We could apply discounted asset strategy to buy good business at undervalue price. One simple method is to buy strong property stocks with low Price-to-Book ratio (share price divided by net asset value). Hongkong Land (H78.SI) is a property stock listed in Singapore with commercial properties in Hong Kong, Singapore and China. Currently Price-to-Book ratio is exactly 0.5, at its historical low (see chart below), owing to falling share price and consistent growing net asset value. If an investor owns Hongkong Land at current share price (about US$6), it is as good as owning a portion of Hongkong Land properties at 50% discount. This is a combination of value investing (buying at discount) and growth investing (company with growing business, share price went up 8 times over the past 15 years).
However, a trader or investor needs to apply optimism strategies to know the ......