Foundations In Value Investing













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How To Mitigate Risks When Value Investing

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Fundamentals 03:  Risks differ depending on the type of assets and investment style.  This post looks at risk and risk mitigation from the perspective of a stock-picking value investor.   Revision date: 22 Aug 2020 "Risks come from not knowing what you are doing" Warren Buffett When you invest in equities, the goal is of course to get a better return compared to keeping monies in fixed deposits.  Unfortunately, the returns from equity investment are not guaranteed.  There will be times when you will make less than what you can from fixed deposits.  Worst still there will be times when you lose all your investments. The challenge is how to mitigate against them. There are 2 schools of thought when it comes to risks Those that treat risk as some form of variance Those that consider risk as permanent loss of capital This post is about how to mitigate against permanent loss of capital. This is because I look at investments from a long-term perspective. Any variance is a paper lo
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An Introduction to Value Investing - confronting value traps

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Fundamentals 01: Originally published under "An Introduction to Investing in Listed Companies".  Cover issues to consider when investing.  Updated to include notes on how to analyze companies and other value investing tips. Note that there is a PowerPoint presentation of this article on SlideShare under " Baby steps in value investing ".  Revision date: 18 Oct 2020 "Investment is simple but not easy" Benjamin Graham If you want to invest in listed companies from a value investing perspective, but do not have the time or knowledge to analyze and value the companies, join me as I share my analysis and valuation of such companies. I hope to short cut your learning journey.  As a value investor, you would be investing when the price is at a significant discount to the intrinsic value. The question then is whether your assessment of intrinsic value is accurate. If your valuation is wrong, then the stock is really cheap for a reason and you have a value trap. Bu
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Is Eksons a value trap? (Part 1 of 2)

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Value Investing Case Study 01-1: A fundamental analysis of the Group What is a value trap?   It is an investment that is trading at a low price relative to its value that while appearing to be cheap, is misleading.  With a market price of RM 0.57 per share on 1st June 2020 and with cash and marketable securities of RM 1.27 per share (based on the Balance Sheet on 31st Dec 2019), Eksons looks like a bargain.  But is there a catalyst for the price to go up? Or will there be some impending impairment that will wipe out a significant portion of its value? In other words, is Ekson a value trap?  In this 2-parter I will lay out my case why Eksons is not a value trap.   Now as to whether you should go and buy Eksons - see my Disclaimer. I present Part 1 here while   Part 2  was published on 21 June 2020.  Contents Is there Anything Special about the Group's Expertise? Is there Concern about how it Uses its Funds?  Is the Current Performance Outstanding? Tracing the Group's Rich and
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