Why you will fail at Value Investing – part 3
By Growing your tree of prosperity  •  August 6, 2022
Having established that the company has a high business and management quality. The final step is to determine whether the price is cheap enough to justify a market entry. It is this process that I find the hardest to execute. The author does initially seem to employ a simple metric to determine whether the entry is worthwhile. He starts with the earnings yield numbers which is 1 divided by the PE ratio of the company. But it is the next step that resembles sorcery more than science. As tech companies invest in a lot of R&D, it is entirely possible that earnings after deduction for R&D will be low, so the analyst would have to moderate the earning yields. So the company may have an earnings yield of just 2%, but a smaller company in the same space may have less R&D and were able to conduct their business comfortably at an earnings yield...
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By Growing your tree of prosperity
I have recently completed my Juris Doctor and I am waiting to be called by the Singapore Bar. For the past 15 years I was an IT manager and I have worked in multinationals, financial exchanges, trade unions and even a government agency. I started my career as an AS/400 administrator and moved on to manage IT projects and operations

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