Tuesday, September 19, 2017

Why i seldom write more about the company i have purchased?

So far I seldom write more about the company i have purchased. The reason being is i am doing my best to focus on building my Investment Strategy into a system. A good system that suits my temperament to sustain me from my journey as an investor. A company valuation can be differ from different point of view and none of them will be the better answer. There will always be argument to thing which is yet to happen.

Instead of focusing on the market reaction, e.g. the shares price has dropped, etc etc, i think it is much better to focus our concentration and energy into studying the system better and implementing it into our investment.

Personally i think making money in shares market is not easy at all. In fact, it is very difficult as it involves many aspects in the whole market: different type of people from all over the world, the economic, the political issues, etc etc. Can we master all of these things? Abolutely the answer is No. In fact, no one is able to predict the market. But in our part, what we can do is to master ourselves, master our strategy, building a sustainable system that is able to survive us either in bull or bear market.

I will continue to deepen my investment knowledge my reading more investment books. I hope i can reach my seven figures portfolio soon which will enable me to generate more passive income from there. Wish me all the best!!!

Friday, September 15, 2017

September 2017 Portfolio Update

I added Ellipsiz @74.5cts per share (my purchased valuation is at $124mil) last month. The reason of my purchase are Ellipsiz proposing dividend of 6.5cts/share for FY2017, sold her probe card business for $88.3mil with cash on hand of $53.7mil and about $1mil of debts. This company is a very interesting company to me, i am excited to grow along with the business development.

My current Portfolio:

(1) Sunningdale

(2) Best World

(3) Frencken

(4) Avi-Tech

(5) Cogent

(6) Ellipsiz

(7) 800 Super

I almost finish my 22nd investment book "Warren Buffet Accounting by Stig Brodersen & Preston Pysh". My next book which i already bought will be: "The Most Important Thing Illuminated by Howard Marks & Paul Johnson". Wish me luck!!!

Thursday, August 24, 2017

August 2017 Transaction Update

The reporting season for Q2 has just been over, and i am quite satisfied with all my holding companies, except Innotek.

(1) Sunningdale has been performing very well and giving an Inaugural Interim Dividend of 2.5cts per share for HY2017. This is above my expectation.

(2) Best World has been performing well too and giving Dividend of 1.5cts per share for HY2017. The shares price has been tumbling from about $1.62 to as low as $0.89 and as per today it is closed at $1.18/share. All this happened mostly by the news of a Chinese government regulator said it is cracking down on pyramid schemes.

Am i affected by the fluctuation of Best World shares price?
Share price is only matter to me when i want to make my purchase for a business or when i am considering to sell my holding.

Based of HY2017 result, i am quite satisfied with Best World performance, with both top & bottom lines have been increasing QoQ and YoY, dividend payout is also increasing, management is confident with their business prospect for few years down the road. I think the current valuation is still not high comparing to its growing rate. So far i am not affected much by the volatility of Best World shares price.

(3) 800 Super's FY2017 result is inline with my expectation. It should be performing well for next and following financial years. I might want to accumulate more if the shares price drops.

(4) Avi-Tech's FY2017 result is also inline with my expectation with total dividend of 2.8cts for FY2017 (paid 1ct in HY2017 & 1.8cts have been proposed for FY2017). 

(5) Frencken's HY2017 result is impressive and i am looking forward their next reporting results.

(6) Innotek's Q2 result is quite a disappointment. I would expect the Q2 result to be at least same as Q1 result. Nevertheless, it is not easy for a company to make a turnaround given there are still much efforts and works the management have to put in. I like the honesty of the management to share with the shareholders the current situation of the company and the few steps they are currently taking to embark new challenging ahead. I do hope they can perform better for the next few quarters and given their strong cash holding position, i will consider to reinvest back again when things are showing consistent improvement. Currently i have divested all my shares as it meets my Selling Criteria (to have Significant Lower Profits for 2 Consecutive Quarters). 

(7) I made my 2nd time purchase of Cogent at the price of 81.5cts/share. It is quite high price comparing to today's closing price at 80cts/share. However, looking at this company's business vision and mission, business operation, the intangibles assets they have currently, i am quite confident their business worth much more than current valuation and it is still room to grow their business.

Above are just my thoughts. 

Wednesday, July 19, 2017

Warren Buffett's Ground Rules

I just finished my 21st book "Warren Buffett's Ground Rules" 2 days ago.

Now i am searching for my next investment book, most probably will get it this weekend.

Below are some key points i learnt from the book and i think it is better for me to list them down to remind myself:

(1) Warren Buffet teaches investors that the power of compounded interest is unmatched by any other factor in the production of wealth through investment. Compounding over a life-long investment program is your best strategy, bar none. The two determining factors of the ultimate result of compounding program are: (1) the annual average rate of gain and (2) time.

(2) Investing requires much of our energy & efforts into it, if we are not interested, unable, or unwilling to dedicate the time and efforts to our investments, we should buy index.

(3) Three type of Investment of Warren Buffet:

(3.1) The General: 

The principle of investing in company are investing largely focused on purchase securities at price less than the intrinsic value as determined by careful analysis, with particular emphasis on purchase of the securities less than their liquidating value.

An appraisal of a company can be derived of either the value of the company: [1] assets & [2] earnings power.

While principles never change, methods can be applied differently depending on given investing environment. 
Basically there are 3 methods used by Warren Buffet during his Partnership era:
      [1] The first method is investing with net-net and ultra-cheap stocks based on quantitative approach.
      [2] The second method is investing in companies which are not statically cheap based on quantitative approach but has a tremendous amount of future earnings power.
      [3] The third method is investing in companies which are able to provide high returns of earning, business which are great, enduring and sustainable business model that enables their earnings to be compounded over the years.

(3.2)  Workout: more commonly known as merger arb or risk arb- which involves bets on the likelihood that an announcement transaction (usually one company buying another) will actually close.

(3.3) Controls: Investment is more intelligent when it is most businesslike and business is most intelligent when it's more investment-like. Buying a stock is like buying a business which either discounted to its intrinsic value or earnings power. The continuing of buying part of the businesses through purchasing of the businesses stock at discounted price until we own a majority of the businesses then we become the majority of the shareholders (Controls).

(4) Investing in stock should be done with Conservatism and not Conventional.

Good results in investing come primarily from a properly calibrated balance of hubris and humility: 
1. Hubris enough to think we can have insights that are superior to the collective wisdom of the market and
2. Humility enough to know the limit of our abilities and to be willing to change course when errors are recognized.

We will have to evaluate facts and circumstances, apply logic and reason to find hypothesis, and then act when the facts line up, irrespective of whether the crowd agrees or disagrees with our conclusions.

(5) Concentrating portfolio within our circle of competence can produce the best result.
Concentrating vs Diversification: Better to be roughly right than precisely wrong.

(6) If we can identify 6 wonderful businesses, that is all the diversification we need. And we will make a lot of money. Going into the 7th business instead of putting more money into the 1st business is going to be a terrible mistake.

(7) " I would rather sustain the penalties resulting from over-conservatism than face the consequences of error, perhaps with permanent capital loss, resulting from the adoption of a "New Era" philosophy where trees really do grow to the sky" - Warren Buffet on February, 1960.

(8) We should be looking for the management with 3 things: intelligence, energy, and integrity. Integrity is what counts first. If someone does not have integrity, we want them to be dumb and lazy.

(9) "So the really big money tends to be made by investors who are right on qualitative decisions but, at least in my opinion, the more sure money tends to be made on the obvious quantitative decision" Warren Buffet, 1967.

Wednesday, June 7, 2017

The Next Investment Books in My Target List - to be completed by March 2018

Below are the list of my next target Investment Books which i aim to complete them by March 2018:

1. The Most Important Thing Illuminated by Howard Marks & Paul Johnson

2. Poor Charlie's Almanack by Peter Kaufman

3. The Little Book of Common Sense Investing by Jack Bogle

4. The Outsiders by William Thorndike Jr

5. Jack: Straight from the Gut by Jack Welch & John A. Byrne

6. Warren Buffet's Ground Rules by Jeremy C Miller

7. Where Are the Customers' Yachts? by Fred Schwed

8. Warren Buffet Accounting by Stig Brodersen & Preston Pysh

Good luck to me!!!