be only temporary?

Yale economist Robert Shiller has noted that many of the biggest advances in financial risk control seem ridiculously modest today: the widespread availability in the 19th century of cheap paper made from wood pulp instead of cloth, the typewriter, carbon paper, the standardized form, the filing cabinet — all these made substantial improvements in the reliability of business operations.

Pabrai can can tick most of the boxes in twenty minutes, but then it gets interesting, because he realizes there are some areas — often not top-of-mind — that need more research and clarification. This is the biggest payback, because it forces a 360 degree look at risk. The human animal gets into tunnel thinking once it likes an investment idea, and this usefully stops that momentum. Since 2008, Pabrai also has started talking over his investment ideas with a peer prior to jumping in.

The checklist is doubly important for a concentrated fund like his, which might only contain ten tickers. Since he is angling for big total returns, these are usually companies in some distress to begin with — either from their own misdeeds or due to macro factors. So far, it has radically trimmed the downside tails, although it has yet to be tested in a crash landing.

Cloning

For Pabrai, investing is not an originality contest. He shamelessly appropriates the ideas of others. For example, he lifted the structure of his fund directly from the Buffett partnerships of the 1950s. His primary source of investment ideas? The 13F SEC filings from other value managers he admires: Berkshire, Longleaf, Baupost, Greenlight, Pershing Square, Third Avenue, etc. He cites the University of Nevada study by Martin and Puthenpackal showing how merely investing alongside Warren Buffett (after information about Berkshire’s buys and sells became public) managed to beat the market by 11% a year over a 31-year period.

It looks like Pabrai holds the world in a paper cup. To make matters worse, he’s also charitable, and his Dakshana Foundation is one of the best charities on the planet. While he makes it sound easy, remember that he has nerves of steel and when he does invest, he goes in with unshakable conviction. He’s willing to reach out and grab a stock falling like a dagger and then to keep buying while it plummets into the abyss. I remember seeing him in September 2008 when his fund was down 60% and the global financial system was coming off the rails. These facts bounced off him like a pea-shooter. His only concern was finding cash to buy stocks while they were still cheap.

World’s Best Investing Checklist

2013-10-03T08:01:00.002-07:00

Peter Kaufman has done an amazing job compiling some of the world’s best lessons on investment behaviour into a masterpiece. We know it as “Poor Charlie’s Almanack“, which is a collection of speeches and talks by Charlie Munger.

While the entire book is one amazing journey through the mind of one the greatest investment and behavioural thinkers of our times, one part that takes the cake is where Kaufman has condensed Munger’s teachings into a checklist.

He calls this “Investing Principles Checklist”, as it contains the core principles that has made Munger the brilliant investor he is today.

These principles can further be condensed into four most basic guiding principles of life and investing –Preparation. Discipline. Patience. Decisiveness.

These principles cannot be prioritized in terms of any importance. Rather, together, they make up a sensible, thinking, and disciplined investor’s mental toolkit.

Munger’s Investing Principles Checklist

1. Risk - All investment evaluations should begin by measuring risk, especially reputational.

Incorporate an appropriate margin of safety

Avoid dealing with people of questionable character

Insist upon proper compensation for risk assumed

Always beware of inflation and interest rate exposures

Avoid big mistakes; shun permanent capital loss

Objectivity and rationality require independence of thought

Remember that just because other people agree or disagree with you doesn’t make you right or wrong – the only thing that matters is the correctness of your analysis and judgment

Mimicking the herd invites regression to the mean (merely average performance)

Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day

More important than the will to win is the will to prepare

Develop fluency in mental models from the major academic disciplines

If you want to get smart, the question you have to keep asking is “why, why, why?”

Stay within a well-defined circle of competence

Identify and reconcile disconfirming evidence

Resist the craving for false precision, false certainties, etc.

Above all, never fool yourself, and remember that you are the easiest person to fool

“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.”

Determine value apart from price; progress apart from activity; wealth apart from size

It is better to remember the obvious than to grasp the esoteric

Be a business analyst, not a market, macroeconomic, or security analyst

Consider totality of risk and effect; look always at potential second order and higher level impacts

Think forwards and backwards – Invert, always invert

Remember that highest and best use is always measured by the next best use (opportunity cost)

Good ideas are rare – when the odds are greatly in your favor, bet (allocate) heavily

Don’t “fall in love” with an investment – be situation-dependent and opportunity-driven

“Compound interest is the eighth wonder of the world” (Einstein); never interrupt it unnecessarily

Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake

Be alert for the arrival of luck

Enjoy the process along with the proceeds, because the process is where you live

Be fearful when others are greedy, and greedy when others are fearful

Opportunity doesn’t come often, so seize it when it comes

Opportunity meeting the prepared mind; that’s the game

Recognize and adapt to the true nature of the world around you; don’t expect it to adapt to you

Continually challenge and willingly amend your “best-loved ideas”

Recognize reality even when you don’t like it – especially when you don’t like it

Remember that reputation and integrity are your most valuable assets – and can be lost in a heartbeat

Guard against the effects of hubris (arrogance) and boredom

Don’t overlook the obvious by drowning in minutiae (the small details)

Be careful to exclude unneeded information or slop: “A small leak can sink a great ship”

Face your big troubles; don’t sweep them under the rug

2. Independence - “Only in fairy tales are emperors told they are naked.”

3. Preparation - “The only way to win is to work, work, work, work, and hope to have a few insights.”

4. Intellectual humility - Acknowledging what you don’t know is the dawning of wisdom.

5. Analytic rigor - Use of the scientific method and effective checklists minimizes errors and omissions.

6. Allocation - Proper allocation of capital is an investor’s number one job.

7. Patience - Resist the natural human bias to act.

8. Decisiveness - When proper circumstances present themselves, act with decisiveness and conviction.

9. Change - Live with change and accept unremovable complexity.

10. Focus - Keep things simple and remember what you set out to do.

In the end, it comes down to Munger’s most basic guiding principles, his fundamental philosophy of life:Preparation. Discipline. Patience. Decisiveness.

This post first appeared on http://www.safalniveshak.com

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How The Economic Machine Works by Ray Dalio

2013-09-29T00:49:00.001-07:00

This is a great post from Ray Dalio on how the economy works which comprises of transactions and how credit is created. This gives insight into economic cycles. Ray Dalio is the hedge fund manager of Bridgewater Associates with $75 billion under management. I strongly recommend all readers to watch this video as this is 31 minutes well spent! This gives a simple insight and understanding of the economy.

Also check out, The Alpha Masters: Unlocking the Genius of the World’s Top Hedge Funds,where Dalio gave Maneet Ahuja exclusive access for a rare interview and profile of himself.

Value Investing Presentation by Aggregate Asset Management

2013-09-21T00:13:00.002-07:00

I recently watched this presentation by Aggregate Asset Management on "The Scientific Approach to Achieving Double Digit Returns Using Value Investing" that was posted on the "InvestmentMoats" blog. In the presentation, they showed how buying a basket of low PE and P/B stocks would return an annual return of 14% - 15%. They also shared some common investment knowledge. For readers who have been investing for quite a while might not pick up any new investing knowledge or stock tips however I still think that this video is a good watch (especially since it is coming from local fund manager that has recruited Business Times editor Teh Hooi Ling)

Singapore Stocks Investing Strategy: DBS Vickers

2013-09-21T00:01:00.002-07:00

This is a report issued by DBS Vickers on 26th August when the market sell down due to anticipation of QE tapering (now that we know that there is no QE tapering, we probably can expect a rebound in the STI)
In this report, they had recommended the following stocks:

1. Technology stocks are early recovery plays – CSE and Venture have significant exposure to US/Europe and offer attractive yields of 4.7% and 6.7% respectively. CSE’s proposed listing of its UK subsidiary could lead to a dividend bonanza on successful listing.
2. Selected industrials – Ezion and Goodpack will leverage on their niche positions in the global arena.
3. Stocks with earnings visibility supported by yield such as SingPost, Comfort Delgro,.ST Engineering and Hutchison Port

Click here to access the report

Other articles on SG stocks investing strategy
Hunting for Value In Singapore Stocks
SG Stock Investing Strategy: UOB Kay Hian
Invest Like Benjamin Graham in Singapore Stocks

Becoming a Better Investor via a Latticework of Mental Models - Robert H...

2013-09-16T08:09:00.001-07:00

Robert Hagstrom portfolio manager and Buffett author (The Essential Buffett: Timeless Principles for the New Economy) goes through Charlie Munger's concept of a latticework of mental models and how to use it to become a better investor. Charlie Munger's use of latticework of mental models in investment analysis is also highlighted in his book - Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger

Hagstrom thinks that philosophy can play a big roll for investors and walks through how using Amazon.com in the video above

Jim Rogers Take Initial Stake in Geo Energy Resources

2013-09-07T06:43:00.000-07:00

Jim Rogers is a renowned international investor and his stocks picks are scrutinized by retail investors. He has authored many top seller books such as Street Smarts: Adventures on the Road and in the Market and Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market

It was reported in The Edge that International investor James Beeland Rogers Jr, better known as Jim Rogers, has started building his direct stake in Geo Energy Resources. On Aug 22, Rogers acquired 1.7 million shares in the coal mining and trading company at 35.5 cents each. The acquisition was Rogers’ first direct investment in Geo Energy, bringing his direct interest in it to 0.15%.

He is also deemed interested in another 0.17% of the company, owing to an agreement with executive chairman Charles Antonny Melati, granting Rogers a call option over two million of Geo Energy shares belonging to Melati. The call option’s exercise price is 35 cents a share, with an exercise period of 10 years, starting from Jan 1, 2015. Rogers was appointed a non-executive director of Geo Energy in December 2012.

For 2QFY2013, Geo Energy reported a 7% increase in earnings to US$5.1 million ($6.51 million) from a year ago on the back of a 25% increase in revenue to US$32.2 million. Group revenue rose from the increase in coal production and sales from its mining concessions in Kutai Barat in East Kalimantan, increase in equipment rental income, and additional revenue from mining services and coal trading, despite lower average selling prices of the coal it produced at its mining concession.

Gross profit margins fell 8 percentage points to 30% on the back of lower margins commanded by its coal trading and mining services business, compared to the coal sales from its cooperation contracts, which were terminated in September 2012, and its East Kalimantan mining concession.

Jakarta-headquartered Geo Energy, listed on the SGX Mainboard in October 2012, raised about US$63.7 million in net proceeds. It planned to use the proceeds for the acquisition of additional mining equipment and machinery, the construction of a jetty and barge loading facilities for the mining licences it has already obtained, potential M&A, and working capital. On the first day of trading, more than 323.2 million of its shares changed hands, and it closed at 43.5 cents, more than 33.8% above its offer price of 32.5 cents. The stock closed at 36.5 cents on Aug 28.

Click here for other articles related to Jim Rogers:

Jim Rogers will buy Gold Aggressively at $1200 per Ounce

Value Investing Classic: The Money Game

2013-09-07T05:37:00.003-07:00

The Money Game is a classic value investor book that is highly recommended by many value investors and value investing blogs. I recently got a chance to read this 1976 classic and for me, this was a fantastic book and a very enjoyable read.

Smith covers such topics as mass psychology, fundamental analysis, technical analysis, equity valuations, mutual funds and more. In Smith's game, money is how you keep score, and if you're making money, you're winning the game. History is a great teacher, and Smith's book provides many lessons that can be applied by each new generation of investors.

Top 10 insights on Investing from The Money Game

1) “If you are a successful Game player, it can be a fascinating, consuming, totally absorbing experience, in fact it has to be. It it is not totally absorbing, you are not likely to be among the most successful, because you are competing with those who do find it absorbing.”

2) “The irony is that this is a money game and money is the way we keep score. But the real object of the Game is not money, it is the playing of the Game itself. For the true players, you could take all the trophies away and substitute plastic beads or whale’s teeth; as long as there is a way to keep score, they will play.”

3) “In short, if you really know what’s going on, you don’t even have to know what’s going on to know what’s going on.”

4) “You must use your emotions in a useful way…Your emotions must support the goal you’re after…You must operate without anxiety.”

5) “The strongest emotions in the marketplace are greed and fear. In rising markets, you can almost feel the greed tide begin…the greed itch begins when you see stocks move that you don’t own.”

6) “If you know that the stock doesn’t know you own it, you are ahead of the game. You are ahead because you can change your mind and your actions without regard to what you did or thought yesterday.”

7) “Who makes the really big money? The inside stockholders of a company do, when the market capitalizes the earnings of that company.”

8) “What you want is the company which is about to do that (compounding earnings) over the next couple of years. And to do that, you not only have to know that the company is doing something right, but what it is doing right, and why these earnings are compounding.”

9) "Remember that when you buy a stock, it doesn't know that you own it."

10) “It is an informal thesis of charting that there are roughly four stages of stock movement. These four are: 1) Accumulation: To make a perfect case, let us say the stock has been asleep for a long time, inactively trade. Then the volume picks up and probably so does the price. 2) Mark-up…Now the supply may be a bit thinner, and the stock is more pursued by buyers, so it moves up more steeply. 3) Distribution. The Smart People who bought the stock early are busy selling it to the Dumb People who are buying it late, and the result is more or less a standoff, depending on whose enthusiasm is greater. 4) Panic Liquidation. Everybody gets the hell out, Smart People, Dumb People, “everybody.” Since there is “no one” left to buy, the stock goes down.”

Even though the book was written over 40 years ago, it is remarkable how little some things change. I strongly recommended all investors to read this book.

The author also profiled Top 10 Investment Books for Superinvestors and The Art of ValueInvesting

Top 30 Singapore Stocks for 2nd Half of 2013

2013-08-24T23:28:00.001-07:00

With the recent sell-down in STI, it is a good time for bargain hunters to shop for stocks with good fundamentals and growth. OSK-DMG has recently released its 2013 edition for institutional clients (and it's not for sale).This is the third compilation of their top 30 picks since 2011. The 2012 edition of our Small Cap Jewels made quite a splash. According to Terence Wong, head of Research, "Over 70% of the stocks we picked made money, with the biggest companies making the most." Hence readers can reference their picks for 2013. They include companies that have consistently done well over the past few years (OSIM and Ezion), turnaround plays (Midas Holdings and Eu Yan Sang), established players in their own fields but not covered by any analysts (Sinarmas Land), and yield plays (UMS Holdings).

In terms of sectors, oil and gas, construction, and consumer feature prominently, with five to six companies from each sector making the list. Overall, about half of the counters are new entries. OSK-DMG has no rating on five of the companies —Mencast Holdings, Pan-United Corp, Sinarmas Land, Tiong Woon Corp andYongnam Holdings. Ezion, which is on the list for the third year, is the biggest of the 30 by market value, at about $2.3 billion. BBR Holdings is at the opposite end, with a market cap of about $80 million.

OSIM, another repeat entry, should continue to shine even after a strong run-up in the last couple of years, according to Wong. “Some people say ‘Nobody goes to their shops. How can they make money?’ But OSIM has managed its expenses so well that as long as they sell one massage chair a day per store, they will make money, and these guys have been doing it.”

In particular, sales in the China market are expected to continue increasing, he adds. “[OSIM CEO] Ron Sim believes so much in brands. He is bringing TWG Tea to China. That’s why he set up a very posh outlet in IFC Mall [in Hong Kong], which is a springboard for OSIM to China. I think that’s going to yield dividends for the company.” OSIM owns 45% of TWG.

TURNAROUND PLAYS
As for stocks with a recovery theme, Wong tips Eu Yan Sang as one to watch. A company in Australia it invested in two years ago ran into cash-flow problems and eventually came under receivership. Eu Yan Sang took it over but has lost more than $8 million trying to turn the business around. As part of efforts to get it back on its feet, the traditional Chinese medicine maker expects to run more outlets on its own in Australia than award franchises to third parties. Of its 82 stores Down Under, 51 are run by franchisees.

Eu Yan Sang’s chief financial officer Lam Chee Weng expects the Australian operation to break even in 2015. In the meantime, the group is looking to boost sales by introducing products with some elements of Western medicine. “The first wave of TCM products with an infusion of Western medicine will be introduced by early next year. At the same time, we will introduce some of the products we already have in Australia to markets in Singapore, Malaysia and Hong Kong,” Lam says.

Another recovery play OSK-DMG recommends is Midas Holdings. Its current share price is less than half of its 2010 peak of $1.16, plagued by poor global investor sentiment towards China’s rail sector as a result of fatal train collisions and corruption by senior government officials in recent years. Orders have started to pick up, though, and Midas CEO Patrick Chew is prepping up the company for new avenues of growth.

“We are still very much single-sector-focused, but we have formed a joint venture that manufactures aluminium alloy plates and sheets. We target to supply these products to Indonesia and to the whole transport spectrum, including aviation, automobile, railway and other engineering purposes,” says Chew.

Notably, prospects for the automotive market are promising, he adds. “Right now, cars in China are all made of steel. As part of the government’s initiatives to reduce emission, cars will change to aluminium bodies. This new plant is catered to the entire transportation segment. We do this to mitigate the risk of over-reliance on a single segment.”

Meanwhile, amid growing concerns about the health of China’s financial system, investors need not worry about how the country will fund its massive rail expansion, Chew adds. “We know investors are worried about funding. The former Ministry of Railways had debts of RMB2.8 trillion [$560 billion] on its books. It’s a big sum. We believe the Chinese government may take over all or part of the debt that is carried in the books of China Railway Corp so as to allow them to start from ground zero. CRC may also float its assets to raise funds from the market.” Previously part of the now-defunct Ministry of Railways, CRC is the country’s national railway operator.

NAM CHEONG, SINARMAS LAND

Besides Ezion, another one of OSK-DMG’s favourite stocks in the oil and gas space is Nam Cheong, which builds offshore support vessels. “Before I hooked up with Nam Cheong, I had this really, really bad impression of the sector because what they do, to me, is speculative buying,” says Wong. “But after checking out the company, I realised that it’s actually something different. They know their clients so well that they’ve managed to preempt their orders.

“Half of Nam Cheong’s orders come from Petronas. When Petronas requires vessels, they will knock on their door asking if they have any and [Nam Cheong] will go ‘Of course, but I’ll just charge you a higher fee.’ This is what Nam Cheong has been doing and their margins are getting richer.”

Among the non-rated companies in the top- 30 list, Sinarmas Land could be worth watching, according to Wong. With a market value of about $2 billion, the company is the largest Singapore-listed property group that has no analyst coverage.

Sinarmas Land, formerly known as Asia Food & Properties, is a major property developer in Indonesia, which accounts for up to 90% of its revenue. Controlled by the Widjaya family, the company is involved in all segments of real estate — residential, townships, commercial, retail, industrial and hospitality, including golf resorts. The bulk of its assets in Indonesia are held by its 50%-owned Bumi Serpong Damai, which is listed in Jakarta, with a market value equivalent to about $3.5 billion.

Sinarmas Land also owns commercial, residential and hospitality properties in Singapore, Johor, Chengdu and Shenyang in China, as well as London. In Singapore, it owns about 21% of Orchard Towers, a strata-titled commercial building. It attempted to sell its stake in Orchard Towers early this year through a tender, but did not proceed as the bids did not meet its expectations.

“We will try to unlock value when the opportunity comes,” says Robin Ng, executive director at Sinarmas Land. “It’s almost 100% leased at the moment. We enjoy good rental income from Orchard Towers, so we are not in a rush to dispose of it.”

The group also intends to generate more recurring income and expand its presence outside Indonesia. “That means we will look at investment properties in international markets,” says Ng. Property development makes up 80% to 85% of overall revenue at present. The company plans to lower this to 75%, with the rest of its revenue coming from investment properties, he says.

“London isn’t the only location we are looking at. Countries that we think could offer opportunities include Australia and the US,” says Ng. “What’s important is that the property has to generate cash flows and offer a good yield. There must also be good liquidity in the market. That gives us an exit plan if we decide to rebalance our portfolio.” Sinarmas Land is in a net cash position, with $811 million in cash as at end-June.

This blog has also previously featured Sinarmas Land Warrants which could be another way to invest in Sinarmas Land.

The Art of Value Investing: How the World's Best Investors Beat the Market

2013-08-09T20:52:00.002-07:00

Today we're reviewing the new book, The Art of Value Investing: How the World's Best Investors Beat the Market by John Heins and Whitney Tilson. These two have aggregated an entire book full of quotes and anecdotes from top hedge fund managers over the years.

The Art of Value Investing: Book Review

Investing is a continual education.While learning from your own mistakes is one way to improve your investment process, it can also save you a lot of aggravation and money to take the time to learn from others who are willing to share what they've learned as well, and that's exactly what this book does.

The Art of Value Investing makes you feel as if you're sitting at a giant table full of some of the best investors today. A topic of investment process is opened for discussion and everyone chimes in with their thoughts, all while you sit there rapidly absorbing all that you can.

Chapters of the book include wisdom from managers on topics such as: circle of competence, generating ideas, portfolio construction, guarding against risk, and more. Fund managers quoted in this book consist of the following:

Seth Klarman (Baupost Group)
Howard Marks (Oaktree Capital)
David Einhorn (Greenlight Capital)
Jon Jacobson (Highfields Capital)
Lee Ainslie (Maverick Capital)
Julian Robertson (Tiger Management)
John Burbank (Passport Capital)
Mitch Julis (Canyon Capital)
Joel Greenblatt (Gotham Capital)
Jeff Ubben (ValueAct Capital)
James Crichton & Adam Weiss (Scout Capital)
Larry Robbins (Glenview Capital)
Ricky Sandler (Eminence Capital)
Bruce Berkowitz (Fairholme Capital)
Thomas Gayner (Markel Corp)
Prem Watsa (Fairfax Financial)

Quote from the Book

Excerpt from David Einhorn on page 107:

"We take the traditional value investor’s process and just flip it around a little bit. If you’re looking for something that’s cheap, you’ll probably do a variety of screens—on price‐to‐sales, price‐toearnings, price‐to‐book, whatever—to identify stocks that appear to be inexpensive. Once you have that list, then you start to research if there are good reasons the stocks deserve to be cheap, or if maybe there’s an investment opportunity because they’re cheap without a good reason. We think that’s the way most value investors approach it.

We never do screens like that. We start by identifying situations in which there is a reason why something might be misunderstood, where it’s likely investors will not have correctly figured out what’s going on. Then we do the more traditional work to confirm whether, in fact, there’s an attractive investment to make. That’s as opposed to starting with something that’s just cheap and then trying to figure out why. We think our way is more efficient."

High Praise From Other Hedge Fund Managers

This is a fantastic book for any investor, whether you're a beginner or a professional. It has earned praise from many Hedge Fund Managers. Here's what Omega Advisors' Lee Cooperman had to say about The Art of Value Investing:

"They have provided in one publication invaluable insights from some of the most accomplished professionals in the investment business. I would call this publication a must-read for any serious investor."

Highfields' Jon Jacobson called it a "must-read" and ValueAct Capital's Jeff Ubben said that, "The lessons are like scars and they are revealed here firsthand."

To know about the top 10 must read books recommended by Superinvestors, click here
This blog also has publish other post on value investors:

Whitney Tilson Wisdom on Value Artist like Buffett and Klarman
Classic Pabrai - A 2011 Half Hour Interview With Monish Pabrai and Steve Forbes
Top 7 Stocks Owned by Value Investors Every Investor Should Know
What Warren Buffett Can Teach Us About Position Sizing

Warren Buffett - The World's Greatest Money Maker

2013-07-27T02:52:00.001-07:00

BBC documentary on Warren Buffett that provides insight on how he makes his money!

This blog has also mentioned Buffett in the following post:

Top 7 stocks owned by Value Investors Every Investor Should Know

Transcipt of Warren Buffett's 1991 Lecture to Notre Dame Faculty
What Warren Buffett Can Teach Us About Position SizingTop 10 investment books for Superinvestors

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Michael Shearn - The Investment Checklist

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Cash Cushion Makes a Comeback

Searching for Bargains from Warren Buffett's Portfolio

Income Investing: Low Key Contractor with Good Dividend Yield - Lum Chang

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Finding Undervalued Singapore Stock: Ocean Sky - update

Why People Don't Succeed in Value Investing

Top 5 Best US Value Mutual FundYour Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Richer (Amazon)

Top 10 Investment Books for Superinvestors

Five best performing S-REITS in 2013

How Mohnish Pabrai uses Checklist Investing

World’s Best Investing Checklist

Becoming a Better Investor via a Latticework of Mental Models

Warren Buffett - The World's Greatest Money Maker

What Warren Buffett Can Teach Us About Position Sizing

How The Economic Machine Works by Ray Dalio

Value Investing Presentation by Aggregate Asset Management

Singapore Stocks Investing Strategy: DBS Vickers

Becoming a Better Investor via a Latticework of Mental Models - Robert H...

Jim Rogers Take Initial Stake in Geo Energy Resources

Value Investing Classic: The Money Game

Top 30 Singapore Stocks for 2nd Half of 2013

The Art of Value Investing: How the World's Best Investors Beat the Market

The Art of Value Investing: Book Review

Warren Buffett - The World's Greatest Money Maker

Top 5 Best US Value Mutual Fund
Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Richer (Amazon)