Investing For Value

Fundamentals 04-3: Learn how to mitigate against risk. There is also a selected URL of free resources for self-learning at the Advanced level and about Risk.  Revision date: 12 August 2020 In Part 2 of 3 , I provided the steps to develop your skills in analyzing companies and valuing them.  But learning to invest is more than those because things do not always turn out the way you expect. You can even lose money. Bad things do happen. This is risk.   Charlie Munger has said that all investment evaluation should begin by measuring risk.  Learning how to manage risk has to be part and parcel of learning how to invest. But bad things happened not only because of poor skills or even bad luck. It can also be due to your behavior. In learning how to manage risk, you should also learn about how your behavior can affect risk.   In this Part, we will cover the risk and behavioral investing part of the ‘How to invest”.  There is also a list of resources for the Advanced level, risk, and behav

Value Investing Case Study 02-2:  Valuation and risk assessment of Asia File to show why it is not a value trap.    Revision date: 2 Aug 2020 The value of a company is more than just its NTA.  It has customer relationships, a brand name (ABBA in the case of Asia File) and manufacturing secrets. With a market price below its NTA, does it mean then that Asia File is grossly mispriced? If it is just the market over-reacting to the current economic climate, there could be an investment opportunity. However, if the Group is facing some secular headwind that is going to disrupt its business like what happened to the newspaper and taxi sectors in Malaysia, then it is not an investment opportunity. Which is it? In  Part 1 , I have shared Asia File's track record and showed that there is no imminent disruption due to digital technology.   But digital disruption is coming and the question is whether Asia File is using the time to reinvent itself.  In Part 2, I will argue that the Group ha

Fundamentals 04-2: Step by step guide as well as selected URL of free resources to start you off in learning to be a successful value investor.   Revision date: 12 August 2020 I actually learned to invest by reading online materials, listening to podcasts and watching videos, all available free online. I seldom buy books although I have read many that I have downloaded. That was more than 15 years ago.  Today there are vastly more resources available online so that it should be easier to learn from online resources. Is this correct?  Not really because unless you learn to focus, you are likely to be overwhelmed.  Let me guide you on how to successfully learn to invest from freely available online resources.  There are several dimensions to investing Technical vs fundamental  Stock picking/active vs passive Quant or purely quantitative vs traditional Stocks vs other assets This post is about traditional stock-picking using fundamentals. You are here to learn how to be a value investo

Value Investing Case Study 02-1: An analysis of Asia File's performance and business model to show why it is not a value trap.    Revision date: 12 Aug 2020 Asia File is currently trading at RM 1.85 (as of 1 July 2020) per share compared to its NTA of RM 3.06 (based on 31 Mac 2020) per share.  Is this a value trap?   As a Group in the “brick and mortar” stationery business, you may wonder whether the market is pricing the Group because of: The current economic situation, OR Poor prospects in the digital economy. We have seen many traditional industries such as newspapers and taxis being disrupted by digital technology.  Many would agree that the stationery industry is a candidate for disruption.  But I would argue that it is premature to link the potential disruption to Asia File's current share price ie there is a market mispricing. Join me in a 2-parts post as I lay out my case on why Asia File's value is still going to be intact and even grow in the near future.    It