Today ADS announced that Blackstone does not want to consummate the ADS going private transaction and gave an excuse that the regulators made closing conditions difficult for Blackstone. [more]
Funny article about the Borrison Shanghai Expo Company which organized a World’s Most Exclusive Luxury Show, only for customers who are "on their way up the social ladder." [more]
Everyone expects Georgia Gulf Corp (GGC) not to survive, after all, this company has some of the worst characteristics of any business: [more]
The Nikkei, Australia ASX, Korea KOSPI are currently up, but I think when the Hang Seng, and Shanghai and Indian BSE market opens, there will be PANIC BUYING. People will do the reverse of the past few days and queue up to buy stocks. [more]
Repost: How to Look at Market Valuation [more]
Since the BSE fell the most yesterday, alot of buffett-wannabees will be queuing up to sell their shares, with arms in the air, and lamentations of "Get out! The end is near. I lost everything". Mass psychology works in mysterious ways.
....it's even worse when the US goes on a holiday, the World goes on a even greater sell-off.... [more]
Actually 3 excellent articles: [more]
I bought Microsoft in 2006 when it was between $24 to $25. Today I threw the MSFT Maiden into the Volcano to appease the gods. And with the realized 33% gains, I added to my position in Moody's (MCO). [more]
I lost 5% of my portfolio today. My 21.3% gains of 2007 is being reduced to zero gains in the past few weeks of 2008. This isn't even free spare cash lying around, this is my family's hard-earned savings that I have put into the boiling ocean of equities. [more]
After 3 years of owning Coca-Cola at $40 ~ $42, I finally threw the maiden into the volcano to appease the gods. This humble sacrifice will restore my small-caps investments in PRAA, BWLD, TASR and KONA.
Would you do business with this guy ? [more]
(This is my entry to the TMF Inside Value Newsletter contest) [more]
Morningstar rates about 1000 stocks based on their intrinsic value using discounted cash flow analysis + economic moat of the company. And the number of stars assigned to a stock denotes it's value for money, so if it is ***** five stars, it is a good buy, *** three stars is usually fair valued, and the stars change according to the price of the stock in relation to its intrinsic value. [more]
Looking at the trades in the last 2 sessions, I noticed that large caps defensive stock prices are going up, eg. Coca-cola, Wrigley's and Pepsi, Colgate and Procter & Gamble. What is being sold off are Restaurant Stocks (KONA, BWLD) and Small Caps in general. [more]
Thanks to Squidprorow for pointing this out, Andrew Bary got it wrong then and is wrong now. [more]
AAII has this article which I think is a recap for all investors. [more]
Financial Literacy in Asia.
“How much return do you expect from your investments?”
I ask my colleagues this question sometimes when we talk about stocks. The most common answers range between 30 ~ 50%. When I clarify further, I find that many have an innate gambling streak about them: put the bulk of their bank-roll and invest in one hot-tip, and hopefully the investment works out or else sell-off and look for the next hot-tip.
When I tell them about the best investors in the world earning less than 30% a year over long periods (Walter Schloss about 20% over 40 years, Buffett around 24% to 28% depending on the period, and John Neff about 13+% over 30 years and finally Peter Lynch about 29% over 13 years), they would inevitably tell me about someone, themselves or someone they know who doubled in the previous year.
Such is the investing mentality here in Asia; while it may be too easy to blame it on the gambling culture here, (Macau, Philippines, Vietnam, Cambodia, Malaysia and soon Singapore all have well established casinos) the reason is perhaps more complex.
For one, financial literacy is rarely taught at home, well that is not exactly true, Asians are taught at a very young age to save money, there is a lot of “A penny saved is a penny earned” Benjamin Franklin truism in Confucius teachings, this is evident by a near 40% savings rate here in much of Asia. But there is little or no follow through advice, most of us put our money in fixed deposits earning (hold your breath) under 2% (check out this Temasek owned bank: http://www.dbs.com/ratesonline/fdsgd.html ). Perhaps TMF should set up business here in Asia, of course since most of us aren’t schooled extensively on Shakespeare, the Motely Fool name won’t translate well, and should be changed to something more innocuous like TMF Financial Academy.
Another reason is that financial products have only started moving down-stream from private banking to the masses. Most of the mutual funds (we called them Unit Trusts) are throw backs from the early US Mutual funds era: 5% front-load, 3% back-load, management fees around 1.5% and then most of them resemble the index that they are trying to beat. Check out http://www.achiever.aia.com.sg/invest_fund.asp for some of examples. [more]