AAR & TOL 02 (Nov 08 - Jul 09)

[Poles]

OK, "low hanging fruits" is a business term; we now know that Winston is a skillful businessman ......

Ha Ha ... Oei Hong Leong is a very skillful businessman ...

for the same applys to all analysts, economists etc.......foool by randomese.....HS theory.

[winston]

TOL:-

I had a colorful discussion with an Analyst today. His firm just upgraded the Transportation sector. I told him that I'm not impressed with their call...

Why ? Swine Flu is affecting the Airline industry, Reduced Exports are affecting the Container Shiping industry etc. And most of all, I dont like to buy something that has doubled on continuing poor business fundamentals..

His reply was that it's very difficult to find anything that has not moved 50%. The transportation area eg. Airlines, Container Ships etc. is the only area left, if I want to continue to invest in Equities.

My reply is that I dont have to be in Equities and am willing to sit this one out for two years if I have to. I'm not a Fund Manager that has to be fully invested.

The above is to help me crystallize my thinking. More importantly, it's to remind myself not to be swayed by glowing analyst reports. If you have invested money in Oil thinking that you can get out close to US$200, you would have lost a lot of money. Or if you have listened to those experts that were pushing S-Chips saying that the QDII money will come to Spore very soon.

[b0rderc0llie]

Ya, dun need to listen to those experts. Can form own opinions rather than follow them. Also can listen to them and trade against them if their calls are not sound.

[kennynah]

this morning, i was in the same lift as some of the directors & apparantly most of them felt that the fundamentals have not been improving ...

哎呀。。。u didnt give them your namecard, invite them for kopi-o? wasted .... but i am sure you will meet them again in the lift soon

[OE2008]

TOL

Why am I paying so much attention to fundamentals and the economic news! What am I, a LTBHer , a cycle investor, position or swing trader? Have never being good in fundamentals anyway so why not just focus on the technicals and follow them. Why not just watch the dema 20, 27 and 50. Have the major indices breached any of these dema in all the recent pull back?

[helios]

More importantly, it's to remind myself not to be swayed by glowing analyst reports. If you have invested money in Oil thinking that you can get out close to US$200, you would have lost a lot of money. Or if you have listened to those experts that were pushing S-Chips saying that the QDII money will come to Spore very soon.

those analysts are like sparrows chipping

[Poles]

Ya, dun need to listen to those experts. Can form own opinions rather than follow them. Also can listen to them and trade against them if their calls are not sound.

i think it is my own money, i have to decide which is the best way to go.....either right or wrong the responsibility comes back to me.

p/s: the only other person I listen to, is my wife.........though i assume to know more....but she seems to be right most of the time.......

[winston]

TOL:-

Do you know why you are buying or selling ?

1) Are you buying becuz you expect someone else to pay a higher price, irrespective of the company's business fundamental ?

2) Or are you buying becuz you can see that the asset is trading at a huge discount to it's "intrinsic value" ?

For the former (#1), how do you come to the conclusion that someone would be willing to pay a higher price than you ? Are people really that stupid ? Are you really that smart ? Do you really have more info that the next guy ?

For the latter (#2), it takes alot to be able to really come out with the IV of a company. If the experts cant get it really right, what chance do you really have ?

And vice-versa..

Do you know what you are doing ?

[winston]

And to continue the crystallization of my thinking on " do you know what you are doing ?" ...

1) Do you know the drivers of the business ? What is going to affect the revenue ? What's going to affect the margins ?

2) How well do you know the business ?

3) What is the upside risk from your judgement ?

4) What is the downside risk from your judgement ?

I think WB summed it all very nicely:- Invest in only things that you understand and have some competence

[winston]

Continuation on "Do you know what you are doing ? :-

Do you really understand Properties ? Do you really understand the Banking business ? Do you really understand the Oil & Gas business ? Do you understand the Palm Oil business ? Do you understand China is you are buying a S-Chip ?

If you dont know these industries then you are relying on another person ( normally an Analyst ), to tell you whether that industry is doing well or not. Can you trust that guy ? Does he know what he's talking about ? Some of these guys are striaght from school with only a few years experience only. They may be smart but nothing can replace a few business cycles in an industry. Even then, you can still get whacked from an unlikely source ...

And what about the target price ? Is it a realistic one ? Or is the Target Priced set to encourage you to buy or sell ? Who is on the opposite trade ? Who is buying while you are selling ? And who is Selling to you while you are buying ?