Sunday, September 29, 2013

How The Economic Machine Works by Ray Dalio

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.

Saturday, September 21, 2013

Value Investing Presentation by Aggregate Asset Management

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

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

Monday, September 16, 2013

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

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 in the video above

Saturday, September 7, 2013

Jim Rogers Take Initial Stake in Geo Energy Resources

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 ResourcesOn 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:

Value Investing Classic: The Money Game

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.

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