tag:blogger.com,1999:blog-17478547.post80271166006005289..comments2024-03-27T20:17:30.597+08:00Comments on Growing your tree of prosperity: Attended my first investment seminar on Value Investing.Christopher Ng Wai Chunghttp://www.blogger.com/profile/15534057160494859977noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-17478547.post-62779343200656306392024-03-11T13:07:05.287+08:002024-03-11T13:07:05.287+08:00Achieve top scores in PSLE Maths with our proven t...Achieve top scores in PSLE Maths with our proven tuition approach, featuring small class sizes, individualized attention, and continuous assessment to track progress.<br />Read more: <a href="https://www.explico.sg/psle-exam/psle-maths" rel="nofollow">PSLE Maths</a><br />PSLE Exam Guidehttps://www.blogger.com/profile/17968000964195040739noreply@blogger.comtag:blogger.com,1999:blog-17478547.post-36672170384521911172014-06-25T21:11:35.560+08:002014-06-25T21:11:35.560+08:00Hyom hyom,
You are most welcome to post here.
Th...Hyom hyom,<br /><br />You are most welcome to post here.<br /><br />Thanks for straightening out my doubts. I agree with your take on assets.<br /><br />RegardsChristopher Ng Wai Chunghttps://www.blogger.com/profile/15534057160494859977noreply@blogger.comtag:blogger.com,1999:blog-17478547.post-44387333049522926052014-06-23T21:55:25.555+08:002014-06-23T21:55:25.555+08:00I did not attend Alvin's course but have the p...I did not attend Alvin's course but have the privilege of reading through Alvin's course materials. Hope both of you do not mind me joining in the discussion.<br /><br />Given that Alvin's course focuses on a technique known as net-net(buying stocks below two-thirds of net current assets) to students of Graham, the stocks which meet this criteria are usually very cheap stocks based on the discount to book value. The reason why they are so cheap is usually due to recent poor profit growth or even losses. If not, it is highly unlikely that the stock will be battered down to net-net levels. Fortunately for these stocks, the downside is protected by a rich asset base accumulated when times were better. <br /><br />The question is what kind of assets will be more relevant for these asset plays? Plant and equipment or property? As Christopher has mentioned, plant and equipment are directly responsible for generation of free cash-flow. However, if the company is facing a period of slow growth or losses, much of the plant and equipment may be idling and suffering from a low utilization rate. Besides, the value of plant and equipment can only be reaped in the hands of people armed with specialised knowledge to operate them. In the event of liquidation, it is hard to find such buyers. If it is a fire-sale and the seller needs to find such a buyer quick, plant and equipment is going to be sold at ridiculously low price. On the other hand, real estate is useful to everyone and the price is unlikely to go down as much compared to plant and equipment. Therefore, if an investor wants to count on downside protection, property is superior to plant and equipment. Another advantage to property is that it is easy to value and hard to defraud. This reduces the risk of an investor getting his valuation wrong.<br /><br />Plant and equipment is more relevant to companies on a growth path. But for such companies, the investor should be analyzing them as growth stocks. They are unlikely to be a candidate that falls under Alvin's net-net screen.hyomhttps://www.blogger.com/profile/00175340583474513718noreply@blogger.comtag:blogger.com,1999:blog-17478547.post-62259680094678527172014-06-23T16:06:52.675+08:002014-06-23T16:06:52.675+08:00It is indeed debatable about the property value. W...It is indeed debatable about the property value. We do consider the valuation date and apply a discount to property value as a margin of safety when appropriate.<br /><br />Regardless, there is no perfect strategy. All have its pros and cons. :)Alvinhttps://www.blogger.com/profile/15355622862810800357noreply@blogger.comtag:blogger.com,1999:blog-17478547.post-34705350091749868162014-06-23T15:58:13.742+08:002014-06-23T15:58:13.742+08:00I was very hounoured to know that you have not att...I was very hounoured to know that you have not attended any seminar on value investing, and yet, you gave your seminar virginity to us!<br /><br />Really appreciate your kind review of the course too!<br /><br />If I may, some of your readers may wonder what course you are talking about, I am shamelessly including this link for them to find out more: http://www.bigfatpurse.com/vimc/<br />Alvinhttps://www.blogger.com/profile/15355622862810800357noreply@blogger.com