Author: The Asia Report

What is enterprise value and how can it help you avoid losing money? [Case Study: Asian Pay TV]

As a recap, the market capitalization or market cap is just: No. of shares  x shares outstanding Using a simple analogy, the price per share is the price of a slice of pizza if it is sold individually. The market capitalization is the price of the whole pizza (i.e. price of each pizza slice x total number of pizza slices). WHAT IS ENTERPRISE VALUE? Enterprise value or EV is a measure of a company’ total value. It is a much more accurate measure than just using the share price or market capitalization. Enterprise value provides an even more accurate measure...

Read More

Singapore Banks Series (UOB, OCBC, DBS) – Analyzing & Profiting From Them

Singapore banks are among the safest in the world. Collectively, the three local banks (UOB, OCBC and DBS) make up the largest percentage components in the local Straits Times Index. They have an outsized impact on the STI compared to other sectors. iShares MSCI Singapore ETF Although most people are familiar with the banks, analyzing them as an investor is much more challenging. Banks work very differently from normal firms – and analyzing their financials is much more complicated than looking a normal firm. Still, it is worthwhile to understand the basics of these banks simply because most Singaporeans...

Read More

Does the government want property prices to rise or fall? [short answer – neither]

Sentiment in the property market took a dramatic hit when the government announced new cooling measures back in July. Stock prices of developers reacted dramatically – falling to levels not seen the lows of 2016. In a small country like Singapore – understanding government policy is key as they control the land bank as well as dictate legislation that directly controls the market. National Development Minister Lawrence Wong gave a timely speech at the REDAS (Real Estate Developers’ Association of Singapore (Redas) as he explained the thinking behind the cooling measures at the anniversary dinner of the developers’ body...

Read More

How cheap is the Singapore market? [STI 7 Year Valuations]

Valuations, valuations, valuations: Based on the P/B chart, the STI is unambiguously cheap – trading close to the lows of 2016 (which by my memory were pretty extreme). The banks now are unfortunately not as cheap as they were in 2016. The three banks are trading within what I would call a “range of reasonableness”. I will get their valuation charts up one day where its much clearer when visualized out. About the Straits Times Index: The FTSE Straits Times Index (STI) is a capitalisation-weighted stock market index that is regarded as the benchmark index for the Singapore stock...

Read More

How To Invest Profitably Like Warren Buffett : A Free Mini-Course on Value Investing

I spend a couple of hours reading every day at least but understand that many of you simply do not have the time nor know what books to read. To that end, I’ve put together a free mini online course for readers: How To Invest Profitably Like Warren Buffett – A Crash Course on Value Investing The course is made up of 5 different sections and is only about 30 minutes long. What is value investing? (5:08) Why do people lose money in the stock market? (8:27) Fundamental analysis vs Technical Analysis (7:43) Mr Market – Friend or Foe? (3:40)...

Read More

Workshop Wrap-Up & Why Cycles Matter

I’ve just finished running my annual workshops with The Fifth Person teaching about cycle based investing. The workshops were full day workshops conducted over the weekends. While tiring, they are also incredible fun to run as I share about the different cycles that dominate our economy. CYCLES MATTER! One thing that continually impresses me time and time again is how prevalent cycles are and how much they matter when it comes to investing. Most people are familiar with business cycles and maybe the property cycle. Less well known but equally important is the credit cycle i.e. the growth of...

Read More

Why People Lose Money in the Stock Market

Talk with almost anyone who has been invested in the stock market, and you will hear stories about losing money.  There are several reasons why investors are faced with the possibility of losses in the market.  Examining the root causes of these reasons is essential to overcoming them and becoming a more successful investor. The emotions of fear and greed dominate the stock market.  These emotions lead to instances where the price of a stock will depart, often significantly, from the true value of the company itself. If fear becomes rampant in the stock market, many investors will sell...

Read More

Why Invest In Stocks?

Before we delve into the world of value investing, it is vital to gain an understanding of why people should even bother to invest their hard earned money in stocks.  There are other options of where you can invest your money, such as bonds and gold, so why should stocks even be considered? Source: Credit Suisse The answer is simple – stocks have shown time and time again to deliver higher returns over the long run than other asset classes. Thinking of stocks as a part-ownership of business Viewing stocks as a part ownership of a business is in...

Read More

Top Reads From The Web – Week #41

“I read and think,” Buffett once said. “So I do more reading and thinking, and make less impulse decisions than most people in business.” A little bit more about our Weekly Round Up Series… Our weekly roundup aims to bring the best of investment blogosphere from around the web and timely analysis to readers. Readers understandably face a shortage of time in their own daily lives to read widely and our weekly round-up aims to help curate timely articles and analysis to you. In response to a query about how to become a better investor, Buffett told the students,...

Read More

The Seven Worst Words In History – Key Takeaways from Howard Mark’s Latest Memo

Howard Marks has recently released his latest memo – The Seven Worst Words In The World. PS: – They are “too much money chasing too few deals”. Here are my key takeaways: 1. Howard Marks believes that investors knows that the future is unknowable. However, he also believes that investors can also enhance their likelihood of success if they adapt their investing stance based on where the market is in the cycle. Knowing where are you are in the cycle will help investors decide their investment stance. Should you be taking more risk, more leverage? Or should you be...

Read More

Is Traditional Retailing Dead?

I’ve found over the years that retailing is a sector where value investors have trouble generating returns from. Consider Buffett’s comments: “I think retailing is just too tough for me, just generally,” Buffett said. “We bought a department store in 1966, and I got my head handed to me. I’ve been in various things in retailing. … I bought Tesco over in the UK and got my head handed to me. Retailing is very tough, and I think the online thing is hard to figure out.” In 1993, Warren Buffett acquired Dexter Shoe Company with Berkshire Hathaway’s stock. Dexter...

Read More

[Case Study] The Rise and Fall of H & M… and Rise Again (?)

Readers will be familiar with Hennes & Mauritz AB (also known as H & M) – the Swedish multinational clothing-retail company known for its fast-fashion clothing for men, women, teenagers and children. It is the second-largest global clothing retailer, just behind Spain-based Inditex (parent company of Zara). In this episode of our Company Case Studies Section, we cover its rise and subsequent fall. [embedded content] You can also get our slides here. H & M Case Study: It was not too long ago in 2011 where H & M opened their flagship outlet in Orchard road. Hundreds flocked to...

Read More

Great Investor Series – Howard Marks, Oaktree Capital

I am happy to announce the launch of our new Great Investor Series with today’s spotlight on Howard Marks, founder and Chairman of Oaktree Capital. The series is intended to provide an introduction to some of the world’s top investors and the investing principles that guide them in their work. The thinking behind the Great Investor Series intent is simple. To “level up” in the knowledge – simply study the brightest in the field and work backwards for there. This week, we introduce Howard Marks, founder and Chairman of Oaktree Capital. In the 2017 Forbes rankings of the wealthiest...

Read More

What Can We Learn From Hyflux & Starhub?

For every financial report which comes our way, the key disclaimer of “Past performance does not predict future returns” is peppered throughout the report. While we can never be certain of whether past successes would repeat themselves, past failures tend to have an uncanny habit of rearing its ugly head when we least expect it. One of the key trends persisting over the last few years was the phenomena of investors stretching for yield as interest rates remained at record low levels. Investors have been searching for investments opportunities which could yield them high yields. Corporations rode the wave...

Read More

Investment Opportunities Re-Emerge 1.5 Years on

It’s been almost one and a half years since my last blog post. Markets had until late been overwhelmingly positive after Trump’s elections despite initial concerns. All this led to a dramatic decline in me writing as the markets roared ahead. Singapore underwent something unique only to it – the enbloc craze. This development swept to the property sector too and listed property stocks faced a dramatic uplift in prices. Fast forward to today, the mood has darkened considerably. We had some real volatility at the start of the year, as well as some real sustained price declines focused...

Read More

Like us on Facebook

Follow us on Twitter