Author: 8% Value Investhink

2017 First Half Review – Part 1

This year started with a lot of renewed hope after the disastrous 2016 where we saw markets whipsawing investors. Brexit was supposed to crash the market, but it didn’t and Trump wasn’t supposed to become President and he did! The markets then reacted by going up 15%, when everyone thought it should go down if Trump ever won. In retrospect, the Trump rally continued into 2017 and we saw the S&P500 hitting all time highs and most markets, following US footsteps, are up for the year. We have passed the first half of 2017 and hence it might be...

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Return on Investment for 38 Oxley Road

With the whole Singapore intrigued with the 38 Oxley Road saga, it is hard to avoid the discussion, be it during lunch, on Facebook and Instagram and worst of all with international friends. This saga could be a watershed moment, marking the downfall of a little red dot, if it is not resolved amicably asap. But since this is an investment knowledge infosite, let’s leave the politics to others to comment. Today we shall focus on the investment aspect.   The investment story of 38 Oxley Road is also quite intriguing for those who would be interested in investment...

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Lessons from Omaha – Part 3

This is a continuation of Part 1 and Part 2. In the last post, we discussed that ETFs should be part of every astute investor’s portfolio and since tech is becoming so important, maybe tech ETFs might also make sense. Also, if 90% or more of all investors never ever beat the index, then wouldn’t be buying the index i.e. buying ETFs (equity index funds) be the best option? So that’s coming from the Oracle of Omaha, Warren Buffett himself. In this post, we go back to the centuries old business of insurance. As most students of value investing...

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Lessons from Omaha – Part 2

This is a continuation of the previous post. Okay, as promised, here’s the investing lessons that we can learn from this year’s Berkshire Hathaway’s AGM (Annual General Meeting for Shareholders). The first lesson came as a big surprise for many. It came about when Warren Buffett was asked why did he advise his heiress (second wife) to buy S&P500 rather than continuing to put her money in Berkshire Hathaway after he is no longer around. He was dumbfounded for about a second which afterwards he recovered and gave a succinct answer: The S&P500 represents the best of the best...

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Lessons from Omaha – Part 1

A trip to Omaha, Nebraska, USA is like a pilgrimage. Muslims hope to visit Mecca once in a lifetime. In the olden days, Christians went to Jerusalem on crusades. As value investors, well, we should pay homage to the world’s greatest investor – Warren Buffett aka the Oracle of Omaha, by going to Berkshire Hathaway’s Annual General Meeting (AGM) for shareholders, maybe as many times as possible before things change. For the uninitiated – Berkshire Hathaway is Warren Buffett’s investment vehicle which was a textile company that he bought 52 years ago. It went bankrupt but he used it...

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More on Sustainability

This is a continuation of the last post. In the last post, we discussed how we should focus on the big picture and pull the big levers to move things. In diet, it’s about cutting meals and cutting meat and putting in the hours in the gym or hit the road running 20 km per week. In investing it’s about understanding business models and putting in the hours reading annual reports. Needless to say, investing is also about margin of safety – the biggest lever, the most important concept. We are really fortunately to be living in the 21st...

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Think Big and Think Sustainability

There are a few tough things in life, one of which is losing weight. It is said that 95% of diets ultimately fail and losing weight successfully is one of the hardest things to do, along with quitting tobacco, kicking off addictions and investing successfully. As such, having some mild success with both (diet and investing), I would like to share lessons which we could draw from one to the other.   I think there are two big concepts: 1. Think Big: Don’t sweat the small stuff, pull the big levers! 2. Think Sustainable: If it cannot be sustained,...

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Buying Singapore Savings Bonds

Investing is a fascinating game in a sense that no formula ever works all the time. There is no “Bao Jia” or sure wins. There are no programmable solutions, no absolutes and we must always break the rules to win. There is also no such thing as never. Warren Buffett himself broke his own rules so many times, in order to win. He said he would never buy tech stocks, yet he bought IBM and Apple.  He concluded airlines won’t make their cost of capital, yet he bought airlines!   Airlines, the one industry that was guaranteed to lose...

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2017 High Dividend List – 1H version!

The annual high dividend list is here! This will be the first list for 2017 with a second list coming out closer to the end of the year so as to shorten the waiting time for these highly popular lists. Over the years (this is the 8th year), these lists had become an attraction of its own, drawing lots of traffic for the site. Although the rest of the stuff is actually pretty good! :) Final Fantasy, one of the most popular game series in the 1990s and 2000s might be an analogy that some readers could relate to....

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Investing: Riding a Bicycle Up a Mountain in the Night

I have been thinking about yet another an apt analogy for investing and so far here’s the best that I have come up with – investing is pretty much like riding a bicycle up a mountain in darkness. To further elaborate, it’s also a mountain located in Finland where the signs are in Finnish and daylight won’t come in a few months. Yet, we still have to climb up. The summit is waiting. How’s that for encouragement huh? Ok, let’s not get too discouraged. It’s tough but not that tough. First you need to learn how to ride a...

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Let’s talk about Money and Gold too!

A very Happy Valentine’s Day to all! This is a continuation of the previous post. In the last post, we discussed asking some really fundamental questions about companies to see if they stood the test: 1. Does the company help improve the well-being of its customers? 2. Does the company add value fundamentally in ways that make all lives better? 3. If the company did not exist, would the world cease to functional properly in some ways? These questions help us explore fundamental concepts that are really the basic tenets of life. These things are more fundamental than money...

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Happy CNY! Let’s talk about Money!

Wishing all readers a very happy Chinese New Year! Happy CNY, Huat Ah! Sapiens: A Brief History of Humankind by Yuval Noah Harari was a book published in 2014 that became a New York Times Bestseller and has been translated into 30 more languages. I have read the book twice and found it intriguing enough to discuss it here as some of the concepts were not just refreshing but relevant to investing. The author Harari cited that the inspiration for his book came from Guns, Germs and Steel by Jared Diamond, which was also a New York Times Bestseller...

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Health and Wellness: A Secular Trend

Happy New Year and Welcome 2017! As a semi follow-up to the previous post, let’s expand on the health and wellness theme that was discussed. There are two key factors to health and wellness: diet and sports. Ideas for diet would be about nutrition. Stocks could be Nestle, GNC (the supplement company) or maybe Danone. But in this post we focus on the second factor: sports. Or more specifically, sportswear including sports shoes. To illustrate an important point about sports related industries, the following two charts on bicycles tells a good tale. As we know, cycling has become really...

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2016 in Review: Most Unpredictable Year Ever!

2016 has to go down in history as the worst year for forecasters ever. Who would have predicted that the China market would collapse 25% in the first month of the calendar year, after dropping 40% in 2015, then only to rebound by year end? And the Bank of Japan reducing interest rates into negative territory, pulling 20-30% of the global bond market into negative yields. And commodities! Oil from $100 skyfalling to $30 and then back to $60, bringing the rest of the resource stuff – iron ore, copper, coal up, up and away!   Then Duterte, a...

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Hierarchy of Financial Needs

Most readers would probably have come across Maslow’s famous hierarchy of needs: a pretty neat explanation of how humans should view our existence in terms of our needs. Abraham Maslow, an Amercan psychologist, created this hierarchy as he was trying to understand human nature. The hierarchy of needs is usually produced in a pyramid like the one shown below. The theory goes like this: humans have needs and we need to fulfill our basic needs before we can advance to the next level. For example, the most basic needs like food, water, shelter have to be fulfilled before we...

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